Taming the state and putting “good” folks in charge is the equivalent of squaring a circle

The State's Dumb Strength

by James E. Miller

Many commentators expressed astonishment when thugs from the U.K. government recently ordered the destruction of hardware containing leaked government secrets belonging to the Guardian news outlet. Shortly before the deed went down, one of the shakedown artists was quoted as telling editor Alan Rusbridger “You’ve had your fun. Now we want the stuff back.” Amusing enough, that statement, as mercilessly honest as it was, disproves the whole foolish understanding that “government is us.” If that premise were true, all state secrets would already be known by the public and the whole idea would exist only as a poor contradiction.

To the Guardian extortion, the always-thoughtful Conor Friedersdorf averred “the U.S. and Britain, government authorities are undermining their own legitimacy without realizing what a precious commodity that is.” Astute journalist Glenn Greenwald, who writes for the Guardian and reports on government misdoings, described the bully tactic as “ inane as it was thuggish.” Just days prior, Greenwald’s partner (the politically-correct term for “boyfriend”) was detained by the same merry ole’ authorities under suspicion that he was transporting terroristic data.

This plain and unapologetic intimidation has rightfully drawn anguish from some of the more liberty-minded writers. Yet, many of these thinkers still seek democratic solutions to the coercion, spying, and overall domination put forth by the political class. Basically, their faith in representative government has not been shaken. There is still hope the masses will wake up from their apathetic slumber and put fine, upstanding people in office who will perform as genuine statesmen that defend both freedom and security.

Color me a shade of less-optimistic black.

Whenever the state decides to remove the mask of decency and show its true, violent self, there is a positive outcome to the predation. Many finally catch a glimpse of the true force that backs monopoly government. Very few will allow this image to change their preconceived notions of the viability of institutionalized mass representation. As much as I respect the work of Greenwald and Friedersdorf, their scorn means little if they do not recognize the origin of the disease.

The targeted harassment of dissenters is indicative of the state’s brash reaction to all challenges. Monopoly compulsion is naturally in a molasses state, slow to move but powerful when striking. The crude form of economic calculation government enforcers must utilize acts as an albatross on efficiency. So what government lacks in dynamism, it makes up for in brute, unthinking strength. Some of the less-witted among us cheer the brutality on. Others ignore it, happy to collect welfare checks on the first of every month.

No matter the atrocities carried out, there is still persistent talk of making the state more competent and compassionate in its ever-increasing role in social life. As American children are preparing to go back to their tax-funded penitentiaries for another school year, they will soon be greeted with a slew of newly-hired armed guards. The increased presence of protective sentries is a reaction to last winter’s shooting at Sandy Hook elementary. The best way to fight the prospect of a gun-toting maniac willing to inflict harm on students is to force those same students to go about their business under the watchful eye of gun-toting, more subdued maniacs – or so that’s the game plan.

North American Union: From NAFTA to the NAU

Denials and Duplicity

by  Charles Scaliger

On January 2, 1988, leaders of the United States and Canada met to sign the first major agreement in decades designed to comprehensively lower trade barriers between the two countries. Since the 1850s, American and Canadian politicians had striven to lower or eliminate trade barriers between the two countries, with uneven success; the first such agreement, the Elgin-Marcy Treaty of 1854, was torpedoed by the United States only 12 years later in retaliation for British support of the Confederacy during the Civil War, and successive efforts over the years at eliminating various protectionist policies inevitably fell prey to cries of protectionism or favoritism on one side or the other.

But 1988’s Free Trade Agreement (FTA) would be different, leaders in both countries assured their respective citizenries. This time around, trade barriers would be lowered across the board, and protective tariffs and other barriers become a thing of the past. Moreover, Americans and Canadians received glib assurances that the agreement would in nowise jeopardize the sovereignty or independence of either country.

In one respect, American and Canadian leaders were telling their constituents the truth: This trade agreement was different. The FTA — unlike its various abortive predecessors over the previous 130 years — was intended to be but the first step in a process of economic and political integration that would indeed, over the long run, abolish the independence not only of the United States and Canada, but the rest of North America as well.

Despite its significance, the FTA was passed with little fanfare in the United States, where President Reagan presented it to Congress under a “fast-track” procedure that limited debate and disallowed amendments.

As it stood, the FTA was a fairly typical trade accord, but it did not come about in a vacuum. Unnoticed by most lawmakers at the time of its passage was another initiative, under way since 1986, to create a trilateral trade agreement involving not only Canada and the United States, but also Mexico. This agreement, which was to become the North American Free Trade Agreement (NAFTA) only a few years later, was the real prize; the FTA was supposed to lay the groundwork for, and be superseded by, NAFTA, and was only negotiated because those favoring a more comprehensive trade agreement knew that a Canada-U.S. accord would be much easier to achieve.

