The fallacy of the benign ruler

The Inside World of an Economic Hitman

Below are clips from a speech given by John Perkins author of, Confessions of an Economic Hitman.

Although the speech was delivered in 2006, it is as relevant today as it was 5 years ago. It is an insider's account of how the IMF, World Bank and similar organizations muscle small countries for the benefit of the power elite. You have never heard a speech like this before. The full first clip, along with roughly the first 15 minutes of the second clip, are most informative. Perkins continues on after that, but at that point he calls for a new central type plan to organize the world. In other words, he doesn't get that it is central power that is the problem.
If his central power plan were to be implemented, the elitist bad guys would capture that power structure, just like they have captured the current power structure.
Amazingly, after Perkins describes in detail how the power structure he saw up close was an instrument of evil, he doesn't get what Hayek warned about, that the worst always get to the top. The real solution is free markets, where no one lords over another.
That said, the first clip, and half of the second, are awesome in describing how the power elite operate.

Heavenly Dream and the God-Awful Reality

David Mamet's Coming Out Party

"Before he moved to California, Pulitzer Prize-winning playwright David Mamet had never talked to a self-described conservative. 'I realized I lived in this bubble."

By BARI WEISS

In March 2008, David Mamet was outed in the Village Voice. The Pulitzer Prize-winning playwright had a comedy about an American president running on Broadway, and—perhaps to help with ticket sales—decided to write an article about the election season. The headline was subtle: "Why I Am No Longer a 'Brain-Dead Liberal.'"

"They mistitled it," he insists. Mr. Mamet had given the piece the far more staid title, "Political Civility." But the Voice's headline was truth in advertising. "I took the liberal view for many decades, but I believe I have changed my mind," Mr. Mamet wrote, referring to his prior self as, yes, a "brain-dead liberal."

The article was the most popular ever published on the Voice's website. But was the acclaimed Mr. Mamet really a conservative?

For a few years, he played it coy. In a 2008 interview with New York Magazine, he sloughed off a question about who he was voting for: "I'm not the guy to ask about politics. I'm a gag writer." In 2010, he told PBS's Charlie Rose he'd only offer his opinion about President Obama off-camera.

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Ken Fallin

But spend five minutes with Mr. Mamet and you realize that coy can only last so long. "Being a rather pugnacious sort of fellow I thought, as Albert Finney says in 'Two for the Road': 'As I said to the duchess, 'If you want to be a duchess, be a duchess. If you want to make love, it's hats off.'"

Hats off, indeed. Now Mr. Mamet has written a book-length, raucous coming-out party: "The Secret Knowledge: On the Dismantling of American Culture." (If only the Voice editors had been around to supply a snappier title.)

Hear him take on the left's sacred cows. Diversity is a "commodity." College is nothing more than "Socialist Camp." Liberalism is like roulette addiction. Toyota's Prius, he tells me, is an "anti-chick magnet" and "ugly as a dogcatcher's butt." Hollywood liberals—his former crowd—once embraced Communism "because they hadn't invented Pilates yet." Oh, and good radio isn't NPR ("National Palestinian Radio") but Dennis Prager, Michael Medved and Hugh Hewitt.

The book is blunt, at times funny, and often over the top. When I meet the apostate in a loft in Manhattan's Greenwich Village, he's wrapping up a production meeting. "Bye, bye, Bette!" he calls to the actress walking toward the elevator. That'd be Bette Midler. Al Pacino gets a bear hug. The two are starring in an upcoming HBO film about Phil Spector's murder trial. Mr. Mamet is directing and he looks the part in a scarf, black beret and round yellow-framed glasses. Looking out the window at NYU film school, where he used to teach, I ask him to tell me his conversion story.

More Fifth Column than Fourth Estate

by Andrew J. Coulson

Citing new Census figures, the New York Times claims that “public school districts spent an average of $10,499 per student on elementary and secondary education in the 2009 fiscal year.” But according to the most recent issue of the Digest of Education Statistics, expenditures haven’t been that low for over a decade. In the last year reported, 2007-08, total expenditures per pupil in average daily attendance were already $12,922 (in 2008-09 dollars). Adjusting for inflation, that’s about $13,500 in today’s dollars. (Looking at spending per student enrolled, rather than per student actually taught, lowers the total figure, but not by that much).

So what gives? How can the Times claim that public school “spending” is $3,000 lower than it actually is?

