Archive for the ‘Free Market’ Category


“Lighter colors represent areas where children from low-income families are more likely to move up in the income distribution.” — Raj Chetty, et al.

A new study from researchers at Harvard and Berkeley (i.e.,, one in which researchers hoped to confirm faith in big government policies) has revealed that the Great Plains states are the ones that, far and away, provide the greatest economic opportunities for the poor. As clear from the figure above, all the lightest colors where the poor have the greatest income mobility run down the center of the nation, where state taxes, regulations, and government spending are low.  A more helpful, interactive figure appeared in a New York Times article on the subject, which shows the percentage “chance a child raised in the bottom fifth rose to the top fifth” for every county (or commuting area) in the U.S.  North Dakota, which is ranked the most economically free state in the nation, clearly dominates in this category — with not a single county under 10%, and many of them varying from 20% to 33%.  Other surrounding states — Montana, South Dakota, Wyoming, Kansas, Nebraska, Texas — also abound with these regions of high-opportunity for the poor.  In comparison, the highest percentage in all of New England is 10.1 — which is essentially the lowest in North Dakota. Unfortunately, the New York Times reporter, Daved Leonhardts, almost seems like he wants to obscure this most conspicuous of facts about the data-map. Indeed, he only provides one general description of the data — and does so in a paragraph that, given the map above, needs to be read four times:

“Climbing the income ladder occurs less often in the Southeast and industrial Midwest, the data shows, with the odds notably low in Atlanta, Charlotte, Memphis, Raleigh, Indianapolis, Cincinnati and Columbus. By contrast, some of the highest rates occur in the Northeast, Great Plains and West, including in New York, Boston, Salt Lake City, Pittsburgh, Seattle and large swaths of California and Minnesota.”

 Notice all the places the reporter refers to that have low income mobility are red-state regions (and the purple state of Ohio) — yet, while he does make a brief reference to “Great Plains” when referring  to “the highest rates,” he then drowns it in a sea of blue (“NY, Boston… Seattle, large swaths of California and Minnesota”). But this does great violence to the data map he uses to front his own article.  How can the reporter start with New York (9.7%) and Boston (9.8%) as an example of the “highest rates” in the country when every county in North Dakota, Montana, and Wyoming has higher — typically much higher?  Indeed, many of the regions in the prairie states have twice to more than thrice the rates of New York and Boston, which when looked at nationally seem to have below average mobility rates.

Leonhardt also wrote, “Yet the parts of this country with the highest mobility rates — like Pittsburgh [10.3%], Seattle [10.4%]  and Salt Lake City [11.5%] — have rates roughly as high as those in Denmark and Norway, two countries at the top of the international mobility rankings.”  Well, if those rates are comparable to the rates of Denmark and Norway, then the regions of the Great Plains — and particularly Montana, North Dakota, South Dakota, Nebraska, Kansas, and West Texas must lead the world.  Hong Kong has probably done better, but then again Hong Kong has even lower taxes and fewer regulations than North Dakota.

Finally, the map also confirms that income mobility for the poor is not a federal issue — and does not need a federal response.  Rather those regions with low or moderate income mobility for the poor — especially the deep south but also including the rust belt, the west and the northeast — should start trying to imitate the economic policies of the big sky states.

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Slowly roasting in Dante’s lowest circle of Hell, next to the murderers and thieves, are GOP insiders who preach small government when voting against Food Stamps but then support farm Subsidies for Big Ag.