NAFTA, which came into force in 1994, was billed as a sort of expanded FTA, but in reality, it was nothing of the sort. Rather, NAFTA was North America’s first foray into transnational government camouflaged as a “free trade agreement,” of the sort that the Europeans had been building on the other side of the Atlantic since the 1950s.

By the 1990s, it was very clear to any careful observer what was afoot in Europe. All rhetoric aside, what had begun in 1951 as an international commission regulating the trade of coal and steel, and had soon morphed into the European Economic Community (informally termed the “Common Market”), was well on its way to becoming a bona fide continent-wide government. The Maastricht Treaty of 1992, which created both the European Union and a continent-wide currency, the euro, established once and for all the real agenda of Europe’s “free trade” movement: the creation of a superstate to govern the formerly independent nations of Europe.

Continent-wide Government

With the creation of the North American Free Trade Agreement, the process of creating continent-wide government began anew, but this time on the other side of the Atlantic. Having had so much success in building a regional government in Europe using free trade as a pretext, the globalists, who have always had international — and eventually global — government as their overarching goal, decided to recycle the formula in the New World.

NAFTA was sold to Congress and the American public as a “free trade agreement.” But instead of creating conditions for free trade (borders transparent to the flow of goods, services, and people), NAFTA set up a complex bureaucracy tasked with managing and controlling North American trade and with adjudicating trade disputes. In other words, NAFTA was not a “free trade” but rather a “managed trade” agreement, in complete conformity with the creed of socialists of every hue that the free market cannot be trusted, and that all mercantile activity must be closely monitored and managed by allegedly benevolent bureaucrats who can determine, better than market forces, how much of a given good to produce, at what price, and up to what standards.

The Habeas Corpus Myth

We need due process because we need to constrain the state, and because of the importance of individual liberty

by Anthony Gregory

We know many things about habeas corpus. We know that it goes back to the Magna Carta and that the U.S. Constitution affirmed this bulwark of Anglo-American liberty. We know that habeas prohibits jailing people without cause, and that it remained healthy throughout U.S. history, except during wartime, until George W. Bush’s 2006 Military Commissions Act. And we also know that in 2008, the Supreme Court guaranteed basic due process rights for Guantánamo’s inmates.

The trouble is that none of these things are true. Five years ago, I believed the conventional civil libertarian narrative and began writing a paper to criticize the Bush administration and its nearly unprecedented violation of this sacred right.

My research revealed that much of what I knew about habeas corpus was wrong, and that many well-intentioned people had a romanticized view of the great writ. I published my findings in my Independent Institute book The Power of Habeas Corpus in America: From the King’s Prerogative to the War on Terror, and I found that as with other idealized state functions, habeas corpus has an uneven history.

Indeed, habeas is a government power — specifically a judge’s power to summon and question a case involving detention — and judges have used it to centralize their own authority. About a century ago, legal scholar Edward Jenks controversially wrote: “the most embarrassing discovery [is that] the more one studies the ancient writs of Habeas corpus ... the more clear grows the conviction, that, whatever may have been its ultimate use, the writ of Habeas corpus was originally intended not to get people out of prison, but to put them in it” [emphasis in the original]. Jenks oversimplifies, but his point certainly complicates the popular understanding.

The writ’s English origins are ambiguous, depending on whether we focus on the functional aspect — the power to oversee detention processes — or the linguistic. Habeas corpus means, “have the body,” and thirteenth century judges used such language to call forth witnesses and juries as well as prisoners. The Magna Carta guarantees against unjust detention, but does not contain the words “habeas corpus.” The common use of such words to defend a prisoner’s liberty came later. Even then, judges utilized the writ to monopolize power over lower jurisdictions.

Price Versus Cost

Politicians have what economists call a zero-elasticity vision of the world

By walter williams

Suppose you buy a gallon of gas for $3. How much did it cost you? You say, “Williams, that’s a silly question. It cost $3.” That’s where you’re mistaken, because there’s a difference between price and cost. To prove that price and cost are not the same, consider the following. Suppose you live and work in New York City and routinely pay $15 for a haircut. Imagine you were told that there’s a barber in Boise, Idaho, who can give you the identical haircut for just $5. Would you start going to the Boise barber? I’m betting you’d answer no because even though the price is cheaper, the cost is greater.