They simply exclude a huge swath of expenditures in the number that they call “spending,” without telling readers they have done so. Specifically, they ignore spending on things like… buildings. Correct me if I’m wrong, but I don’t think American public schools have returned to Plato’s practice of holding lessons in an olive grove. Until they do, they will use buildings. Buildings cost money. They aren’t erected, for free and fully furnished, from the mind of Zeus.

Not only does this arbitrary and unjustifiable exclusion of capital expenditures from the reported “spending” figures wildly mislead the public about what schools are really costing them, it also misleads the public about the trends in spending. As my colleague Adam Schaeffer reveals in the chart below, spending on physical facilities has increased at a far faster rate than other expenditures (remember those Taj Mahal schools?). So by channeling David Blaine and making capital spending disappear, the Times also misrepresents real spending growth. In so doing, they undermine the public’s and lawmakers’ ability to make sound policy decisions regarding education. If the Times prominently corrects this glaring error I will be utterly shocked.

Doritos smuggling

Raw Onions Served As Snack in D.C. Schools

by Walter Olson

Fifty-three elementary schools in the District of Columbia take part in the federal government’s Fresh Fruit and Vegetable Program, a recently ramped-up federal initiative that dishes out millions to local schools to get them to use raw produce as snacks. According to the Washington Examiner, it was by inadvertence that students at Turner Elementary School were given raw green onions (scallions) as a snack the other day when they were supposed to be given zucchini slices instead. Children were observed making “yuck” faces before throwing the offerings in the trash or, in some cases, resourcefully tucking them into their bags to take home for their parents to cook.

Are we sure this is the best way to keep students from sneaking Doritos into the building?

On a less tear-inducing note, the school board in the town of Darien, Conn. has unanimously voted to pull out of the federal school lunch program. Finance director Richard Huot cited current and forthcoming federal mandates that, among other things, ban chocolate milk, discourage reliance on refillable sports water bottles, and require schools to push salads in preference to longtime favorites such as fruit. The regulations also drive up labor costs, Huot said, and make the lunch program more complex to run generally. “The children in this town are savvy consumers,” Huot said. “You put a lousy product on the table; they are not going to buy it.”

As a famously affluent suburb, Darien can afford to turn down the bribes — sorry, subsidies — that come with doing it Washington’s way. Isn’t it a shame so many other communities feel they have no real financial choice but to go along?

Econ 101

North Sea production slumps after Budget tax hike

from the newspaper UK Independent

"North Sea oil production has slowed to its lowest level since records began 15 years ago following the Chancellor of the Exchequer's recent tax raid on the industry. An update from the U.K. Department of Energy yesterday showed the biggest fall in oil production since quarterly records started in 1995. Gas production fell 17.6 per cent from a year ago.The slowdown follows the Chancellor's controversial Budget decision to increase the supplementary tax on North Sea Oil production to 32 per cent from 20 per cent to pay for a cut in petrol duty. The Chancellor's decision drew an industry-wide outcry and claims that mature fields would be closed.An Oil and Gas UK survey warned that a quarter of 240 potential projects in the North Sea were less likely to go ahead after the tax increase."

Ideological regulation

Savage Nation vs Halfwit State

by Mark Steyn

I wrote two years ago about the British Government’s decision to ban Michael Savage from the United Kingdom. In his letter to Secretary Clinton, Congressman Allen West points out that Her Majesty’s Government chose to add to a list of Russian mass murderers and Hamas terrorists the name of a law-abiding citizen of the United States – and, as I pointed out back in 2009, did so on an utterly cynical and fraudulent basis. 

I’ve lost touch a bit with the case since then, but I can’t say I was surprised to discover this week that the new “Conservative” Home Secretary has upheld the exclusion order of her Labour predecessor. The letter from a bloke called Michael Atkins, for the Treasury Solicitor, is a remarkable document – not least the reference in 3 (c) to the “allegation” (as Atkins puts it) that Savage “has many homosexual friends and respects Islam as a great religion”.

Why should admission to the United Kingdom be conditional on either of these no doubt splendid attributes? Is there a minimum number of homosexual friends you need to get past Heathrow? Indeed, how many of the many immigrants to Britain who “respect Islam as a great religion” have “homosexual friends”?

I can’t help feeling (in light of my own experience up north) that it was a waste of time for Savage’s counsel to get into the weeds with HMG on this stuff. The issue here is a once free society’s grotesque embrace of ideological enforcement at the border. A land that was once the crucible of liberty betrays its own inheritance. How could any English solicitor, even a government hack, write the following?

