Don't Cry For Me, America

Comparing Argentina And The United States

By Alejandro Chafuen

Many observers have pondered if the United States is following the same troubled path as Argentina.  In the 1940s, Argentina’s Juan Domingo Perón used government agencies for political gain and created a popular form of fascism called Perónism. In the United States, the recent revelation of the Internal Revenue Service targeting political enemies is a bad omen. Are we on an Argentinean course?

The road to decay in my native country, Argentina, began with the implementation of one of the most powerful collectivist doctrines of the 20th century: fascism. The Labour Charter of 1927 –  promulgated by Italy’s Grand Council of Fascism under Mussolini – is a guiding document of this doctrine and provides for government-based economic management. This same document recommends government provision of healthcare and unemployment insurance. Sound familiar?

Since adopting its own brand of fascism, “Justicialismo,” Argentina began to fall in world economic rankings.

·         In 1930, Argentina’s gold reserves ranked 6th. After the “experts” took over the central bank, reserves fell to 9th in 1948 (with $700 million), 16th during 1950-54 (with $530 million), and 28th during 1960-1964 (with $290 million).

·         The Argentine central bank, created in 1935, was at first a private corporation. Its president lasted longer (seven years) than the president of the country, and it had strict limits for government debt purchases and even had foreign bankers on its board. It became a government entity in 1946.

When Perón assumed power shortly thereafter, he hastily expanded the role of government, relaxed central banking rules and used the bank to facilitate his statist policies. In just 10 years, the peso went from 4.05 per U.S. dollar to 18 in 1955 (and later peaked at 36 that same year). After Perón’s rule, Argentina further devalued its currency to 400 pesos per U.S. dollar by 1970.

Bipartisanship in bad policy-making can be especially damaging. Just as some of President Obama’s interventionist monetary policies were preceded by similar Bush administration policies, some of Perón’s policies were similarly foreshadowed: “Already before we reached power, we started to reform, with the approval and collaboration of the previous de facto regime,” said the populist.

Perón was removed from power in 1955 but his policies lived on.  The “Liberating Revolution” claimed it was leading an effort to return to the free-market system dictated by the Argentine Constitution of 1853.  But Argentines chose an interventionist, Raúl Prebisch, as minister.

Inflationary policies and political use of the monetary regulatory authority, especially after Perón’s first presidency, devastated the economic culture and rule of law of Argentina. In the United States, the Fed does not have all the powers delineated by Perón, and has not caused as much destruction as the Argentine central bank, but the process has been similar and more gradual. The U.S. dollar buys less than 10 percent of what it did in 1913 when the Federal Reserve was created, the debt limit increases regularly—thus stimulating further debt monetization—and monetary authorities have increased their arbitrary interventions.

Sex Sells And The Japanese Are Buying

A Look At Japan's Love Industry

by Tyler Durden

Tokyo, and the entire country of Japan, which the documentary below describes as "a place where socially awkward people gather and use money to resolve their communication problems", has a ticking demographic time-bomb: on one hand the population is getting so old that sales of adult diapers now exceed those for babies; on the other as the chart below courtesy of Mark Adomanis shows, the number of actual births each year has dropped to a record low.

The issue: young people in Japan just don't want or have any interest, in commitment to the other sex, nor do they seem to have any interest in procreating in a narrow sense, or sex in a broad one (a topic further pursued in "Why have young people in Japan stopped having sex"). In short:

• 50% of Japanese women 18-34 are single
• More than 60% of Japanese men 18-34 are single

Whether it is the women's fault, described as "so infatuated with their careers that work trumps a boyfriend or husband", or men "a generation obsessed with virtual reality and so intimidated by real women that they prefer cyber girlfriends over real relationships" is unknown, and irrelevant.

There is another angle. As this documentary from Vice investigates, "sex sells and the Japanese are buying." The reason: Japan has a "seemingly infinite menu of relationship replacement services." And who really needs the hassle of a steady significant other when on one hand the gamma radiation levels keep creeping higher and higher by the day meaning the threat of a random mutant appendage emerging is no longer negligible, and on the other Abenomics is making everyone feel wealthier, even as everyone actual purchasing power implodes, leaving everyone but the 0.1% broke and starving.

Has Japanese society crossed the Rubicon into full devolution (and after watching the video below you will understand why), where cheap single-serving sexual thrills and intimacy replacement have overtaken the household unit as the hub of society?

The reality is that unless something drastically changes between the demographic singularity the country is rapidly headed toward, the Fukushima disaster which hits new spilled radioactivity records on a daily basis, and the emotional detachment that the locals (don't) feel toward each other, in a few years none of this will matter.

Worst of all: Japan is merely the test tube baby, pardon the pun, for the rest of the insolvent "developed" world. What happens in Japan, is coming to a broke centrally-planned country near you.

For all this and much more (those who want to skip the autistic Japanese parts and go straight to the Yakuza meeting, proceed to 9 minutes into the clip) watch the Vice clip below. 