In what may be the most egregious political act in many years, Republicans have just recently carved out food stamps from the Giant AgriBusiness Welfare  Farm Bill, then passed it — based, one supposes, on the theory that taxpayer handouts should be directed toward corporations not the poor. In fact, they *increased* the handouts! Some defenders may think the Farm subsidies go to Auntie Em in “The Wizard of Oz.” They actually go to Archer Daniels Midland and make it impossible for Auntie Em and other small farm owners to compete. Only 12 Republicans had the courage to vote against this, and then they wonder why they are polling worse than Aaron Hernandez. Daniel Mitchel wrote a powerful blog post on the political maneuver, and he in turn quotes an important passage by Ross Douthat in New York Times piece:

“It should go without saying that America’s agriculture policy has always been a terrible, stupid, counterproductive exercise in self-dealing cronyism. But when House Republicans severed the traditional connection, arbitrary but politically effective, between farm subsidies and food stamps, it briefly seemed like they were looking for an opportunity to put libertarian populist principle into practice, by separating both outlays in order to trim or reform both separately. But no — instead they were just making it easier for the party’s congressmen to vote for a bloated, awful big government program that benefits mostly-Republican states and interest groups, knowing that they weren’t also voting for something that pays out to the (mostly-Democratic) poor as well. This is egregious whatever you think of the food stamp program… Practically any conception of the common good, libertarian or communitarian or anywhere in between, would produce better policy than a factionally-driven approach of further subsidizing the rich.”

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2012 election results from Gelman and Feller, NYT. As clear in the above figure, Obama dominated among low-income households even in red states. Meanwhile, Romney held an advantage among high income households even in many states that went blue.


The Democratic View of typical Republicans

The one post on Liberty Haven that has elicited the most aggravated commentary is “The True Irony Behind Leftist Complaints Over ‘Red State Socialism.'”  It would seem that many leftists have a very peculiar view of the red-state /blue state divide in this country.  Apparently, they conceive of “liberals” as consisting mostly of urbane, well-meaning, educated, coffee-house Manhattanites, San Franciscans, and Portlanders — while conservatives, they think, mostly live in trailer parks in Kansas and Oklahoma, eating mayonnaise sandwiches as their kids do wheelies on min-bikes in between rusted appliances on the dirt patches they call front lawns.  These people only vote Republican, so the story goes, because roughly half-a-dozen evil-genius billionaires, who have oppressed, polluted, and slave-laboured their way to great power, have managed to take control of Talk-Radio and Fox-News — and, by using barely-veiled appeals to all the darker sides of human nature, have inflamed the rubes against the altruistic, governing geniuses of the Democratic party, enticing their minions to hold giant, smelly rallies in which they proudly wave misspelled signs and hang teabags on their hats.  All this, of course, is only partly true.


More realistic view of typical Republicans

The image of election results above and the New York Times article that it accompanied give the real story of this last election (indeed, the last six elections) — and falsifies once and forever more any concerns about low-income rubes and “red state socialism.”  The simple fact of the matter is that Romney dominated among voters making $50,000 or more. Specifically,  he won voters with family income from $50,000 to $99,999 by 52% to 46%, and voters with family incomes from $100,000 to $199,999 — and those making $200,000 or more — both by the same margin: 54% to 44%.   Interestingly, Romney even won this demographic even in some states that are considered leftist strong-holds.  Romney won the $50,000 to $100,000 in Oregon, Wisconsin and Minnesota — and really cleaned up among the $100,000 to $200,000 income group all across the nation, even winning it in Illinois, while running close to even in MA, CA, and NY.  Obama, like Clinton, won because of an incredibly lopsided victory among low income groups. This puts to rest any notion about the supposed ‘hypocrisy’ of ‘red-state socialism.’  Yes, Illinois gives more money to Washington D.C. than it takes in.  But that quite obviously doesn’t mean that Illinois Democrats are giving more money than they take in.  The majority of the revenue that the Feds take from Illinois obviously comes from its higher incomes, which is the group that voted for Romney. And yes, it is also true that the Feds spend more money in Missouri than they take in — but that obviously doesn’t mean that Missouri Republicans are net takers from the government.

The fact remains that it is neither hypocritical nor dumb to complain about the unsustainable size of our tax-and-spend government no matter what state you live in.

(And once again, I must stress that the lefty-elitism that continuously slanders the red-state rural mindset is indeed ironic — as the rural red states are the cradle of American progressive ideology. The U.S. has now become a William-Jennings-Bryan nation.)