Your client has not provided any evidence to show that he did not commit the unacceptable behaviour.

But the Home Office has never specified what if anything Savage “committed”. In civilized societies, the burden of proof is on the accuser. Here it’s not even clear what Savage is required to disprove. So much for the presumption of innocence. Everything about this squalid business underlines how quickly free speech is shriveling in Europe and how comfortable governments have grown with the ideological regulation of public discourse. 

Mark Steyn at his very best

Top Regulator To Wipe Away Tears Shed Over Spilled Milk

by Mark Steyn

Cass Sunstein is head of something called the "Office of Information and Regulatory Affairs." I've seen enough conspiracy thrillers to know that when someone has so obvious a blandly amorphous federal job description as that, it means he's running some deeply sinister wet-work operation of illegal targeted assassinations in unfriendly nations that the government spooks want to keep off the books and far from prying eyes.

Oh, no, wait. Actually, Covert Operative Sunstein passes his day doing more or less what the sign on the door says: He collects information about regulatory affairs. More specifically, he is charged by the president with "an unprecedented government-wide review of regulations" in order to "improve or remove those that are out-of-date, unnecessary, excessively burdensome or in conflict with other rules."

How many has he got "removed" so far?

Well, last week he took to the pages of the Wall Street Journal to crow that dairy farmers will henceforth be exempted from the burdens of a 1970s EPA-era directive classifying milk as an "oil" and subjecting it, as Professor Sunstein typed with a straight face, "to costly rules designed to prevent oil spills."

But Ol' MacDonald and his crack team of Red Adair-trained milkmaids can henceforth relax, because now, writes Sunstein, Washington is "giving new meaning to the phrase, 'Don't cry over spilled milk.' "

That's a federally licensed joke from Sunstein's colleagues at the Agency of Guffaw and Titter Regulation, so feel free to laugh.

Did you know milk was an oil? It is to the federal government, and, if a Holstein blows in the Gulf of Mexico and beaches from Florida to Louisiana are suddenly threatened by a tide of full-fat crude, they want to know you've got the federally mandated equipment to deal with it.

With hindsight, the president's remark in the early days of the BP oil spill that he was meeting with experts "so I know whose ass to kick" was not just a bit of vulgar braggadocio but the fault of early Department of Energy findings that the spillage was caused by asses' milk from BP (Burros & Poitous, a member of the Big Ass cartel).

"Your ass is on the line!" as the president told BP's Tony Hayward after his donkey was found wandering down the first $38 billion stretch of the federally funded high-speed rail track.

Whoops, sorry, I made the mistake of hiring Cass Sunstein's federally accredited "spilled milk" gag writer. Where was I?

Oh, yeah, federal regulation. So this EPA directive requiring milk to be treated the same as petroleum for the purposes of storage and transportation has been around since the Seventies, and it's only taken the best part of four decades to get it partially suspended even though it's udderly insane? Hallelujah!

At that rate of regulatory reform, we'll be ... well, let Sunstein explain it. Aside from his crowing over spilled milk, he cites other triumphs: The Departments of Commerce and State are "pursuing reforms"; the Department of Health and Human Services "will be reconsidering burdensome regulatory requirements"; and the Department of the Interior will be "reviewing cumbersome, outdated regulations."

Is it really a mystery?

A One-Man Insurgency

BY ANNA BADKHE

Beneath a span beam bridge at the northern border of this 

provincial capital, the Maimana River trickles to a dun seep and turns to dust. Behind it, the layered escarpments of Turkestan Mountains' 12,000-foot crest fade to opal, then to nothing, evanescing into the blown-glass sky.

Between the mountains and the stream, on the dusty outskirts of Maimana, a handful of quivering flags mark the newest shrine in Faryab province: the grave of Samaruddin, a young border police officer killed by NATO troops after he murdered two American soldiers last month.

In this land of transubstantiation, the double metamorphosis of a policeman into a murderer and then, almost instantaneously, a saint lays bare the ultimate fulcrum for all the defeats of all the invasions that have befallen Afghanistan since time immemorial: the fervent, almost mystical, hatred of the occupier. A hatred that scores the face of every swallow-burrowed scarp, nourishes the root of every fruit tree, and supercedes all other loyalties and enmities. Even the cops in Maimana call Samaruddin "the shahid": the martyr.