Average:

Doing good is a complex affair

Bangladeshi Garment Workers and the Perversion of Ethics

by Mario Rizzo

For the last few days the newspapers have been filled with stories about how western garment manufacturers will now insist on greater safety for the workers who make their clothes in Bangladesh. They will pay for renovations and reconstructions of the physical plants. What is more, the government in Bangladesh will raise the minimum wage and make unionization easier.

So now Pope Francis and the relatively rich in the developed world (many of whom were among the 900,000 names on a petition to improve things that has been circulated) will be pleased and the demands of their social conscience will be satisfied.

This is another instance of the simplistic pseudo-morality of those who can only see what is right in front of them at the present moment. This attitude is closer to a sympathetic reflex than a reasoned moral judgment.

Consider the following. The cost of garment labor in Bangladesh will rise. When public attention moves elsewhere, western manufacturers will either hire fewer workers or reduce the rate at which they hire workers in Bangladesh. Some many even leave the country. (Remember Bangladesh also has bad infrastructure and political instability making it a marginal place to do business.)

Costs will rise not only because of the costs of improved working conditions but also because a rise in the minimum wage will prevent the compensating-downward adjustment of wages. And the increase of unionization will also raise costs and wages. What Bangladesh has going for it at this particular stage in its development is relatively low wages and globalization. We do not do the Bangladeshis a favor by insisting on even early twentieth-century labor standards in an incredibly backward economy.

The nineteenth-century economist Frederic Bastiat asked us to pay attention to the “unseen” as well as the seen in economic life.  Where will Bangladeshis who do not get to work in the garment factories (or perhaps other factories if the new minimum wage and labor standards set in more widely) go? Where will they get an income? Will people in Western Europe and the United States send them compensatory payments?

Too often, as this case demonstrates, people moralize high standards of living and hence of worker safety. Worker safety is a normal good, that is, as income rises we can afford more of it. To say that people have a right to a certain level of worker safety and a “living wage” is an example of the harm the notion of positive rights can do in poor countries – especially when the standards are imported from developed countries.

I am not saying that the death of more than a thousand garment workers isn’t a horrible event. I am not saying that we should not have compassion for these people. What I am saying is that the whole of morality is not about feeling good. It is about doing good. And doing good is a complex affair. It requires attention to the unseen. 

Standing Up to the New Paternalism

Today's nudging elite poses a threat to our everyday freedoms

By SEAN COLLINS

Why ‘nudge’ theory and its more coercive variants are so popular among Western policymakers. 

When Nudge: Improving Decisions About Health, Wealth and Happiness was published in 2008, it seemed like it might be a fad bestseller, like Freakonomics  or one of those Malcolm Gladwell books.

Nudge authors Richard Thaler and Cass Sunstein, both American academics, proposed that government and employers should more consciously direct people to make ‘better’ choices in health, personal finance and other areas, in order to improve their lives. They gave the example of a cafeteria that lays out food in a way that encourages people to select carrot sticks over French fries or dessert. The authors label their approach ‘libertarian paternalism’: ‘paternalism’ because they want to steer people in a certain direction, and ‘libertarian’ because they would still offer people an array of choices (if you really want the chocolate mousse, you can reach under the counter at the back).

Although a new idea at the time, nudge was hardly a Big Idea. And yet governments around the world picked it up and ran with it, giving the concept more substance and longevity than might have been expected. As Sunstein has noted, the findings from his and others’ behavioural research have informed US regulations concerning ‘retirement savings, fuel economy, energy efficiency, environmental protection, healthcare, and obesity’. Sunstein himself implemented many of these measures in his role of Regulatory Czar in the Obama administration (described in his recently published book, Simpler: The Future of Government). In the UK, prime minister David Cameron set up a Behavioural Insights Team, also known as the ‘nudge unit’, in 2010. This has led to a variety of new policies and schemes directed at anything from obesity and teenage pregnancy to organ donations and the environment.

Some are now seeking to extend ‘nudge’ policies into new areas. Earlier this summer, the White House announced the establishment of a new team to explore applications of the concept. In a recent New York Times op-ed, David Brooks argued for taking nudge further, in the name of social cohesion: ‘Most of us behave decently because we are surrounded by social norms and judgments that make it simpler for us to be good. To some gentle extent, government policy should embody those norms, a preference for saving over consumption, a preference for fitness over obesity… These days, we have more to fear from a tattered social fabric than from a suffocatingly tight one.’ In the UK, nudge-based recommendations have received favourable responses from across the political spectrum, from the Guardian to the Daily Telegraph.

