Archive for the ‘economics’ Tag

Fascism & Communism   Leave a comment

Before the question, how about a few statistics? The 20th century was mankind’s most brutal century. Roughly 16 million people lost their lives during World War I; about 60 million died during World War II. Wars during the 20th century cost an estimated 71 million to 116 million lives (http://tinyurl.com/ya62mrqa).

Found on Lew Rockwell

The number of war dead pales in comparison with the number of people who lost their lives at the hands of their own governments. The late professor Rudolph J. Rummel of the University of Hawaii documented this tragedy in his book “Death by Government: Genocide and Mass Murder Since 1900.” Some of the statistics found in the book have been updated at http://tinyurl.com/y96tqhrl.

The People’s Republic of China tops the list, with 76 million lives lost at the hands of the government from 1949 to 1987. The Soviet Union follows, with 62 million lives lost from 1917 to 1987. Adolf Hitler’s Nazi German government killed 21 million people between 1933 and 1945. Then there are lesser murdering regimes, such as Nationalist China, Japan, Turkey, Vietnam and Mexico. According to Rummel’s research, the 20th century saw 262 million people’s lives lost at the hands of their own governments (http://tinyurl.com/lu8z8ab).

Hitler’s atrocities are widely recognized, publicized and condemned. World War II’s conquering nations’ condemnation included denazification and bringing Holocaust perpetrators to trial and punishing them through lengthy sentences and execution. Similar measures were taken to punish Japan’s murderers.

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But what about the greatest murderers in mankind’s history — the Soviet Union’s Josef Stalin and China’s Mao Zedong? Some leftists saw these communists as heroes. W.E.B. Du Bois, writing in the National Guardian in 1953, said, “Stalin was a great man; few other men of the 20th century approach his stature. … The highest proof of his greatness (was that) he knew the common man, felt his problems, followed his fate.” Walter Duranty called Stalin “the greatest living statesman” and “a quiet, unobtrusive man.” There was even leftist admiration for Hitler and fellow fascist Benito Mussolini. When Hitler came to power in January 1933, George Bernard Shaw described him as “a very remarkable man, a very able man.” President Franklin Roosevelt called the fascist Mussolini “admirable,” and he was “deeply impressed by what he (had) accomplished.”

In 1972, John Kenneth Galbraith visited Communist China and praised Mao and the Chinese economic system. Michel Oksenberg, President Jimmy Carter’s China expert, complained, “America (is) doomed to decay until radical, even revolutionary, change fundamentally alters the institutions and values.” He urged us to “borrow ideas and solutions” from China. Harvard University professor John K. Fairbank believed that America could learn much from the Cultural Revolution, saying, “Americans may find in China’s collective life today an ingredient of personal moral concern for one’s neighbor that has a lesson for us all.” By the way, an estimated 2 million people died during China’s Cultural Revolution. More recent praise for murdering tyrants came from Anita Dunn, President Barack Obama’s acting communications director in 2009, who said, “Two of my favorite political philosophers (are) Mao Zedong and Mother Teresa.”

Recall the campus demonstrations of the 1960s, in which campus radicals, often accompanied by their professors, marched around singing the praises of Mao and waving Mao’s Little Red Book. That may explain some of the campus mess today. Some of those campus radicals are now tenured professors and administrators at today’s universities and colleges and K-12 schoolteachers and principals indoctrinating our youth.

Now the question: Why are leftists soft on communism? The reason leftists give communists, the world’s most horrible murderers, a pass is that they sympathize with the chief goal of communism: restricting personal liberty. In the U.S., the call is for government control over our lives through regulations and taxation. Unfortunately, it matters little whether the Democrats or Republicans have the political power. The march toward greater government control is unabated. It just happens at a quicker pace with Democrats in charge.

 

Walter E. Williams is the John M. Olin distinguished professor of economics at George Mason University, and a nationally syndicated columnist. To find out more about Walter E. Williams and read features by other Creators Syndicate columnists and cartoonists, visit the Creators Syndicate web page.

Copyright © 2017 Creators.com

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Independence Hypocrisy   1 comment

 

https://www.lewrockwell.com/2017/12/walter-e-williams/independence-hypocrisy/

Image result for image of walter e williamsOfficials in Catalonia, Spain’s richest and most highly industrialized region, whose capital is Barcelona, recently held a referendum in which there was a 92 percent vote in favor of independence from Spain. The Spanish authorities opposed the referendum and claimed that independence is illegal. Catalans are not the only Europeans seeking independence. Some Bavarian people are demanding independence from Germany, while others demand greater autonomy. Germany’s Federal Constitutional Court ruled: “In the Federal Republic of Germany … states are not ‘masters of the constitution.’ … Therefore, there is no room under the constitution for individual states to attempt to secede. This violates the constitutional order.”