"It's a religious thing," explained Col. Bismillah, a district police chief in whose Maimana suburb of domed clay houses and withering apricot orchards Samaruddin's body was buried. "Here in Afghanistan we believe infidels have martyred him for his faith."

On April 4, after what Samaruddin's supervisors say were three impeccable years of exemplary service, the 22-year-old man was manning a checkpoint outside the border police headquarters, a few dozen paces away from the bridge over the dying river. Several armored vehicles arrived, delivering American soldiers to train Samaruddin's fellow officers at the headquarters. All of a sudden, Samaruddin leveled his Kalashnikov at the foreigners and opened fire, killing two soldiers. When his rifle clip was empty, he ran off.

Two days later, NATO forces tracked him down in southern Maimana, where he was hiding in a friend's house, and shot him dead.

Malthusian lament

More People, Please

BY CHARLES KENNY

Acolytes of Thomas Malthus -- the prudish 18th-century parson whose influence has considerably outlasted the accuracy of his predictions -- are generally predisposed toward gloom-and-doom, but their hand-wringing has been especially intense the past several weeks. With its latest population forecasts predicting the world population may surpass 10 billion people by the end of the century, the United Nations has stoked age-old fears that the planet may not be able to sustain all of the human beings trying to live on it. As the number of souls on the planet ticks ever higher, the Malthusians lament, misery will flourish.

But for selfish and altruistic reasons alike, we should be delighted that there are more people on the planet than ever before -- and billions more to come. Yes, there are problems to remedy as the world population continues to rise: Not least, many women still lack freedom to decide how many children to have and the lifestyles of rich people living in places like the United States, Europe, and Japan threaten global sustainability. Yet as we get ready to welcome the birth of the seven billionth person later this year, the mood should be celebratory, not dour.

Why is a growing population a good thing? For a start, most people seem to be pretty happy to be alive. The tragedy of suicide remains a comparatively rare cause of death worldwide, thankfully. And only in a very few countries across the globe do most respondents suggest in polls that they are unhappy: in Bangladesh, despite low incomes and poor health, 85 percent of the population suggests they are happy, and in Nigeria and China that number is nearly three quarters. Simply put, having the opportunity to be alive is a good thing, and the more such opportunity exists, the better. (Another bit of good news from the U.N. projections -- average global life expectancy will rise from around 68 years today to 81 in 2100, so we'll all have a little bit longer to enjoy it.)

So why all the anxiety about a growing population? We all enjoy friends and family, and generally the more, the merrier -- but our friendliness toward humanity can be selfishly local: when it comes to people we don't know, some argue less is more. Fewer teeming masses in Africa (the population of which the U.N. projects will triple by 2100) would be a good for our fragile planet, according to people in the United States. More people today means a worse life for tomorrow, and more people tomorrow means a catastrophe the day after.

Such thinking has persisted despite being fundamentally misguided. Malthus sparked these concerns 200 years ago when the global population was around a billion, and frankly it's easy to see why he was depressed: back then, rising populations really were often associated with declining health and incomes. But the centuries in the interim have seen the global abolition of slavery, advances in communication that render the vast majority of the planet instantaneously interconnected, stunning improvements in global health, the unprecedented spread of education and political and civil rights -- and the most dramatic expansion of global population, to boot. Even at the family level, the evidence for a "quantity-quality tradeoff" -- more kids meaning a worse life for each one of them -- appears weak.

Yes, threats to global sustainability are clear and present dangers. But the 10,760-fold increase in aluminum production reported by environmentalist Clive Ponting, or the 380-fold increase in oil production, or even the 24-fold increase in global GDP over the course of the last century isn't driven by population growth. It is growing consumption per person that is the problem. And that, of course, is not the fault of Africans. The blame lies with wealthy countries that do nearly all of the consuming. The poorest 650 million people on the planet live on about 1 percent of the income of the richest 650 million. Each year, we add 1 percent or more to the incomes of those richest people - GDP per capita growth rates in wealthy countries are at least that high.  And that 1 percent growth has the same impact on global consumption as woulddoubling the number of people living on the income of that bottom 650 million of the world's population. So, those people sitting in rich countries pontificating on unsustainable global populations might want to start off with the bit of that population they see in the mirror every morning.