Even certain libertarian-leaning writers have argued that there isn’t much, if anything, paternalistic about Thaler and Sunstein’s ‘libertarian paternalism’. Will Wilkinson, formerly of the libertarian Cato Institute, writes in the Economist’s ‘Democracy in America’ blog: ‘By definition, “choice-preserving policy” is not paternalistic policy.’ Atlantic journalist Conor Friedersdorf believes it is possible to ‘sell “libertarian paternalism” to actual libertarians’. He writes: ‘My enthusiasm for “libertarian paternalism” is high when there is no neutral default position possible, and government sets an enlightened default within a realm it properly controls. I am even amenable to some government mandates… But to be worthy of its name, “libertarian paternalism” must go further… in insisting on a bright line between enlightened defaults and paternalistic mandates with no opt-out.’ In other words, as long as there is an opt-out, nudge policy’s ‘enlightened defaults’ are okay.

But what Thaler, Sunstein and their fans miss is the fact that just because nudges offer a degree of choice, this does not, in itself, mean that such programmes are respectful of individuals’ liberty and decision-making capacities. Nor does that fact render nudges any less paternalistic.

The Compassionate Science

Caring about people is not always easy

by Steve Landsburg

I’ve said this before and will say it again: Part of the reason I love economics is that economics is the compassionate science. It’s the discipline that requires us to think hard and to care about how policies affect everyone, not just the people who happen to be standing in front of us.

The response to the government shutdown has been as good an example of this as any. Nothing but a garguntuan failure of empathy can explain the chorus of voices insisting that the shutdown is a bad thing because government employees might lose their paychecks. It takes a mighty powerful set of moral blinders to care so much about the recipients of those checks and so little about the taxpayers who fund them.

It gets even uglier when that same chorus of voices responds “But the government employees are poor and the taxpayers are rich!”. Put aside the question of whether that’s true. If your goal is to transfer money to the poor, and if the poorest people you can think of are government employees, then the well of your compassion is truly dry.

Argue if you must for transferring income from the rich to the poor. But to turn that into an argument for transferring income from the taxpayers to the employees of the government, there are a couple of billion poor people you’ve got to willfully ignore.

When I blogged about this issue earlier this week, we had one commenter — a personal friend, actually, and someone I’ve been surprised and delighted to see showing up in our comments section from time to time — who broke my heart by pointing to the pain of Capitol Hill coffee shop owners who are losing business, apparently oblivious to the fact that taxpayers also visit coffee shops, and that for every dime not being spent by a DC bureaucrat, there’s an extra dime available to be spent by a Nebraska farmer or a New York cab driver. Our commenter apparently remembered to care about the guys selling coffee in DC but forgot to care about the guys selling coffee in Nebraska.

Which brings me back to what I like about economics. I don’t care what your views are on the shutdown, I don’t care what your views are on income redistribution, I don’t care where you are on the ideological spectrum, but if you’ve ever absorbed any economics at all, you’re immune from the mistake my friend made this week. The single biggest lesson that economists have to teach is that it’s important to care about everyone, not just about the people who happen to cross your path. That’s a really good lesson, and this week has been a good reminder that we have to keep on hammering away at it.

Welcome to the 'Trust No One' Society

UK officialdom has successfully fostered an all-embracing climate of mistrust

By BRENDAN O’NEILL

There’s something very weird about today’s discussion of trust in public life, which is this: the institutions and organisations that crow most loudly about a crisis of trust are the same institutions and organisations that actively stir up mistrust across modern society.

That is, the public bodies which wring their hands over the fact that they aren’t trusted much anymore are also the ones that do an enormous amount to stoke today’s broader climate of mistrust, to inflame the idea that we, the public, cannot trust each other, and in fact that we as individuals cannot trust ourselves.

So we have a bizarre situation today where public bodies seem to think they can encourage mistrust among citizens, in everyday life, without any repercussions for themselves or for the levels of trust that they enjoy. Recent developments seem to have proved them wrong. In many ways, what we are witnessing now, in the corrosion of trust in institutions, is the misanthropic climate of mistrust biting back at those who did so much to unleash it.

Consider the NHS. Following various scandals, including the Savile affair and the Mid-Staffs debacle, the NHS is very worried that people don’t trust it anymore. It is thinking about how to rebuild trust, and is always telling us how important trust is.

This is the institution that has done perhaps more than any other in contemporary Britain to create a climate of mistrust.

Walk into any NHS facility and the first thing you see are posters saying, ‘Don’t attack our staff! If you attack our staff we will have you arrested and you won’t get treatment.’ Rough translation: we don’t trust you, you are volatile, stay at arm’s length. The NHS has also acted, in the words of one of its internal documents, as ‘agents of the state’, effectively spying on citizens. NHS workers have been used to keep an eye out for radicalisation among their Muslim patients, contributing to the idea that Muslims can’t be trusted. Midwives are trained to look out for signs of domestic violence among pregnant women, spreading the poisonous, mistrustful idea that intimate relationships are all a bit dodgy.

As for NHS propaganda, it’s always telling us to beware others and to beware ourselves. Its latest safe-sex posters show a room full of young people drinking and dancing and getting off with each other, next to the words, ‘The only thing standing between you and disease is a condom’. In short, everyone is diseased, dirty, dangerous, so you had better cover up when touching them.