We might think of price as the money that’s actually given in exchange for the transfer of ownership. When you purchased the gallon of gas, you simply transferred your ownership of $3. What the gas cost you is a different matter. One way to determine the cost of a gallon of gas is to ask yourself what sacrifice you had to make in order to have $3 to buy it. Say that your annual salary is $75,000. Your total federal income tax, state income tax, local taxes and Social Security and Medicare taxes come to about 35 percent of your salary. That means that in order to purchase the $3 gallon of gas required that you earned about $4.60 in order to have $3 after taxes. That means a gallon of gas costs you $4.60 worth of sacrifice. But that’s not so costly as it is to a richer person — for example, someone earning a yearly salary of $500,000. He has to earn more than $5 before taxes in order to have $3 after taxes to purchase gas.

The Power of Negative Thinking

Both ancient philosophy and modern psychology suggest that darker thoughts can make us happier

By OLIVER BURKEMAN

The holiday season poses a psychological conundrum. Its defining sentiment, of course, is joy—yet the strenuous effort to be joyous seems to make many of us miserable. It's hard to be happy in overcrowded airport lounges or while you're trying to stay civil for days on end with relatives who stretch your patience.

So to cope with the holidays, magazines and others are advising us to "think positive"—the same advice, in other words, that Norman Vincent Peale, author of "The Power of Positive Thinking," was dispensing six decades ago. (During holidays, Peale once suggested, you should make "a deliberate effort to speak hopefully about everything.") The result all too often mirrors the famously annoying parlor game about trying not to think of a white bear: The harder you try, the more you think about one.

Variations of Peale's positive philosophy run deep in American culture, not just in how we handle holidays and other social situations but in business, politics and beyond. Yet studies suggest that peppy affirmations designed to lift the user's mood through repetition and visualizing future success often achieve the opposite of their intended effect.

Fortunately, both ancient philosophy and contemporary psychology point to an alternative: a counterintuitive approach that might be termed "the negative path to happiness." This approach helps to explain some puzzles, such as the fact that citizens of more economically insecure countries often report greater happiness than citizens of wealthier ones. Or that many successful businesspeople reject the idea of setting firm goals.

One pioneer of the "negative path" was the New York psychotherapist Albert Ellis, who died in 2007. He rediscovered a key insight of the Stoic philosophers of ancient Greece and Rome: that sometimes the best way to address an uncertain future is to focus not on the best-case scenario but on the worst.

Sustainability vs. Local Knowledge

“Sustainability” and Time Preference

by MIKE REID

A young woman came to my door the other day and told me she was raising money to teach farmers in the Philippines about “sustainable agriculture.”  

“Wow,” I replied, “You must be a major expert for Filipinos to reach out halfway across the world and ask you to come teach them.” 

“Oh,” she said, “well, we haven't talked to the Filipinos yet. This is just the money we need to get our organization to the Philippines. Then we'll teach them all about sustainable agriculture.” 

This 20-year-old, wearing her paisley bandanna and her hemp necklace, fabulously rich by global standards, is only one of the many idealistic people the West now exports to manage the lives of the global poor.

The concept of “sustainability” is now ubiquitous in international-development circles. It was most famously defined by the UN potentate and ex-Norwegian Prime Minister Gro Harlem Brundtland. According to her 1987 UN report, sustainable development is “development that meets the needs of the present without compromising the ability of future generations to meet their own needs.”

The international idealists now use this concept broadly to mean combining economic development with environmental preservation. One of the main fears of the advocates of “sustainable agriculture” is that farmers are unwisely degrading the quality of their soil by using chemical pesticides and fertilizers.  

But are outside experts really qualified to determine each Filipino farmer’s proper balance between getting chemically induced high yields now and risking lower yields later?

Each person has his own subjective preferences about how to trade present enjoyment for future enjoyment (and present returns for future returns). Universally, as Ludwig von Mises explained, using the Austrian school’s concept of time preference, we humans are basically impatient. We generally want things now, now, now—instead of someday later. But for each human, the power of this preference depends on his own desires, resources, and judgment. 

In the world of reality, in the living and changing universe, each individual in each of his actions is forced to choose between satisfaction in various periods of time. Some people consume all that they earn, others consume a part of their capital, others save.

Our One-Off Economy

Essays In Fragility

by Charles Hugh-Smith

If you set out to create an increasingly fragile economy, you'd do precisely what the Federal Reserve and our political "leaders" have done.

All the extraordinary measures deployed since 2008 to jumpstart the U.S. economy are one-offs: either they cannot be repeated or they have lost their effectiveness.