Of course, while people are generally a positive addition to the world, women should undoubtedly have a choice about how many children they want. Every year, about 80 million women face an unwanted pregnancy, 20 million risk an unsafe abortion rather than carry their pregnancy to term and 68,000 die as a result, part of a half-million annual toll of maternal mortalities. Safe and confidential access to modern methods of contraception can and should be a right -- it is a cheap enough intervention to be affordable worldwide.

And for those who remain committed misanthropes, if you really want fewer people around, there are ways to reduce population growth while improving the quality of life for everyone. For a start, high mortality and fertility rates are related. Parents have more kids when there's a higher risk of them dying, so one of the most direct routes to reduced fertility is progress in child health. And girls' schooling is related to improvements in both. So support aid programs or increased immigration or pro-poor trade policies that will provide disadvantaged people the resources they need to keep kids alive and educated.

Still, for those who claim to be acting in the interests of future generations, "making them smaller" isn't the answer.  Go out and campaign against urban sprawl, Hummers, coal power plants, and whaling -- but leave people alone.

The burden of privilege

The Perils of 'Accidental' U.S. Citizenship

by Mark Nestmann

Compared to most other countries, it’s comparatively easy to acquire U.S. citizenship.

You become a U.S. citizen merely by birth within the geographic boundaries of the United States. In most cases, you’re also a U.S. citizen if you were born outside the United States, and at least one parent was a U.S. citizen or green card holder. In both these examples, citizenship is automatic. Generally, you need not take any affirmative action in order to acquire or retain U.S. nationality. Only in the case of naturalization after an extended period of legal residence in the United States do you need to make a petition for U.S. citizenship and passport.

The ease of acquiring U.S. citizenship by birth means that there are hundreds of thousands of “accidental” U.S. citizens roaming the world. Many of these individuals don’t realize they’re U.S. citizens.

Nonetheless, because the United States, alone among major nations, imposes income tax, capital gains tax, gift tax, and estate tax based on citizenship, accidental U.S. citizens have the same fiscal responsibilities as U.S. citizens resident in, the United States. Among other obligations, they must file a U.S. personal tax return annually and pay any tax due. They must also file a gift tax return to report details of any gifts they make in any one year that exceed $13,000. If they make lifetime gifts more than $5 million, they must pay gift tax on the excess.

Finally, at death, their heirs must file a U.S. estate tax return and pay estate tax at a top rate of 35% (increasing to 55% in 2013). The estate tax applies to all property owned by the deceased U.S. citizen, valued at its “highest and best use.” (An estate tax treaty or credit for estate tax paid in another jurisdiction may reduce this burden.)

Numerous additional obligations also come with U.S. citizenship. For instance, all U.S. citizens must disclose any investments in non-US “bank, financial, or other financial accounts.” Failure to make this disclosure is punishable with a fine up to $250,000 and a five-year prison sentence.

A Principle without Principle

The Problems with Precaution

‘Better safe than sorry’ isn’t always safer. In fact, when it comes to policies to protect public health and the environment, this type of thinking could harm us.

By Jonathan H. Adler 

It’s better to be safe than sorry. We all accept this as a commonsense maxim. But can it also guide public policy? Advocates of the precautionary principle think so, and argue that formalizing a more “precautionary” approach to public health and environmental protection will better safeguard human well-being and the world around us. If only it were that easy.

Simply put, the precautionary principle is not a sound basis for public policy. At the broadest level of generality, the principle is unobjectionable, but it provides no meaningful guidance to pressing policy questions. In a public policy context, “better safe than sorry” is a fairly vacuous instruction. Taken literally, the precautionary principle is either wholly arbitrary or incoherent. In its stronger formulations, the principle actually has the potential to do harm.

Efforts to operationalize the precautionary principle into public law will do little to enhance the protection of public health and the environment. The precautionary principle could even do more harm than good. Efforts to impose the principle through regulatory policy inevitably accommodate competing concerns or become a Trojan horse for other ideological crusades. When selectively applied to politically disfavored technologies and conduct, the precautionary principle is a barrier to technological development and economic growth.

It is often sound policy to adopt precautionary measures in the face of uncertain or not wholly known health and environmental risks. Many existing environmental regulations adopt such an approach. Yet a broader application of the precautionary principle is not warranted, and may actually undermine the goal its proponents claim to advance. In short, it could leave us more sorry and even less safe.