Germany has done in Bavaria what Spain and Italy, in its Veneto region, have done; it has upheld the integrity of state borders. There is an excellent article written by Joseph E. Fallon, a research associate at the UK Defence Forum, titled “The Catalan Referendum, regional pressures, the EU, and the ‘Ghosts’ of Eastern Europe” (http://tinyurl.com/y8dnj6s6). Fallon writes that by doing what it’s doing in Bavaria, “Berlin is violating international law on national self-determination. It denies to Bavaria what it granted to the 19 states that seceded from Yugoslavia and the Soviet Union. In fact, Germany rushed to be first to recognize the independence of Slovenia and Croatia.” It did that, according to Beverly Crawford, an expert on Europe at the University of California, Berkeley, “in open disregard of (a European Community) agreement to recognize the two states under EC conditionality requirements.”

The secessionist movements in Spain, Germany and Italy have encountered resistance and threats from the central governments, and in Catalonia’s case, secessionist leaders have been jailed. The central governments of Spain, Germany and Italy have resisted independence despite the fact that they are signatories to the International Covenant on Economic, Social and Cultural Rights, which holds that “all peoples have the right of self-determination. By virtue of that right they freely determine their political status and freely pursue their economic, social and cultural development.”

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Fallon notes the hypocrisy of Spain, Germany and Italy, as well as the entire European Union. Back in 1991, the EC — the precursor to the EU — “issued its conditions for recognizing the unilateral declarations of independence by states seceding from Yugoslavia and the Soviet Union.” Fallon argues that these same guidelines should be applied to the states of Catalonia, Bavaria and Veneto. Isn’t it double talk for members of the EU to condemn independence movements today, given that they welcomed and supported independence movements for states that were members of the communist bloc?

Catalonia, Bavaria and Veneto are relatively prosperous jurisdictions in their countries. They feel that what they get from the central governments is not worth the taxes they pay. Each wants the central government off its back. They think they could be far more prosperous on their own. That should sound familiar. Some of the motivation for secessionist movements in Europe is similar to the motivation found in the Confederacy’s independence movement of the early 1860s.

Throughout most of our nation’s history, the only sources of federal revenue were excise taxes and tariffs. In the 1830s, the North used its power in Congress to push through massive tariffs to fund the government. During the 1850s, tariffs amounted to 90 percent of federal revenue. The Southern states were primarily producers of agricultural products, which they exported to Europe. In return, they imported manufactured goods. These tariffs fell much harder upon the export-dependent South than they did upon the more insular North. In 1859, Southern ports paid 75 percent of federal tariff revenue. However, the majority of the tariff revenue generated was spent on projects that benefited the North.

Tariffs being a contributing cause of the Civil War is hardly ever mentioned. Using the abolition of slavery as an excuse for a war that took the lives of 620,000 Americans confers greater moral standing for the Union.

Taking the Long View   Leave a comment

So, I ran into my extremely liberal former coworker in the grocery store last night. She was all in a tizzy about corporate tax reform and how it was going to “harm” her financially. Wasn’t I worried about how much more I would pay? When I said my sister-in-law (a CPA with tax experience) had checked my math and assured me we would be saving money not losing it, Michelle asked if my husband’s business had finally taken off. No, Brad is still keeping it small and enjoying being able to take time off to go fishing and hiking when he wants. We’re not rich and current tax reform should save us at least $800 and maybe as much as $2000. And, no, Brad’s business is a sole-proprietorship, not a corporation.

Image result for image of tax cuts helping the economyMichelle is a social worker, not an economist, but that’s really no excuse for ignoring the inconvenient fact that voluntary economic arrangements benefit all participants … else individuals could refuse to participate. In the absence of fraud (government’s failure to protect citizens from criminals) or coercion (government’s invasion on citizens’ rights), self-interest will guarantee a benefit to all parties, regardless of what Congressional Democrats may say at the moment.

The progressive strategy going forward will be to ignore many clear mechanisms by which the rest of us gain from improved incentives for capitalists to use their resources for others.

Corporate tax reform improves after-tax rewards for capital investments, providing tools for increased worker productivity and earnings. It further stimulates innovation, advancing techniques and improving technology, risk-taking, and entrepreneurship. This doesn’t just help company owners, but benefits workers and consumers.

Of course, there is a commonsense caveat here. It takes time for owners of capital to fully respond to improved incentives, meaning the positive effects on workers’ circumstances will appear only with time. The whole strategy of tax-reform opponents will be to focus people’s attention on the short run, before the positive labor effects appear in the data. The hope is that voters will overlook these benefits, which may not be fully realized, in fall of 2018 when they go to the polls to elect Representatives and Senators.