As a result, we now have an extraordinarily fragile one-off economy that is dependent on "emergency" measures that cannot be withdrawn even as their utility in the real economy dwindles by the day.

These two dynamics--declining effectiveness and unrepeatability--have created a uniquely fragile economy. Once you become dependent on extraordinary fiscal and monetary stimulus, withdrawing the stimulus will trigger a recessionary cascade. But continuing the stimulus cannot duplicate its initial effectiveness, as malinvestment and unintended consequences degrade the initial boost.

We cannot add another $1 trillion in borrowed money to the $1.3 trillion we're already borrowing every year. The Federal Reserve could expand its balance sheet by another $2 trillion, but in sharp contrast to its earlier injections, the "high" from its latest QE stimulus was next to non-existent.

An Inconvenient History

Nazi Greens

Walther Darré National Ecosocialist

by Martin Durkin

Two disturbing stories recently on the greens.  First Spiegel magazine runs an article on the rise of extremist right-wing environmentalism in Germany.  Then The Observer newspaper reveals that, in the name of preventing ‘climate change’, British aid money to India is paying for the forced sterilisation of poor people. These are shocking stories. But not so shocking to those familiar with story of Nazi environmentalism.  Time for a history lesson …

Picture the scene.  At the edge of a forest, German soldiers point their guns at rows of naked people who follow the Jewish religion.  Among them are young mothers clutching their babies.  The shots echo through the woods and the dead bodies fall into the ground.  Down the road, while this is happening, their German army comrades are busy establishing nature walks and bird sanctuaries and planting trees.  The Nazis conducted horrific experiments on children (I have seen footage so upsetting it can’t be shown on TV) but at the same time they banned medical experiments on animals.  The same Nazi monsters who committed crimes of unimaginable barbarity also advocated vegetarianism, organic agriculture, forest preservation and homeopathic healthcare.  How can we possibly explain this?  What was the connection between the inhuman brutality of the Nazis and their gushing idealization of ‘Nature’?

The purpose of exploring Nazi environmentalism is not just to upset the greens.  If environmentalism were a curious but peripheral aspect of National Socialism, it would be of no real historical interest.  Environmentalists could be forgiven for saying, Ah well, it just goes to show, there’s a little bit of good in the worst of us.  But environmentalist ideology was not an accidental, optional-extra to National Socialism.  As we shall see, green ideas were at the core of Nazi thinking.  The German Volk and Nazi movements marched beneath the banners of ‘Nature’ and the ‘organic’.  However, what follows here is not simply a potted history of Nazienvironmentalism.  It is, at the same time, a brief history of early environmentalism writ large.  As will become clear, it is not so easy to draw a line between two types of green thinking.

To understand why green ideology emerged at all, and why it happened in Germany, we need to go back in time, a few centuries, to set the scene.  We have described elsewhere on this blog (The Greens: A Warning from History), the transition from feudal society to capitalism.  To the greens this great historical change it is more or less the source of all evil.  In Germany, it was a process which began, falteringly, in the 13th Century.

Historically, a rise in commercial activity is reflected in the growth of towns (towns are in essence markets). During this century the number of them in Germany increased by about ten-fold.  But the towns in Germany were less of a liberating force than they had been in England.  German feudal society was especially rigid.  Professor of German history Mary Fulbrook describes how ‘Germany had a much more immobile social hierarchy and was more ‘caste-ridden’ than either England or France.’   The liberty of the towns was more bitterly opposed by the German nobles, the increasing wealth of the new commercial classes more keenly resented and the desperate attempts by the serfs to obtain their freedom more fiercely resisted.

What Soviet Medicine Teaches Us

Sheep demanding the wolf

by Yuri Maltsev

In 1918, the Soviet Union became the first country to promise universal “cradle-to-grave” healthcare coverage, to be accomplished through the complete socialization of medicine. The “right to health” became a “constitutional right” of Soviet citizens.

The proclaimed advantages of this system were that it would “reduce costs” and eliminate the “waste” that stemmed from “unnecessary duplication and parallelism” — i.e., competition.

These goals were similar to the ones declared by Mr. Obama and Ms. Pelosi — attractive and humane goals of universal coverage and low costs. What’s not to like?

The system had many decades to work, but widespread apathy and low quality of work paralyzed the healthcare system. In the depths of the socialist experiment, healthcare institutions in Russia were at least a hundred years behind the average US level. Moreover, the filth, odors, cats roaming the halls, drunken medical personnel, and absence of soap and cleaning supplies added to an overall impression of hopelessness and frustration that paralyzed the system. According to official Russian estimates, 78 percent of all AIDS victims in Russia contracted the virus through dirty needles or HIV-tainted blood in the state-run hospitals.