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The European experiment is over and the results are in. This has left those who favor big government solutions with few talking points.

I’m having a debate with a big-government-fan on Facebook, and here was the last exchange:

Statist: “[If] Higher taxes mean bigger financial problems, [what about] all the nations of Europe?”

Response:  Probably the most conspicuous historical fact of the last 100 years is that higher taxes and less economic freedom have now led to the fall or economic decline of much of Europe – and the entire continent has been surpassed by all previously-poorer, subjugated regions that practiced economic freedom.

First of all, the big government experiment with socialism in Eastern Europe completely failed – and now semi-socialism is causing tremendous suffering in southern Europe as well. Thus, Europe, which had a 1000 year head start, ruled the world, and comprised the wealthiest group of countries on the planet from 1000 AD to the 20th century, has now been overtaken and outperformed by former European colonies that were more economically free: Hong Kong, Singapore, U.S., Canada, New Zealand, and Australia. This is the most obvious economic fact of the last century. Nothing has been more noticeable than the collapse of Eastern Europe due to socialism – and the decline of Western Europe due to semi-socialism. Today, this pattern is now highlighted by the high correlation between prosperity and the  economic freedom index.

Statist: “where there is no relationship between level of taxation and economic performance”

Response: Nope, there is a rather obvious, smash-you-across-the-face correlation between low taxes, economic freedom and economic success even within Europe today – as Switzerland, Denmark, Luxembourg are ranked among the highest in both freedom and prosperity. Meanwhile, those nations among the least free –Greece, Italy, and Portugal — are crashing. But the correlation becomes even more palpable when you look at even freer regions like Hong Kong and Singapore that have gone from nearly third world nations in the 1940’s to economic powerhouses of today.

Statist (sarcastically): “It is obviously much better to live in low tax, economically ‘free’ places like Singapore and Hong Kong than less ‘free’ places like Sweden, Canada, Denmark and Japan.”

Response: You forgot very free regions like Switzerland and Luxembourg. But to be clear, Sweden, Denmark, and Canada have all instituted so many free market reforms that they have taken off again (particularly since the 90’s). Indeed, Canada is now more economically free than the U.S., and Denmark is tied with it. No nation you mentioned is ranked below 22nd world wide on the economic freedom index. You also ignored Switzerland and Luxembourg, which are much freer than, say, Sweden and Japan – and much higher performing. You also forgot to mention Greece, Italy, Portugal, etc., or any Eastern European nation – but of course we know why that is.

Statist: “And quality of life of course can always be measured by GDP per capita.”

Response: Well, it’s a great indicator, but other issues are important too.  And as the Economic Freedom Index proves, the small government nations lead in those issues as well (e.g., health, low crime, standard of living for the poor, etc.)

Statist: But remember, I am just explaining things away.

Response: Yes, right now you are trying to explain away the most conspicuous economic fact of the last century: How big government schemes have destroyed all of Eastern Europe, are taking down much of southern Europe right now, and have caused significant decline in the former wealthiest nations in the planet (e.g., France and Germany), which have been overtaken by Hong Kong, Singapore, etc.

Statist: “And maybe people might care about things other than ‘total GDP’ or ‘GDP per capita’ exclusively.”

Response: Again, nations with highest economic freedom and GDP per capita also lead the world in other quality-of-life issues: (e.g., low crime, health, standard of living for the poor, etc.)

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My daughter Nicole, who has spent ten months of the last three years helping orphans in Uganda, has benefited from being raised with an understanding of the free market. Nicole spends much of her time in Africa trying to teach skills needed to develop micro-businesses, which will help the poor create trade-able wealth all throughout their lives.

First, let us all agree that the most important measure of a society is how it treats its less fortunate citizens. We should all feel a moral responsibility to relieve suffering when we can, to work to ensure that all people receive food and medical care and shelter, regardless of their ability to pay.  Unfortunately, many kind and well meaning people who agree with these principles have remained somewhat skeptical of free markets in achieving this humanitarian goal.  And prior to my encountering of free market theory (and especially Austrian economics), I did too.