It might be a useful strategy because the benefits to capitalists appear immediately in the data. By comparing the limited benefits to workers in the present to both the present and future benefits to capitalists, opponents of corporate tax rate reductions can cast tax reforms as essentially just “tax cuts for the rich,” even if the vast majority of benefits actually accrue to workers over time.

This is how it works. When the tax burden on a class of assets, say corporate stock, is reduced, it will lead to an immediate increase in those assets’ prices. The asset price increase will not only reflect current gains to their owners, but also capitalize the expected increased after-tax profits that can be expected in the foreseeable future. The more durable the improvements are likely to be, due to future effects, the greater the asset price surge will be.

Additionally, most financial resources are owned by people who have greater wealth and income. Often these are older middle-class households who have had more time to convert unmeasured earning capacity into measured financial wealth, but that still leaves their middle-aged offspring not quite certain they’re seeing a benefit in the first year of tax reform. So, by focusing only on the short run (fall 2018), the results can be made to appear as huge asset gains for “the rich,” with almost no effect on American workers’ financial well-being. That lag lets tax-reform opponents assert that their claim has been “proven”. Of course, the main benefit of these short-term results accrues to older households that have had more time to convert unmeasured earning capacity into measured financial wealth.

Unfortunately for opponents’ supposed “proof”, the improved incentives of higher after-tax returns are the mechanism which produces increased worker productivity and real earnings over time. Those cumulative effects are very large, even when their immediate effect is small. But unlike financial market assets, there is no marketplace in which the higher real earnings of workers in the future (economists call that “human capital”) get capitalized into an easily-observed wage and/or benefit increase.

January’s investor- and owner- class begin to benefit workers later in the year or in January of 2019, but by emphasizing the short-run, the opponents basically just ignore that economic fact.

Michelle insisted that they should have implemented the tax reform starting in 2019 to allow people to adjust. I was stunned at first that anyone would want to delay getting to keep more of their money, but then I remembered, there’s an election in November 2018. She was probably just parroting some talking points she’d heard and taken as gospel. By implementing tax reform staring in January, the GOP gives some hope for businesses to see the benefits of tax relief immediately and to begin to pass those benefits onto their workers and consumers by late summer. As proponents of “taxing the rich” see their prospects for a political win evaporate, they will focus attention on the short-run. “Your wages haven’t gone up spectacularly yet, have they?” Banging that drum throughout the year will make excellent electoral ammunition … unless workers see an increase in their paychecks in late summer.

By the way, we’ve been here before with the Reagan tax reform. There are still people (Michelle is one of them) who will insist that the Reagan reforms had no positive effect for ordinary people. It was just “a tax cut for the wealthy.” Unless you were a worker who say a benefit before the next election, you probably thought your own experience was “proof” that Reagan’s tax reform didn’t work. A short term focus is a massive misrepresentation which diverts attention from the fact that improved incentives reveal themselves in the economy and for workers and consumers over time. If we take a longer-term view of economics, we aren’t fooled by the sleight-of-hand, but most progressive have difficulty with the concept that it can take six to 18 months for a tax cut to be reflected in the growth of real wages. I think that’s the effect generated by a bailout mentality.

Now, here’s the thing – ultimately, tax reform is only part of the picture for a healthy economy. The US economy is burdened by many things in addition to a high corporate tax rate. Unacceptably high levels of debt, private and governmental, also drag on the economy. The evisceration of the manufacturing sector doesn’t help. President Trump is making great progress on the rollback of regulations that was encouraging manufacturers to move overseas and a better tax rate might also help to protect and improve manufacturing in the US, but tax reform alone is not a magic pill. It’s just part of a compound strategy that is essential if any other parts of the strategy are going to work. At some point, government is going to have to cut spending in order to eliminate deficits and address the debt, but that only works if the economy is growing.

Unfortunately, politicians tend to see things in 2-6-year cycles, so don’t often take a long-view approach to the economy. Which begs the question –

Why do we think they should be in charge of the economy?

Posted December 21, 2017 by aurorawatcherak in economics

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Why Fear Automation?   Leave a comment

Do we fear robots will take our jobs?

Automation is a scary thing. Machines can replace humans at some jobs and there’s even those who fear that machines can do all of our jobs.

I don’t know about that.

Consider Piggly Wiggly’s. I don’t actually recall the PW we had in Fairbanks when I was a kid, but my mother preferred it over the Safeway that ran it out of business. Why? I have no idea. Safeway was bigger. Mom had no sense of direction. Maybe she just preferred the tiny store to the block-sized one. I’m speculating. Maybe PWs had better service.