Irresponsibility, expressed by the popular Russian saying “They pretend they are paying us and we pretend we are working,” resulted in appalling quality of service, widespread corruption, and extensive loss of life. My friend, a famous neurosurgeon in today’s Russia, received a monthly salary of 150 rubles — one-third of the average bus driver’s salary.

In order to receive minimal attention by doctors and nursing personnel, patients had to pay bribes. I even witnessed a case of a “nonpaying” patient who died trying to reach a lavatory at the end of the long corridor after brain surgery. Anesthesia was usually “not available” for abortions or minor ear, nose, throat, and skin surgeries. This was used as a means of extortion by unscrupulous medical bureaucrats.

To improve the statistics concerning the numbers of people dying within the system, patients were routinely shoved out the door before taking their last breath.

Being a People’s Deputy in the Moscow region from 1987 to 1989, I received many complaints about criminal negligence, bribes taken by medical apparatchiks, drunken ambulance crews, and food poisoning in hospitals and child-care facilities. I recall the case of a 14-year-old girl from my district who died of acute nephritis in a Moscow hospital. She died because a doctor decided that it was better to save “precious” X-ray film (imported by the Soviets for hard currency) instead of double-checking his diagnosis. These X-rays would have disproven his diagnosis of neuropathic pain.

Profits From Poverty

Poverty Professionals And The Crony Capitalists Who Love Them

By Bill Frezza

Yes, it looks like a wedding announcement out of The Onion, but when it comes to making a killing off the never-ending “War on Poverty,” the marriage of convenience between the financial services industry and federal bureaucrats is no laughing matter.

The idea that government welfare programs could eliminate poverty, rather than temporarily alleviate its worst impacts during hard times, took root during Lyndon Johnson’s Great Society initiative. From modest beginnings, a panoply of federal welfare programs expanded and multiplied to the point where they now consume one-sixth of the federal budget—some $588 billion last year, according to the Congressional Budget Office.

This is a lot of spending—even by contemporary standards—and this figure doesn’t even include the current explosion in unemployment benefits, as these are considered social “insurance” payouts rather than welfare. Nor does it include Social Security or Medicare, our largest and most rapidly growing federal expenditures. To make matters worse, these programs, which were designed to keep the elderly out of poverty, are entitlements not yet subject to means testing, so payments go to rich, middle class, and poor alike.

With anti-poverty programs enjoying meteoric growth thanks to the economic policies of the current and previous administrations, we may someday look back fondly on the days when we “only” had to fork over half a trillion a year to support the longest and least successful “war” in American history, with no sign of stopping.

How many civil servants with good pay and benefits does it take to do all this poverty fighting?  Try as I might to discover the answer I finally gave up, surprised that I couldn’t locate a definitive study enumerating the number of federal, state, and government-funded private employees whose livelihood depends on administering the ever expanding stream of tax dollars flowing to the poor. Is it any wonder that these entrenched bureaucrats have managed to slowly expand the definition of poverty to include a standard of living that would have been considered middle class back when the war on poverty started?

Social Darwinism and the Free Market

The Free Market is the means by which human beings cooperate

by David Gordon

In a speech to the American Society of Newspaper Editors on April 3, 2012, President Obama called a budget proposal of his Republican opponents in Congress "thinly veiled social Darwinism."

What did the president mean by this comment? The budget proposal in question, he claimed, would require drastic cuts in government programs designed to aid the poor. "And by gutting the very things we need to grow an economy that's built to last — education and training, research and development, our infrastructure — it is a prescription for decline." Further, his opponents reject proposals to increase taxes on the rich.

How can anyone favor refusing government aid to the poor and oppose requiring the rich to pay more in taxes? Obama answered that those who think in this way must believe that the welfare of the rich is of primary significance. The poor, and everyone else, must take whatever "trickles down" to them from the rich.

It is this view that Obama had in mind when he spoke of social Darwinism, but the doctrine is usually characterized in a different way. Darwin, it is alleged, has taught us that evolution is a struggle in which the strong overcome the weak. To aid the poor would, on this view, act counter to progress. It would be an attempt to promote the survival of the unfit, rather than the fit. Instead, we should stand out of the way and allow the poor and improvident to suffer the natural consequences of their feckless ways.