Its recent anti-smoking posters show toddlers saying things like, ‘Mummy, if you smoke, I smoke’. Here, we have that very fashionable idea that parents can’t be trusted to look after their children properly, in fact that parents are a toxic threat to their offspring.

Quite why the NHS thinks it can stir up so much social mistrust and yet never be the victim of mistrust is beyond me.

Or consider care homes for elderly people. Following recent revelations of mistreatment, politicians and officials have set themselves the task of rebuilding public trust in care homes.

Vice Vs Crime

Mises Explains the Drug War

by Laurence M. Vance

Air travelers were outraged when the FAA announced that there would be flight delays because air-traffic controllers had to take furloughs as a result of sequester budget cuts. But there is another federal agency whose budget cuts Americans should be cheering — the Drug Enforcement Administration.

According to the Office of Management and Budget’s report to Congress on the effects of sequestration, the DEA will lose $166 million from its $2.02 billion budget. Other agencies that are part of the expansive federal drug war apparatus are getting their drug-fighting budgets cut as well.

These cuts, no matter how small they may actually end up being, are certainly a good thing since over 1.5 million Americans are arrested on drug charges every year, with almost half of those arrests just for marijuana possession.

Although 18 states have legalized medical marijuana, seven states have decriminalized the possession of certain amounts of marijuana, and Colorado and Washington have legalized marijuana for recreational use. In the majority of the 50 states, possession of even a small amount of marijuana can still result in jail time, probation terms, or fines. The federal government still classifies marijuana as a Schedule I controlled substance under the Controlled Substances Act, with a high potential for abuse and with no acceptable medical use.

Since the federal government has not followed its own Constitution, which nowhere authorizes the federal government to ban drugs or other any substance, it is no surprise that it has not followed the judgment of Ludwig von Mises when it comes to the drug war.

The war on drugs is a failure. It has failed to prevent drug abuse. It has failed to keep drugs out of the hands of addicts. It has failed to keep drugs away from teenagers. It has failed to reduce the demand for drugs. It has failed to stop the violence associated with drug trafficking. It has failed to help drug addicts get treatment. It has failed to have an impact on the use or availability of most drugs in the United States.

None of this means that there is necessarily anything good about illicit drugs, but as Mises explains,

“It is an established fact that alcoholism, cocainism, and morphinism are deadly enemies of life, of health, and of the capacity for work and enjoyment; and a utilitarian must therefore consider them as vices.” 

But, as Mises contends, the fact that something is a vice is no reason for suppression by way of commercial prohibitions,

“nor is it by any means evident that such intervention on the part of a government is really capable of suppressing them or that, even if this end could be attained, it might not therewith open up a Pandora’s box of other dangers, no less mischievous than alcoholism and morphinism.”

The Case of “The Tall Man”

Real Freedom vs. Forcible Utilitarianism

By Michael S. Rozeff

“The Tall Man” is a movie that was released in 2012. It’s a crime drama that introduces a deep question in a way that anyone can understand: Is forcible utilitarianism right or wrong?

This article will contain a spoiler, because I am going to discuss the theme of “The Tall Man”, and I can’t do it without revealing the plot. If you are a movie-goer, watch the movie without reading reviews and reading this article. It’s a good, suspenseful and twisty movie. You will probably be caught up in it.

The story takes place in a really poor mining town in British Columbia that has lost the mine as a going concern. A complete summary is here. Children are being kidnapped. The people think that a mysterious figure that they call “The Tall Man” is responsible. Some have glimpsed him. Here’s the SPOILER. What’s actually going on is that a doctor and his nurse wife are stealing the children and placing them with wealthier families in a prosperous city. They are utilitarians who believe it is right to use force to produce a greater good for a greater number. The parents are heartbroken to lose their children, but the kidnappers think that weighs lighter than the better homes in which they are placing the children.

At the end, a question is raised and repeated three times by one of these children in her new environs. She wonders if she is better off. Here is what the wiki summary says about the ending:.

“Jenny lives in a beautiful home, where her art is encouraged and she has the best of everything. She has begun to talk and seems well-adjusted and happy. As she walks to an art class, she gives a voice-over expressing love and gratitude toward her three mothers: her birth mother, whom she misses; Julia, who gave her a chance at a new life; and her new mother, who is providing her with everything she could ever want. As she crosses a park, she sees David with his new family, which he now accepts as his own. (Jenny thinks he and the other younger ones have forgotten and do not recognize her, but the visual cues leave it decidedly open-ended.) Despite getting her wish of a better life, she sometimes wishes to return. Jenny’s closing thoughts question society’s implication that her new life is better.”

The summary is accurate. Jenny, who has been kidnapped and has material opportunities that she couldn’t have in the mining town, “sometimes wishes to return”.