The common perception about the free market is that it is a callous, cannibalistic, dog-eat-dog system which favors greedy go-getters and leaves the poor and unfortunate fending for themselves, picking up scraps left over from a rigged system.

Gordon Gecko represents the typical “capitalist” in American media portrayals — a greedy, unscrupulous profiteer who never generates any wealth himself but simply defrauds, cheats, downsizes, and employs various abstruse, job-detroying financial gimmicks to expand his considerable fortune. The difference between the way the free market (and socialism) works in reality and how such schemes are presented in fiction is quite wide indeed.

I used to have a similar impression about the dangers of unrestrained market forces and certainly could not think of an intelligible reason why central planning couldn’t work. Certainly, it would seem, there was no physical principle preventing governments from effectively distributing goods and services to the poor or preventing them from effectively regulating commerce so that distribution would be more plentiful, fair and kindly. What is more, the idea of central planning and mixed economies has the support of the majority of most intelligent and well-educated people — while, by and large, it seemed that those who opposed such systems were in the pockets of Big Business and always trying to implement a callous political philosophy that appeals to all the darker sides of human nature — greed, racism, selfishness, xenophobia, paranoia, etc.  At least that is how they are portrayed publicly.

Judas, Mr. Potter, Gordon Gecko,and Scrooge-the-night-before are all capitalists.  Jesus, George Bailey, Carl Fox, and Scrooge-the-next-morning are all socialists, right?  Finally, many believe that history proves the effectiveness of big government plans. We had tried the abominable and vicious practices of the free market — like in the nineteenth century US with the Robber Barons and the greedy capitalists Jay Gould and James Fisk. That’s what you get from the “free market,” many believe. You get Dickensian London or Sinclair’s The Jungle or Stone’s Wall Street.

Still, even before I had been persuaded by Austrian economics, I always sensed a few problems with government control — problems I didn’t think about too carefully, but I couldn’t quite explain. And they pestered me. There were some rather obvious examples of a number of governments trying to control domestic trade and deliver services to the masses — China, Cuba, Russia, etc — and failing miserably. But certainly that must have been because they were corrupt and weren’t really the friends of the poor, right? They were greedy totalitarians. They could have effectively regulated commerce and redistributed goods to the poor if they had really wanted to, but they just were selfish and lacked compassion. But as one’s knowledge of 20the century history continues to expand, you begin to see failure after failure, decade after decade, no matter what the leadership: Albania, Algeria, Angola, Armenia, Azerbaijan, Benin, Bulgaria, Belorussia, China, Chile, Congo, Cuba, Czechoslovakia, East Germany, Estonia, Ethiopia, Georgia, Hungary, Kampuchea, Kazakhstan, Kyrgyzstan, Latvia, Lithuania, Moldova, Mongolia, Mozambique, Nicaragua, North Korea, Poland, Russia, Romania, Senegal, Somalia, Tuva, Tajikistan, Turkmenistan, Ukraine, Uzbekistan, Venezuela, Vietnam, Yemen, Yugoslavia. All were economic disasters. All hurt the poor. Were all the leaders of all these nations always evil and unconcerned about the have-nots? Or was there something else at work?  What is more, the big government programs of all the western nations have now started to fail.  In the United States, social security, Medicare, and Medicaid are all broke and have unfunded liabilities that are threatening to overwhelm all federal spending.  The health care scheme of Canada has led to such torturous wait lines that the nation has now abandoned its hallmark system and is allowing private care.   And the recent debt-crises that have befallen countries like Greece, Portugal, Italy, Spain, France, and Great Britain have exposed the vulnerability of “European style socialism.”  And the only question is, why?