Responses to Obama's speech from defenders of the free market have not been slow in coming. The libertarian philosopher and historian George Smith, among others, has noted that Herbert Spencer and William Graham Sumner, usually classed as the main social-Darwinist defenders of the market, believed nothing like the doctrine just described. Spencer approved of private charity and includes in his Ethics a discussion of the duties of "positive beneficence."

Spencer opposed coercive, state enforced charity, but he favored charity that is voluntarily bestowed.… In one essay he observed that it was becoming more common for the rich to contribute money and time to the poor, and he praised this trend as "the latest and most hopeful fact in human history." Moreover, the final chapters in Spencer's The Principles of Ethics are devoted to the subject of "positive beneficence," the highest form of society in which people voluntarily help those in need.

Further, as the political philosopher Larry Arnhart has pointed out, Darwin did not teach that human evolution depends on ruthless struggle. To the contrary, he emphasized the importance of social unity and cooperation. 

"'Selfish and contentious people will not cohere,' Darwin declared, and without coherence nothing can be effected. If Social Darwinism is all about selfish competition … then Darwin was not as Social Darwinist."

Ludwig von Mises already called attention in Human Action to this misunderstanding of Darwin:

The notion of the struggle for existence as Darwin borrowed it from Malthus is to be understood in a metaphorical sense.… It need not always be a war of extermination such as the relation between man and morbific microbes. Reason has demonstrated that, for man, the most adequate means of improving his condition is social cooperation and division of labor.

On the Socialization of Wealth

Real wealth constantly passing from the domain of private property into the communal domain

by Sheldon Richman

That … veil which is spread before the eyes of the ordinary man, which even the attentive observer does not always succeed in casting aside, prevents us from seeing the most marvelous of all social phenomena: real wealth constantly passing from the domain of private property into the communal domain.

Wealth marvelously passing from the private to the communal domain? It sounds like a socialist’s redistributionist fantasy!

But wait — Frédéric Bastiat, the great laissez-faire radical, wrote those words in his book Economic Harmonies, chapter 8, provocatively titled “Private Property and Common Wealth.”

He repeats the point throughout his fascinating chapter:

And so, as I have already said many times and shall doubtless say many times more (for it is the greatest, the most admirable, and perhaps the most misunderstood of all the social harmonies, since it encompasses all the others), it is characteristic of progress (and, indeed, this is what we mean by progress) to transform onerous utility into gratuitous utility; to decrease value without decreasing utility; and to enable all men, for fewer pains or at smaller cost, to obtain the same satisfactions. Thus, the total number of things owned in common is constantly increased; and their enjoyment, distributed more uniformly to all, gradually eliminates inequalities resulting from differences in the amount of property owned.

Here’s what Bastiat has in mind. In a competitive marketplace with advancing technology, as the effort required to produce and, hence, acquire things diminishes, the price of gaining utility falls. For example, if the average worker had to work two hours, 40 minutes, to buy a chicken in 1900, but only 14 minutes as the 21st century approached (actual statistics), Bastiat would say the chicken “is obtained for less expenditure of human effort; less service is performed as it passes from hand to hand; it has less value; in a word, it has become gratis, [though] not completely.” In other words, most of the utility that had to be paid for with painful effort in 1900 was free by 2000. (By “less value,” Bastiat meant that the market price has fallen, not that the chicken is less useful.)

Thus progress through the market order consists in ever more people satisfying more of their wants at less and less effort. Bastiat calls this a move from private property to common wealth because he roots property in effort, and greater wealth is available to all with less effort. What makes this possible? Technological innovation. As Bastiat puts it, “Production has in large measure been turned over to Nature.”

The Singularity of Fools

A special report from the utopian future

BY DAVID RIEFF 

Good books transcend their times; bad books reflect them. One reads Madame Bovary for its sublime writing and exploration of the human condition in all its tortuous complexity. But if you really want to understand 19th-century bourgeois France, you would be far better served by plowing through the literarily mediocre but historically informative novels of Gustave Flaubert's journeyman contemporary, Eugène Sue. What has always been true of literature is even more so with regard to nonfiction, especially by authors who claim to know what the future holds in store for us. The history of financial predictions made at the height of stock market booms is a well-known illustration, whether it was the great economist Irving Fisher insisting shortly before the crash of 1929 that stock prices had reached "a permanently high plateau" or the not-so-great economist Kevin A. Hassett heralding Dow 36,000 -- the 1999 book he wrote with James K. Glassman -- a little more than a year before the dot-com bubble burst.