How Our East Was Won

The Barbarous Years and the Conflict of Civilizations

The 1622 massacre of Virginia settlers depicted in a 1628 engraving by Matthaeus Merian.

By GENE CALLAHAN

Bernard Bailyn is one of the giants of early American historical scholarship. In recent years he has been engaged in a project “to give an account of the peopling of British North America in the seventeenth and eighteenth centuries.” Barbarous Years is the most recently released product of that effort. As we have come to expect from Bailyn, it is a magisterial work, which, for any reader interested in this period, more than repays the serious attention it requires. (The book is over 500 pages and dense in detail.)

Barbarous Years covers the period from the first permanent English settlements on the continent through King Phillip’s War. Besides discussing the English in the Chesapeake area and New England, this work also considers the Swedish and Dutch settlements along the Delaware and Hudson rivers. (South Carolina, founded in 1670, is left out.) Throughout this period the European toehold on the edge of the North American continent was precarious, and it was the sense of fragility, as well as the mutual incomprehension between the Europeans and Indians, that, Bailyn contends, made these years “barbarous.” Everything was uncertain in the new world being created by this clash of cultures. The constant threat felt to the very existence not just of oneself but of one’s whole community led to desperately brutal acts on the part of natives and newcomers alike.

Bailyn sets the background for his main narrative with a chapter describing the character of the native world before the arrival of the Europeans. Warfare in the world of the eastern forest Indians was frequent but often engaged in more like a sport than a life-and-death struggle. Although the Indians practiced agriculture, “cultivation of the fields did not bind one to the land” since farming was slash-and-burn rather than involving careful management of fixed plots. Thus, land ownership was not a relevant concept for the Indians, a fact that would lead to innumerable conflicts with the Europeans, as each side failed to comprehend the other’s ways of land use.

Especially fascinating is Bailyn’s description of the importance of dreams for the Indians. Rightly interpreted, dreams were guides to the best course of action: “A dream might oblige one to find sexual gratification with two married women; to sacrifice ten dogs; to burn down one’s cabin; even to cut off one’s own finger with a seashell.” But most importantly, he describes how the Indian’s world “was multitudinous, densely populated by active, sentient, and sensitive spirits, spirits with consciences, memories, and purposes, that surrounded them, instructed them.” These spirits demanded that things be maintained in a certain balance, a balance the arrival of Europeans would often disrupt, which the spirits might require the natives to redress.

George Orwell on the Media’s Toxic Self-Censorship

The enemy is the gramophone mind, whether or not one agrees with the record that is being played at the moment

by Maria Popova

In 1937, George Orwell got the idea for his now-classic dystopian allegory exploring the ferocious dictatorship of Soviet Russia in a satirical tale eviscerating Stalin’s regime. In his 1946 essay Why I Write, Orwell remarked that this was his first conscious effort “to fuse political purpose and artistic purpose into one whole.” But by the time he finished it six years later, in the middle of World War II and shortly before the start of the Cold War, the book’s decidedly anti-Soviet message presented an obvious challenge in politically cautious Britain. The manuscript was rejected by four major houses, including Orwell’s publisher of record, Gollancz, and T. S. Eliot himself at Faber and Faber.

Perhaps even more interesting than the story of the book, however, is the prescient essay titled “The Freedom of the Press,” which Orwell intended as a preface to the book. Included in Penguin’s 2000 edition of Animal Farm (public library) as “Orwell’s Proposed Preface to Animal Farm,” the essay — penned more than seven decades after Mark Twain bewailed that “there are laws to protect the freedom of the press’s speech, but none that are worth anything to protect the people from the press” — tackles issues all the more timely today in the midst of global media scandals, vicious censorship, and near-ubiquitous government-level political surveillance.

Orwell begins by excerpting a letter from a publisher who had originally agreed to publish the book but later, under the Ministry of Information’s admonition, recanted:

I mentioned the reaction I had had from an important official in the Ministry of Information with regard to Animal Farm. I must confess that this expression of opinion has given me seriously to think … I can see now that it might be regarded as something which it was highly ill-advised to publish at the present time. If the fable were addressed generally to dictators and dictatorships at large then publication would be all right, but the fable does follow, as I see now, so completely the progress of the Russian Soviets and their two dictators, that it can apply only to Russia, to the exclusion of the other dictatorships. Another thing: it would be less offensive if the predominant caste in the fable were not pigs. I think the choice of pigs as the ruling caste will no doubt give offense to many people, and particularly to anyone who is a bit touchy, as undoubtedly the Russians are.

Noting the general menace of such governmental meddling in the private sector of publishing and the resulting censorship, Orwell bemoans the broader peril at play:

The chief danger to freedom of thought and speech at this moment is not the direct interference of … any official body. If publishers and editors exert themselves to keep certain topics out of print, it is not because they are frightened of prosecution but because they are frightened of public opinion. In this country intellectual cowardice is the worst enemy a writer or journalist has to face. … The sinister fact about literary censorship in England is that it is largely voluntary.