The Precautionary Principle Defined

According to its advocates, the precautionary principle traces its origins to the German principle of “foresight” or “forecaution”—Vorsorgeprinzip.1 This principle formed the basis of social democratic environmental policies in West Germany, including measures to address the effects of acid precipitation on forests.² Germany was not alone, as other nations also adopted precautionary measures to address emerging environmental problems. So did various international bodies.³

No comment

Caveman's economics

The Problem Began When the Invention of the Spear Reduced the Price of Food

by DON BOUDREAUX

Speaking on this morning’s program about prices in Japan, the BBC’s Roland Buerk opined that “it really becomes a habit for people. You know, companies start to pander to people’s needs to pay less.  McDonald’s for example introduced a 100 yen – just over $1 – menus a few years ago.  There’s a battle between companies to make jeans for the cheapest possible price.  You can buy a pair of jeans for about $5 now in Japan.  Once you’re in that downward spiral, it’s very hard to pull out of it.”

Huh??

Mr. Buerk’s knee-jerk hostility to deflation leads him to lament thefundamental source of economic growth and widespread prosperity: efficiencies and innovations driven by competition.

Deflation is harmful if caused by a contracting money supply.  But when prices fall because competition drives firms to operate more efficiently and pass along these efficiencies to consumers in the form of lower prices, economies grow.  Resources once needed to feed and clothe people become available to produce other goods and services.  Consumers once unable to afford other goods and services can now do so.  And so it goes, and grows, as competition incessantly prods producers to “pander” (as Mr. Buerk sneeringly refers to this engine of economic growth) to consumers.

Does Mr. Buerk believe that Japan’s economy will recover faster and thrive better if producers stop such “pandering”?  Do competition-sparked efficiencies really cause a “downward spiral” from which the Japanese should seek to escape?

Defining reality

The "Fair" Trade Delusion

by Richard Epstein

In the sprawling field of international relations, few debates are as persistent and acrimonious as the one between the advocates of "free trade" and "fair trade." The fair trade position takes the view that a wide range of tariffs, duties, and other conditions may be used to restrict the flow of goods and services across national or state boundaries. The free trade position, which I heartily endorse, holds that national trade policy should allow goods and services to move fluidly across national borders—just as if those borders did not exist. One way to achieve this end is to sign bilateral free trade accords with other nations, with an eye to reducing tariff barriers and other impediments to the free flow of goods and services.

Illustration by Barbara Kelley

Right now, the United States has three pending free trade agreements with South Korea, Colombia, and Panama. Signing them just as they are will expand growth and lead to more opportunities for all parties. Although the economics of free trade are straightforward, its politics are not.

Last week, that sometime friend of free trade, President Barack Obama, announced that he would not submit any of these three free trade agreements to Congress unless and until Congress decided to reauthorize and extend the Trade Adjustment Assistance ("TAA") program that offers a rich package of financial benefits to various workers whose jobs are lost as a result of imported goods and services.

The president’s political logic is depressingly clear. He is willing to hold hostage the large overall gains from free trade to his renewed demand for economic assistance to those individuals, often union members, who are dislocated by the onslaught of new goods and services into the United States. Those parties, like the Chamber of Commerce, which should know better, have supported the president with the pragmatic argument that it is better to yield on the TAA, and move forward on the mentioned free trade agreements, than to come away empty handed.

That pragmatic compromise will, however, strangle free trade. Once it is accepted that all free trade agreements can be tied to other demands, the sky is the limit. For instance, labor groups have long insisted on the fair trade provision that we can only have free trade agreements with those nations whose labor laws look remarkably like our own. Their intention is to use these conditions to hobble their foreign competitors by forcing the competitors to abandon their own low-cost practices, thereby depriving free trade of much of its punch. Environmental groups have also joined the fair trade fray by insisting that poorer countries must have public amenities that only rich countries can afford, so that they too become weakened competitors in the American market.

All of these clever maneuvers should be stoutly resisted as a matter of first principle. Quite simply, the label "fair trade" in the hands of its advocates is a snare and delusion. My objection to fair trade does not rest on the absurd proposition that "fairness" is irrelevant to market transactions. It is the broad definitions of both fair trade and "unfair competition" that turns them into the enemy of growth and competition properly understood.

Although the economics of free trade are straightforward, its politics are not.

What exactly is unfair competition? The differences between the narrow classical liberal definition and much broader progressive definition are too vivid to deny. To truly understand unfair competition, we should step back from international disputes over free trade and ask how the notion of unfair competition plays out in the context of domestic trade. Classical liberal theory does not dismiss "unfair competition" as an oxymoron. Quite the opposite, it develops a set of rules that isolate for attack cases where one competitor uses force and fraud to upset the balance in a competitive market.