But financial manias pale (at least for those who have not bet their 401(k)s on such fanatically rosy assumptions) when compared with the techno-utopias that, at least since the middle of the 19th century, have periodically captured the collective imagination of the general public in the West -- and today litter bookstores with their rah-rah optimism. Too bad few remember Cicero's tart observation that he did not understand why, when two soothsayers met in the street, both did not burst out laughing. But if the history of utopian fantasies has taught us anything, it is that people find it hard to accept the fact of their unreality, preferring instead to hew to their hopes, whether profound, as with Marxism, or preposterous (and commercially self-interested), as with the vision of the carefully ordered futuristic cities famously laid out for a receptive public at the General Motors pavilion at the 1939 New York World's Fair -- just as Adolf Hitler was about to blitzkrieg Poland.

If utopia has always been a kind of escape clause from the human condition, contemporary techno-utopianism represents a radical upping of the ante. For entrepreneur Peter Diamandis, creator of the X Prize to spur the development of passenger-carrying private spaceships and other innovations, not only will technology make it so that "during our lifetime … we're moving off this planet," but it will solve even the gravest problems that confront humanity -- climate change, species extinction, water and energy shortages. For futurist Ray Kurzweil, "nonbiological intelligence will match the range and subtlety of human intelligence" by 2030, making it possible to "go beyond the limits of biology, and replace [an individual's] current 'human body version 1.0' with a dramatically upgraded version 2.0, providing radical life extension."

The Extraordinary Business of Life

Business is the most dynamic social institution known to mankind

by SANDY IKEDA

I heard it again from this year’s commencement speaker: the common mistake of thinking economics is just about business and making money. I know I’m not the only economics teacher who every year has to disabuse his students (and many of his own colleagues from other disciplines) of that same error. 

Economics is not business administration or accounting. Economics is a science that studies how people interact when the means at their disposal are scarce in relation to their ends. That includes business, of course, but a whole lot more as well.

Where Does That Notion Come From?

Well, for starters, perhaps from one of the greatest economists in history, Alfred Marshall. He opens his highly influential textbook, first published in 1890, with this statement:

Political Economy or Economics is a study of mankind in the ordinary business of life; it examines that part of individual and social action which is most closely connected with the attainment and with the use of the material requisites of well being. (Emphasis added)

The Friedmanite Corruption of Capitalism

Friedman shifted the foundation of the nation’s money supply from gold to T-bills

by Thomas J. DiLorenzo

All throughout his new book, The Great Deformation: The Corruption of Capitalism in America, David A. Stockman is critical of the Chicago School, especially its intellectual leader during the last half of the twentieth century, Milton Friedman. He captures the irony of the so-called free-market Chicago School on the very first page of his introduction, where he writes of the “capture of the state, especially its central bank, the Federal Reserve, by crony capitalist forces deeply inimical to free markets and democracy.”

This is a deep irony because it was Chicago School economists such as George Stigler who wrote of the “capture theory of regulation” when it came to the trucking industry, the airline industry, and many others. That is, they produced dozens of scholarly articles demonstrating how government regulatory agencies ostensibly created to regulate industry “in the public interest” are most often “captured” by the industry itself and then used not to protect the public but to enforce cartel pricing arrangements.

This was all good, solid, applied free-market economics, but at the same time the Chicago Schoolers ignored the biggest and most important regulatory capture of all — the creation of the Fed. The Chicago School simply ignored the obvious fact that the Fed was created as a governmental cartel enforcement mechanism for the banking industry — during an era when many other kinds of regulatory institutions were being created for the same purpose (i.e., “natural monopoly” regulation).

Not only did the Chicago School ignore this glaring omission from its “capture theory” tradition of research on regulation; it also ignored the realistic, economic analysis of political decision making that was an important part of the research of the two most famous Chicago School Nobel laureates next to Friedman — George Stigler and Gary Becker. Stigler and Becker published some important articles in the field that is better known as public choice, or the economics of political decision making. Friedman himself had long been an advisor to Republican politicians, so no one could credibly argue that Chicago School economists were naïve about the realities of politics.

The High Cost of “Free”

Paying people to be disabled, sick, reproduce, unemployed, unmarried, retired, poor, homeless, hapless, or drugged

by Loyd S. Pettegrew and Carol A. Vance

Why does a large portion of the population choose not to work when there are many jobs available? The answer is simple. If you can receive 2-3 times as much money from unemployment, disability, and/or welfare benefits (subsidized housing, food stamps, free cellphones, etc.) as you can from a temporary or part-time job, and live a life of leisure, why work? In 2011, the U.S. government spent over $800 billion[1] on this “welfare,” exceeding expenditures on Social Security or Medicare.