Is Water a Human Right?

We need another paradigm, to put self-interested individual creativity in the service of managing, delivering, and preserving our world’s precious water

By Kendra Okonski

Hundreds of millions of people around the world lack regular access to clean water and sewerage. In many parts of the globe, obtaining water for everyday use requires an enormous diversion of time and effort. And beyond thirst and reduced productivity, the lack of clean water has very serious health consequences: Dirty water can transmit parasites, bacteria, and viruses and can inhibit sanitation, resulting in millions of cases of water-borne diseases each year, many deadly. The “global crisis in water,” as a 2006 United Nations report put it, “claims more lives through disease than any war claims through guns.” In short, the unavailability of clean water easily ranks among the most serious problems facing humanity.

Over the past decade, clean-water scarcity has been the subject of hundreds of academic studies, improving our understanding of its causes and its scope and identifying many possible solutions. At the same time, however, the problem has also been the focus of a burgeoning activist movement that tends to be less reflective and less constructive. These activists deem access to water a human right — one that is under constant assault by corporate malefactors.

Two recent documentaries, Thirst and Flow, make the case for the water-rights movement. They are cinematically beautiful, showing vividly colorful locales; stunning footage of water dripping, trickling, splashing, and crashing about; and dozens of scholars and activists who can be admired for their energy and passionate commitment to ameliorating very real health and environmental problems. Both documentaries offer an illuminating window into the central assumptions held by this growing movement: Because water is a natural resource necessary for human survival, access to clean water is a human right. Water belongs to all; it is not a commodity that can be legitimately privately owned. Water should be provided by governments; it is immoral to profit from its sale.

These propositions raise important questions. If access to water is a human right, does every human have a right to consume as much water as he wishes, regardless of time and place? If not, to what quantity of water does each individual have a right? Does it vary by circumstance? Whose responsibility is it to provide that water to users? At whose expense? How are disputes between different users of water to be settled? How do we encourage more efficient use of water?

Unfortunately, neither Thirst nor Flow adequately addresses these practical questions arising from their core convictions. Instead, both documentaries tell us that water is part of an inviolate “global commons” that must not be owned, traded in markets, or otherwise sullied by private enterprise. Once the right-to-water premise is established, it’s not difficult to sort the Davids from the Goliaths. From Bolivia to India to small-town America, the documentaries show us how oppressed communities are rising up against profiteering multinational companies and their cronies in the World Bank and International Monetary Fund, which are colluding to trample on the people’s right to water.

Two cheers for nuclear

The UK government has sealed a deal for new nuclear power stations. About time, too.

By ROB LYONS

Top the corks: nuclear is back! The UK government has finally agreed a deal (subject to EU approval) for the building of two new nuclear reactors at Hinkley Point, already home to two ageing reactors. Due to be completed in 2023, Hinkley Point C should provide up to 3,200 megawatts (MW) of electricity - equivalent to seven per cent of UK electricity demand. It’s been quite a wait. The last new nuclear station to come online in the UK was Sizewell B in 1995.

After years of attacking nuclear, then offering mere permission for new nuclear build, the UK government has finally admitted that nuclear energy is needed and it requires substantial financial support. The new station will cost a cool £16 billion. However, rather than simply build the power stations itself, it has agreed to pay a high price for the electricity generated, offering the operators - EDF and its partners - at least £92.50 per megawatt hour (MWh). The only way this looks good is in comparison to renewables; offshore windfarms currently receive £135 per MWh. The difference is the tie-in: Hinkley Point C will receive that inflated price for 35 years; offshore windfarms only get the guarantee for 15 years. By comparison, electricity generated from coal and gas currently costs £55 per MWh.

This could be the start of a renaissance for nuclear power in the UK. Included in the current deal is the potential for another nuclear station at Sizewell. Other groups are waiting in the wings to agree deals for new stations at Anglesey and Sellafield.

Hayek on Morality

No one can do what is morally right when this is being dictated to or coerced from another person

by Tibor R. Machan

When he was about to receive the Nobel Prize in economic science, I interviewed F. A. Hayek for Reason magazine (at his home in Salzburg, Austria). Although he didn’t believe that political economists should dwell on ethical issues per se, he was by no means “necessarily a moral relativist” as Francis Fukuyama asserts in his Sunday New York Times Book Review piece (5-8-2011) of the new edition of The Constitution of Liberty (edited by Ronald Hamowy for the University of Chicago Press, 2011).

Hayek did, of course, object to the notion, mentioned by Fukuyama, that “there is a higher perspective from which one person can dictate another’s ends.” However, the stress here needs to be on “dictate.” No one can do what is morally right when this is being dictated to or coerced from a person. That isn’t at all because ethics or morality is subjective or relative. It is because to hold someone responsible for either morally right and wrong actions, it is that person who has to be the cause of it. The criminal law recognizes this, as have most moral philosophers. And when it is denied that one has free will or can exercise free choice about what one will or will not do, morality disappears. This is why so many thinkers who embrace determinism either reject morality as bogus or transform it into a social psychological device by which desired behavior might be encouraged or prompted from people. (A good example is much of the current work by nureoscientists!)