Consider this example: well before the eighteenth century, a suit for unfair competition lay against one schoolmaster who fired shots across the path of students who were making their way to a rival school. As the students dispersed, the rival was allowed to sue his mischievous competitor even though he and his school were never in the line of fire. The point here is that no individual student could be expected to mount this costly effort against the aggressor—each student’s stake is too small. But the competitor who lost customers to force surely did care about the collapse of his business. Allowing such a suit advances social welfare by forcing people to compete solely on quality and price.

"War is the health of the State."

The Brilliance of Randolph Bourne

by Jeff Riggenbach 

Randolph Bourne was an American intellectual journalist who flourished for a few years in the second decade of the 20th century — in the Teens, the decade that ran from 1910 to 1920. Bourne wrote mostly for magazines during this period. His byline was particularly familiar to readers of The New Republic — until his radically antiwar views on the eve of the US government's intervention in World War I got him fired.

He moved over to The Seven Arts, a newly launched magazine with a smaller circulation than The New Republic and one less well suited to Bourne's particular talents and interests, since its primary focus was the arts, rather than social and political issues. He was able to publish only six antiwar articles in The Seven Arts before its doors were closed by an owner fearful of the Wilson administration and its  Sedition Act of 1918, which made it a crime to criticize the Constitution, the government, the military, or the flag.

Only a few months after The Seven Arts ceased publication, Randolph Bourne died, a victim of the flu epidemic that killed more than 25 million people in 1918 and 1919, nearly a million of them in the United States. That was 1 percent of the population 90 years ago. One percent of the present US population would be more than 3 million Americans. Imagine what it would be like to live through a flu epidemic that killed more than 3 million people in the space of little more than a year. That's what it was like for Americans living 90 years ago, at the end of World War I.

Most of the people that flu virus killed have long been forgotten — except, of course, by members of their own families. But Randolph Bourne has not been forgotten, not completely. People are still reading his work. They're still talking about his ideas and about his memorable phrases. The most famous of these has gradually become so widely quoted in our culture that millions of people have heard it, even heard it repeatedly, without ever learning who originally wrote or said it: "War is the health of the State."

Randolph Silliman Bourne first emerged into the light of day on May 30, 1886 in Bloomfield, New Jersey, a small town fewer than 20 miles from Manhattan. His family was comfortably middle-class, and he was the grandson of a respected Congregational minister. But he seems to have been born unlucky all the same. First, his head and face were deformed at birth in a bungled forceps delivery. Then, at the age of four, after a battle with spinal tuberculosis, he became a hunchback. Then, when he was seven, his parents lost everything in the Panic of 1893, and he and his mother were abandoned by his father and left to live in genteel poverty on the charity of his mother's prosperous (if somewhat tightfisted) brother. Meanwhile, his growth had been permanently stunted by the spinal tuberculosis of a few years before, so that by the time he graduated from high school at the age of 17, in 1903, he had attained his full adult height of five feet.

Bourne was an exemplary student. His academic record in high school earned him a place in the class of 1907 at Princeton, but by the time he was supposed to appear on campus to register for classes in the fall of 1903, it was evident that he couldn't afford to attend. He could barely afford books. He was flat broke. And his mother needed his financial help if she was going to go on living the decent, middle-class lifestyle to which she had become accustomed. So Bourne postponed college and went to work. He knew his way around a piano, so for the next six years he worked as a piano teacher, a piano tuner, and a piano player (accompanying singers in a recording studio in Carnegie Hall). He also cut piano rolls. On the side he freelanced for book publishers as a proofreader. Now and then, when musical work was harder to find, he did secretarial work.

By 1909, when he was 23 years old, Bourne had saved enough to cut back on his working hours and try to catch up on the college experience he'd been putting off. He enrolled at Columbia, where he fell under the sway of historian and political scientist Charles Beard and philosopher John Dewey, and began publishing essays in the Dial, the Atlantic Monthly, and other magazines. His first book,Youth and Life, a collection of his magazine essays, was published the year he graduated from Columbia, 1913. And that fall, the now 27-year-old Bourne set out for Europe. In his senior year he had been awarded the Gilder Fellowship for travel abroad, which the historian Louis Filler has called "Columbia's most distinguished honor" during that period. Bourne spent a year travelling around Europe and pursuing such independent study as interested him.