In the Denver arena where Mr. Obama gave his DNC 2008 acceptance speech, a woman in the audience became overwhelmed by the speech and said that she no longer needed to worry if she could make her car or mortgage payments because he would take care of it for her. In Cleveland, a woman claimed that she was going to vote for President Obama again because he gave her a free cellphone (along with a litany of other entitlement giveaways). Before you growl, you should know that the free cellphone program was instated by President Bush in 2008 through the FCC’s Universal Service Fund. Fees for these “free” cellphones are paid by all telecommunications service providers out of the revenue received from their paying customers. Despite the political rhetoric over the past half century, entitlements were actually highest during Republican administrations. The political allure of free is bi-partisan.

The political allure of free is so strong that an alarming number of people choose to become wards of the entitlement/welfare state rather than captain their own destiny. Economist Nicholas Eberstadt of the American Enterprise Institute believes that Americans have become a nation of takers, threatening the self-reliance that has long characterized our national psyche. Eberstadt (2012, p. 4) presents data showing that entitlement payments to Americans, since 1960, have risen annually by 9.5 percent. He argues that over the past 50 years the ever-increasing array of transfer payments to Americans have risen 727 percent. In 2010 such payments alone totalled $2.3 trillion with Social Security (for old age and disability) accounting for 31 percent, Medicare 24 percent, Medicaid 18 percent, Income Maintenance 12 percent, other giveaways (free cell-phones, support for a broken education system, housing, the arts, etc.) 8 percent, and Unemployment Insurance 6 percent (Eberstadt 2012, C1-2). This has resulted in 49 percent of American households receiving one or more government transfer benefits (Eberstadt 2013); this amounts to 18 percent of all personal income and a burden of $7,400 for every American.

The Balance Sheet on Government Giveaways

Our economic analysis shows that retirees who worked for 40 years and then live 20 years past retirement will receive more than twice what they, and their employers, contributed over their lifetime of working. Only retirees who survive a decade or less after their retirement do not take more out of Social Security than they contributed. Most people will agree that the retirees should receive his/her Social Security benefits at retirement. But with people living longer, who will pay for all the additional benefits now promised? Most people who have not done their homework (including Congress) fail to realize that the numbers for Medicare benefits exceed those for Social Security. Since 1965, Medicare required less than a 3 percent contribution from a worker’s gross wages, yet most people receive over $250,000 in medical benefits before reaching the age of 74, assuming no catastrophic illness. You can do the math on your own wages, assuming a lifetime salary of $100,000 per year for all 40 working years, a worker will have paid in only $120,000 into the Medicare system. Congress, after agreeing to take care of everyone after retirement for the rest of their lives, has broken a sacred trust and used incoming contributions to fund other government expenditures, instead of letting the contributions build over the past 50 years.

The Paradox of Imperialism

State, War, and Imperialism

by Hans-Hermann Hoppe

The State

Conventionally, the state is defined as an agency with two unique characteristics. First, it is a compulsory territorial monopolist of ultimate decision-making (jurisdiction). That is, it is the ultimate arbiter in every case of conflict, including conflicts involving itself. Second, the state is a territorial monopolist of taxation. That is, it is an agency that unilaterally fixes the price citizens must pay for its provision of law and order.

Predictably, if one can only appeal to the state for justice, justice will be perverted in favor of the state. Instead of resolving conflict, a monopolist of ultimate decision-making will provoke conflict in order to settle it to his own advantage. Worse, while the quality of justice will fall under monopolistic auspices, its price will rise. Motivated like everyone else by self-interest but equipped with the power to tax, the state agents' goal is always the same: to maximize income and minimize productive effort.

Instead of concentrating on the internal consequences of the institution of a state, however, I will focus on its external consequences, i.e., foreign rather than domestic policy.

The Eurozone's Conspiracy Theories

The ultimate audacity of conspiracy mongers is to advertise themselves as victims of conventional wisdom

By Fabio Rafael Fiallo

Putting the blame of Europe's economic woes on sinister forces operating behind the scenes has always had its charm and its advocates. Suffice it to recall General de Gaulle's invectives against what he used to name the "gnomes of Zürich," i.e. the financial markets, guilty in his view of the travails of the French franc in the 1960s.

The crisis that the Eurozone is currently going through has provided a unique terrain for conspiracy theories to blossom one more time. A race is on among politicians and economists who try to identify which sly interests have created or prolonged the current economic turmoil in the southern countries of the Eurozone.