As Hayek put it elsewhere, “It is only where the individual has choice, and its inherent responsibility, that he has occasion to affirm existing values, to contribute to their further growth, and to earn moral merit.” (“The Moral Element in Free Enterprise,” Studies in Philosophy, Politics and Economics [New York: Simon & Schuster, 1967], pp. 230.) However, this view does not depend on moral relativism but on the ancient idea, held by most moral philosophers, that for conduct to be morally significant, it must be done freely, as a matter of the free choice of the moral agent.

Civilization Versus Barbarism

Two Phases of Human History

It is becoming clearer and clearer to us. Perhaps we have been drinking too much. Or maybe we have had a stroke. But we see two major phases of human history.

The first: “nasty, brutish and short,” to borrow a phrase from English political philosopher Thomas Hobbes. The second: a civilized world with frequent relapses into barbarity. Look what happened many thousands of years before “civilization” first appeared in Egypt, Mesopotamia, India and China? We don’t really know. We weren’t there. But let’s take a guess.

Everybody wants to get ahead – by getting more money, more power or more status than his neighbors. How do you do that today? You invent a killer app! Or you set up a hedge fund. Or you write a best-selling novel. You can compete by trying to achieve something important. Or you can run for Congress.

But how could you get ahead in the days before moveable type, agriculture and Facebook? What could you invent? Nothing. There was so little old technology in use that there was almost no room for new technology. No wheels. No power. No electronics or mechanics. What about success in business or investment? Forget it. Capitalism hadn’t evolved yet.

What about art? Music? From what we’ve seen on the walls of caves, art was very… well… primitive. For most of his time on earth – about 200,000 years – man lived so near the edge of survival that there was little surplus available to support the arts or an elaborate culture. Until about 5,000 years ago, there were no musical instruments, no writing of any sort, no sophisticated tools.

How then did men compete? How did they show each other who was boss? Again, we don’t know. But it seems most likely that they competed at hunting… and fighting. A primitive man could really only gain an advantage by killing something – just like other predators in the animal kingdom.

Rousseau’s idea of the noble savage was an illusion. Studies of pre-civilized tribes suggest that man gained the most status by killing another man. Tribes living on the American plains continued this custom until only about 150 years ago, taking the scalps of their slain enemies as proof of their “achievement.”
Even in the time of the Roman Empire, the highest honor a Roman general could receive was for killing an opposing general in personal combat.

With some important exceptions, there was no way to get rich in the ancient world, except by taking someone else's property. This is what people did… or tried to do.

Until the advent of capitalism, it was the only way to get ahead. You took someone else's land, his wives and his family – turning as many as possible into slaves. In North and South America, for example, until deep into the 19th century, native tribes typically killed their male enemies… and took their women and children into captivity. In supposedly civilized communities, too, slavery was popular. Owning slaves was not only acceptable, it was a mark of superiority.

The more slaves you had, the higher your social rank. Slave-holding was so much a part of life that even Christ – who preached “love thy neighbor” – made no mention of it. And the US Constitution – a blueprint for the most civilized political system yet designed – also tolerated slavery by omission.

Today, the pay-off from slavery and murder is less sure. We still put elk heads on our walls. We still award medals to particularly good soldiers. But we live in a society that is basically civilized. And in civilized life, killing other people is generally frowned upon, if not censured, proscribed and punished. Slavery has been abolished in most of the world. We still have wage slaves… and tax slaves. But chattel slavery has largely disappeared.

Today, we channel our competitive urges into many different activities. Some people drive expensive cars. Some build mega-mansions. We have team sports, including American football, in which one team acts as though it were trying to kill the other.

But it is in business, careers and investment that people find competition most rewarding. Traders on Wall Street talk about “ripping the faces off” their rivals. Entrepreneurs read about military strategists Sun Tzu and Carl von Clausewitz for hints on how to win their next campaign.

And now, thanks to modern capitalism, you can get wealthy without taking anything away from others. Wealth is no longer a zero-sum game. The world’s wealth can be increased by hard work, saving, innovation and investment. People who succeed at capitalism gain wealth. And, in America, status too. They make themselves rich… and they enrich their neighbors in the process.

It’s not a perfect system. But it works remarkably well … if left alone. 

Regime Uncertainty in France

Getting Something for Nothing

The always slightly befuddled looking French president cultivates the image of a friendly uncle. He is in reality a cynical power-hungry bureaucrat-politician. It is not certain whether he is really as economically illiterate as he appears or if his policies are solely designed to keep his power-base happy, but probably it is a mixture of both.

by Pater Tenebrarum

A recent article by Anne-Elisabeth Moutet in the Telegraph has caught our attention, because it nicely demonstrates the corroding effect regime uncertainty has on the economy as exemplified by the situation in France. The article is entitled “Down and out: the French flee a nation in despair” and is well worth reading in its entirety.