What I eventually discovered through some research on the issue was the extraordinary, indeed near-miraculous advantages that the free market bestows upon its citizens. Indeed, I eventually realized that, due to a number of sophisticated reasons, it is the free market and only the free market that can provide plenty and effectively distribute goods to the masses — and, in fact, it has been successful in every case.  And all efforts to regulate and, in essence, govern the market are doomed to failure, always leading to ineffective distributions, shortages, and eventually, unnecessary suffering of the most needy.  The following are the five main reasons as to why big government schemes always fail, regardless of whether the government is trying to distribute goods itself or just use laws and regulations to “help” the market set prices and distribute items more effectively:

1) The Simple Arithmetic of Shortages:  Lack of profit for producers plus artificially inflated demand necessarily leads to scarcity and want.

The empty shelves in Soviet Union stores, the torturous wait lines for surgeries in Canada, the lack of available dentists in Great Britain are all due to the same reason:  The profits of producers are not linked to their ability to satisfy the demand of the people, and their demand has been unnaturally pumped up because the goods are “free” (i.e., paid for with taxes.)  For example, Canadian doctors make about half as much as American doctors, thus many college students in Canada decide it’s not worth years and years of study for a profession that’s overburdened and underpaid. And even when they do get trained in Canada, 1 out of 9 physicians then emigrate to the U.S. Making matters worse, since no one pays for their own health care, there is an extraordinary increase in unnecessary surgeries and doctor visits. All this has led to a self-inflicted humanitarian crisis.  The same is true for dentistry in Great Britain, in which only 49% of adults are registered with public dentists, leading many people to try DIY dentistry using pliers and alcohol.    In other words, the extraordinary demand for dentists in Great Britain has not resulted in a corresponding rise in prices and profits for dentists, which in a free market, would have strongly encouraged more people to enter the industry.  Alas, dentistry is a “right” in Great Britain, so dentists are abandoning the industry and the citizens continue to suffer.

2) The Miracle of the Pricing Mechanism (or “No one knows how to make a pencil“) Government planners lack the near miraculous, humanitarian, impossible-to-duplicate omniscience of the pricing mechanism, which instantly communicates information that is crucial to preventing shortages and gluts — and foments widespread cooperation among many different peoples to always ensure that the precise and ever changing demands of the masses are met, everywhere and at all times.  In free market systems, when demand starts out-pacing supply in a particular region — when a lot of people want something — prices (and profits) rise and this not only sends an important signal to consumers, helping curb demand, it also sends a much more important signal to potential producers.  Vigilant entrepreneurs, observing the high prices and profits, then enter the industry to help create that item.  Supply increases, prices drop, shortages are avoided, and resources have been effectively reallocated. The exact opposite occurs when supplies start exceeding demand. When prices drop, business people stop producing things that aren’t much in demand (e.g., buggy whips and ice boxes), helping reduce gluts. They then reinvest their time and resources into what people need more (e.g., cars and computers).   And it is simply impossible to out-think this process.  Indeed, when a small number of government planners, working without any rational price mechanism, try to anticipate the true needs of millions of people — all living in a wide variety of cultures, climates and ever-shifting circumstances — and then try to manage prices or coordinate production or distribution according to those inordinately variegated and always-changing desires, they simply have no chance of success. And certainly they couldn’t be efficient.  And this is particularly true when you consider how much production needs to be coordinated for the efficient production of even the simplest objects.

Friedman gives an idea of the impossibility of central planners effectively governing production and prices in the famous economic lesson first given by Leonard Read: “No one knows how to make a pencil“.  In brief, just imagine trying to coordinate all the processes required just to create pencils for a nation — the lumber industry for wood, the steel production for chain saws for the lumberjacks, the iron ore for the steel, the making of the yellow paint, the mining of compressed graphite, the making of the glue and the brass ferrule, the planting of rubber trees.  No one could actually plan the right amount of production for all the elements that comprise even the simplest items — let alone effectively distribute these elements and then the finished product.  In contrast, the pricing mechanism coordinates all such processes without a central planner, helping guide all of the potential labor and resources of a nation into vocations that most effectively produce everything desired in a particular place at a particular time. And as the needs of the people vary from region to region and change over time, this immediately results, through the pricing mechanism, in a corresponding change in production and distribution. As the great economist, F.A. Hayek wrote: “The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.”