'Regime uncertainty' pertains when the main focus of businessmen and other actors in the economy turns to a single question: 'what idiocy will the government think of next?'.

In France this question has become so highly relevant that it has led to economic paralysis and a seemingly unstoppable exodus of the country's best and brightest. If this continues, only the government moochers will be left and will eventually be forced to live from hand to mouth. Ms. Moutet's article starts out by noting that even the notoriously anti-capitalistic French public currently thinks the socialist government has gone too far: 

“More than 70 per cent of the French feel taxes are “excessive”, and 80 per cent believe the president’s economic policy is “misguided” and “inefficient”. This goes far beyond the tax exiles such as Gérard Depardieu, members of the Peugeot family or Chanel’s owners. Worse, after decades of living in one of the most redistributive systems in western Europe, 54 per cent of the French believe that taxes – of which there have been 84 new ones in the past two years, rising from 42 per cent of GDP in 2009 to 46.3 per cent this year – now widen social inequalities instead of reducing them.

This is a noteworthy departure, in a country where the much-vaunted value of “equality” has historically been tinged with envy and resentment of the more fortunate. Less than two years ago, the most toxic accusation levied at Nicolas Sarkozy was of being “le président des riches”, favouring his yacht-sailing CEO buddies with tax breaks and sweet deals. By contrast, Hollande, the bling-free candidate, was elected on a platform of increasing state spending by promising to create 60,000 teachers’ jobs, as well as 150,000 subsidised entry-level public-service jobs for the long-time unemployed and the young – without providing for significant savings elsewhere.” 

(emphasis added)

Hollande essentially promised his voters that they could get something for nothing. Now they are finding out that this isn't quite true. The government has no resources of its own and in France (and also other euro area economies) this fact is more easily seen than elsewhere as a side-effect of euro area membership. Ordinarily the government could create a temporary illusion of there being a fount of riches by means of inflation. It could also do this by increasing its indebtedness, but neither avenue is really available to Hollande's government. It cannot force the ECB to print it out of trouble, and due to the EU's 'fiscal pact' and the ever-present threat of markets throwing a fit, it cannot increase its debt willy-nilly either. Thus the government's redistributive measures require ever higher taxes. The 'free goodies' have turned out not be so free after all. 

Botched Communications and the Exodus of Wealth Creators

The government's haphazard taxation policy happens to be one of the main sources of 'regime uncertainty' in France. Many new taxes are announced, or rather leaked, long before they are implemented, leading to guessing games as to who will be next on the lengthening list of victims. 

Natural Resources and the Environment

A leading problem of our time is not environmental pollution but philosophical corruption

by George Reisman

There is a fundamental fact about the world that has profound implications for the supply of natural resources and for the relationship between production and economic activity on the one side and man’s environment on the other. This is the fact that the entire earth consists of solidly packed chemical elements. There is not a single cubic centimeter either on or within the earth that is not some chemical element or other, or some combination of chemical elements. Any scoop of earth, taken from anywhere, reveals itself upon analysis to be nothing but a mix of elements ranging from aluminum to zirconium. Measured from the upper reaches of its atmosphere 4,000 miles straight down to its center, the magnitude of the chemical elements constituting the earth is 260 billion cubic miles.This enormous quantity of chemical elements is the supply of natural resources provided by nature. It is joined by all of the energy forces within and surrounding the earth, from the sun and the heat supplied by billions of cubic miles of molten iron at the earth’s core to the movement of the tectonic plates that form its crust, and the hurricanes and tornadoes that dot its surface.

Of course, in and of itself, this supply of natural resources is largely useless. What is important from the perspective of economic activity and production is the subset of natural resources that human intelligence has identified as possessing properties capable of serving human needs and wants and over which human beings have gained the power actually to direct to the satisfaction of their needs and wants, and to do so without expending inordinate amounts of labor. This is the supply of economically useable natural resources.

The supply of economically useable natural resources is always only a small fraction of the overall supply of natural resources provided by nature. With the exception of natural gas, even now, after more than two centuries of rapid economic progress, the total of the supply of minerals mined by man each year amounts to substantially less than 25 cubic miles. This is a rate that could be sustained for the next 100 million years before it amounted to something approaching 1 percent of the supply represented by the earth. (These estimates follow from such facts as that the total annual global production of oil, iron, coal, and aluminum, can be respectively fitted into spaces of 1.15, .14, .5, and .04 cubic miles, based on the number of units produced and the quantity that fits into one cubic meter. Natural gas production amounts to more than 600 cubic miles, but reduces to 1.1 cubic miles when liquefied.) Along the same lines, the entire supply of energy produced by the human race in a year is still far less than that generated by a single hurricane.