3) Government monopolies vs. free competition

When a government controls an industry, it has a complete monopoly on that industry and collects its revenues through taxation (i.e., at gun point).  If the people don’t like the service or goods offered, they cannot take their business elsewhere or even withhold payment.  This is why in America, service at, say, the DMV is so dreadful.  They don’t have to be efficient because you can’t take your business elsewhere.  With free market systems, companies that are inefficient or produce low quality goods always fail, and their labor and resources are absorbed by more successful producers.  Failing government programs just consume more and more wealth and have no incentives to improve.

4)Top Down vs. Bottom Up: The free market urges people to work to satisfy the wants and needs of the masses: Free market systems entice the citizenry to anticipate the desires of the people around them and to meet those needs in the most efficient manner possible.  This is the only way to profit in purely free market systems.  Big government schemes necessarily suppress this urge or typically preempt it altogether.  For example, the history of the United States brims with famous inventors and revolutionary entrepreneurs for essentially every product or service — cars, telephones, cameras, computers, airplanes, etc. — except for K-12 education.  We have no Henry Ford of elementary schools, no Steve Jobs of high schools.  And the only reason for this is that the government monopolizes the industry and has taken all potential profit from it.  The only new educational ideas that can possibly be tried must come from a small group of officials in charge, and no one can strike out on his or her own and offer an innovative kind of low-cost grammar school.  In other words, the driving forces of government systems are the orders of a small group of people in charge.  The driving forces of the free market are the needs and desires of the people, enticing every potential pioneer to work for the benefit of his or her fellow citizen.

It is often said that the market system is a cruel Darwinian process, where only the fittest can survive. And to a certain extent that is true.  But the actual battlers are the businesses and corporations  — while the people get to access the rewards. It is the weakest corporations that perish, while only the fittest businesses triumph — and victory can only be achieved by meeting the needs of the masses in the most efficient manner possible. Thus, corporations and businesses compete against each other to bring food, clothing, shelter, electric appliances, etc., so that we never find ourselves in want.

5) Corruption and Favoritism.  Who gets the Penthouses and Caviar?

Despite the hopeless dreams of some, it is simply impossible to equalize completely the quality of goods and services.  Some food is more desirable than other food.  Some homes are more luxurious than other homes.  Some computers, cars, sunglasses, clothes, telephones, microwaves, refrigerators, etc., will simply be better than others.  So the question is: Who gets the good stuff?  Who gets the penthouse and the caviar?  In capitalist nations, the privileged are people like Bill Gates, Steve Jobs, Henry Ford, who can only get wealthy through voluntary trade, forcing them to create the very wealth that they earn, mass producing some particular wanted good and distributing it to the masses of the nation.  Before Gates, Jobs, Ford, etc., got rich themselves, they had to increase the material wealth of the U.S. in computers, software, smart-phones, cars, etc.  With socialism, corporatism, or crony capitalism, powerful central governments start choosing the winners and losers.  The friends of Castro get the good hospital; SEIU gets the exemption; Goldman Sachs, GM and the UAW get the bailout.  Indeed, there is no big government system, anywhere, that has escaped the corrupting influences of such a centralized accumulation of power and wealth.

Coda: Most people today who have become free marketers have followed a similar journey, only coming to their view after having first followed some other political philosophy. Indeed, I know of no one over the age of 30 who was actually raised a libertarian/free-marketer — I mean an actual market-forces, price-mechanism, Hayek-understanding libertarian — or who was even taught it as a young person in schools. So most current libertarians, like myself, must come to their views through a self-educating trek –typically occurring in their late twenties or thirties.  They must actually be exposed to and persuaded by the ideas of Friedman, von Mises, Hayek — and then they must make the lonely decision of abandoning their old sociopolitical ideas, which is to say, the ideas of their parents, peers, professors, and political icons.  This is true of even all the famous libertarians: Friedman had been a FDR/New-Deal supporter; Stossel a radically pro-regulation, consumer-advocate; Hayek a socialist.  Naturally, conversion doesn’t necessarily entail veracity, but it does mean that many people have come to accept the power of the free market through intellectual persuasion rather than emotional indoctrination.

After learning about the humanitarian nature of the free market, I finally understood why socialism has collapsed everywhere it has been tried and why the free market has always flourished. I finally understood the problems behind European-style socialism, for the wait lines in Canada, for similar problems in Great Britain, for the recent economic crises facing Greece, Portugal, Italy and Spain, for the incredible collapse of France. I also understood why, as other nations started to founder, other regions like Hong Kong and Singapore have soared. It was also nice to watch as the economic system of Hong Kong ended up fomenting free market changes in China, helping end their persistent problems with poverty and hunger. As Paul Romer correctly said on “TED,” “In a sense Britain inadvertently, through its actions [implementing the free market model] in Hong Kong has done more to reduce poverty in the world than all the aid programs we have undertaken in the last century.” It is the free market that ends poverty and produces plenty. The free market is what has reduced the suffering of the poor on this planet. So as you start to analyze this socio-political philosophical fortress built up by Smith, Mises, Hayek, Friedman; as you start to understand Say’s Law and the humanitarian consequences of the pricing mechanism; as you consider all the colossal and horrific failures of socialism and discover why they occur; as you learn about the disastrous misallocation of resources caused by the artificial inflation of demand; as you realize the impossibility of central planners adequately managing prices or matching supplies with the varied needs of a nation; as you reflect upon the inescapable sociobiological impulses that fuel free markets and realize that the poor today are fed, clothed, housed, heated exclusively by the consequences of inventions, mass production and distribution schemes developed within market systems; as you discover that government planners have, at best, only offered the poor a number of half-delivered and ultimately hurtful promises– as you find with Canadian healthcare or the government housing and schools of Detroit — or, at worst, has provided the poor with a lot of shallow graves, as you find strewn across Eastern Europe and East Asia; you begin to realize that the current fashionable view of steering economies to help the poor is completely misguided and will only increase suffering. The only way to achieve abundance and distribute goods effectively is to allow the free market, this extraordinary prosperity-machine, to operate with as few hindrances as possible. Then, and only then, are you best able to help the poor with a luxurious and silken safety net woven from the extraordinary plenty that only free societies can produce.

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Raising the debt ceiling, merely allows us to borrow more money and go deeper into debt.  Austan Goolsbee, here, admits if we could not continue to borrow more money, then we face the complete financial ruin of the U.S.  On other talk shows, various commentators who supported raising the ceiling noted that  various federal programs like social security and medicare payments would have to be cut, hurting many people in need.  There are two important points to be noted: 1) These comments are a Greece-like, California-ish, Cuban-style, 1989-type admission that our federal economic polices have been utterly disastrous — an admission that we are now so frighteningly vulnerable that if we could not continue to borrow money, the whole thing would collapse.  2)  As Austrian economists predicted, the allegedly sweet big-government intentions of confiscating retirement money “for the people’s own good” has now actually made them more vulnerable, not less.  (more…)

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Manhattan had already risen to become a financial and cultural city of the world by 1900 — long before the income tax or the popularity of economically progressive ideas among its citizens

Many progressives look at the magnificent splendor of the cities they inhabit — and associate these sparkling urban triumphs with their leftist political views.  After all, the wealthiest and most sophisticated places to live — places like Manhattan, Chicago, San Francisco, and Boston — are well known for their liberal politics, and so the left sees the grandeur of these metropolises as proof of the efficacy of their beliefs.  But in reality, these cities are all extraordinary free market success stories, and they had become major financial, cultural, and educational centers in the U.S. in the nineteenth century, long before economic progressivism had become a popular philosophy among urbanites.  These major cities all rose to global prominence in an atmosphere of nearly unfettered capitalism — at a time with no income tax and few regulations. (more…)

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