Image result for image of piggly wiggly killed the general storeWhen Piggly Wiggly opened its first “self-service” grocery store in 1916, consumers found the new model more convenient and time-saving compared to the old model. What was the old model? You came to the store with a prepared list and a store clerk filled it for you while you waited. I’m told by my parents that this was a slow way to shop and of course you couldn’t make choices on brands or whatever.

The old system did employ a lot of clerks and those clerks lost their jobs when the Piggly Wiggly concept swept the industry.

You can go back in history and see that people were not starving in the streets in the 1920s, so where did all those store clerks go?

They found jobs as clerks in other industries. There were many neophyte companies attempting to bring life-enhancing products and services to the market and they could now acquire the manpower to make those dreams a reality. They electrified the country (light switches were invented in 1918) and introduced the small appliance (the blender and the pop-up toaster were invented in 1919).

Today, people are worried that Amazon Go will eliminate the need for the store cashiers. If you’re not familiar with this new concept – you enter the store, it scans an app on your smart phone. It uses technology to figure out what you take from the shelf and put in your bag and it can even deduct items if you change your mind. When you leave the store, it deducts the total from your bank account. Done. No more standing in line.

Do I think that means my favorite cashier will lose her job? Well, technically, she did when Fred Meyers installed a self-service lane where I scan my own groceries. But they’ve since added a second bay of self-service scanners which now has four or five cashiers to aid confused shoppers, so her job didn’t go away, it just changed. She’s no longer getting carpal tunnel scanning groceries, but she gets paid more than she used to. And I still get to see her bright and shiny face when I shop.

But Fred Meyers has come up with its own reversion to the full-service grocery store. You can now shop for groceries online and have a store clerk fill the order for you so that you can pick it up at a speed lane.

So, do I think machines will replace our jobs?

I think machines will replace some jobs, but for the most part, it will merely transform the jobs we do currently and even those people who find themselves out of work because their industry went away … if they get some training and get off their butts, they’ll find jobs in industries that we can’t even foresee yet.

Classical Liberalism Has Failed   Leave a comment

 

What do I mean by that?

It’s an acknowledgment that classical liberals failed in their attempt to limit the power of the state and our current mess in Washington DC is a prime example.

Their failure resides in their ideal allowing for the very thing that is poison to liberty. You see, classical liberals believed that at least a minimal state is necessary for a  functional civil society.  Unfortunately, once the state exists, it is impossible to limit its power.

Believe it or not, I didn’t believe that myself until fairly recently and I instinctively shy away from that realization, but it becomes increasingly obvious to me that even a minimal state will seek to acquire more power and grow far beyond what its original intention, no matter how we might try to limit it.

Image result for image of a public road with potholesOur Founders believed there was such a thing as “public good” – basically, the joint supply of services in such a way as to cease rivalry by a body with a monopoly on institutional coercion that obliges everyone to finance those goods.

Example?

Prior to the creation of the federal government in 1789, lighthouses in the United States were colonial- or state-owned and often privately managed.  Local entities collected “light-dues” based on the tonnage of vessels using the ports the lighthouse protected.

So, most people grew up with publicly managed lighthouses and assumes the state that stood behind them was necessary, even though England had an entire system of privately-managed and -financed lighthouses for centuries before the government took them over. Sailors associations, port fees, and spontaneous social monitoring offered an effective solution to any issues arising from private-ownership.

The “wild” west was indeed wild when first opened to settlement, but many of the problems of, for example, property rights of land and cattle had been worked out before the federal government finally got around to administering those territories. The now much-maligned entrepreneurial innovations like cattle branding, constant supervision by armed cowboys on horseback, and the introduction of barbed wire solved the majority of the issues there a long time before the government showed up.

Today, because the government controls the western states and puts forth a narrative that there would be chaos (just look at the Hollywood movies!) if the state weren’t there to protect the west from “anarchy”, people believe there is no alternative to the state controlling most of the lands in the American west.

People observe that today’s highways, hospitals, schools, police protection, etc., are almost entirely supplied by the state, and deeming these services to be necessary (which they are), they conclude without further analysis that the state must also be necessary.

Most people believe the state is also necessary to protect the defenseless, poor and “destitute”. Small depositors, ordinary consumers, and workers are all deemed too fragile and stupid to take care of themselves.

What if the above-mentioned resources could be produced to a much higher standard of quality more efficiently, economically and individually adaptable through entrepreneurial creativity, private property and spontaneous market order? For example, why am I stuck paying $80 a month for garbage collection on my city lot? I’m charged this regardless if I put out any trash. I might only put out one can every two weeks while my neighbor (who owns a daycare center) puts out a half-dozen cans every week … yet we pay the same amount. Why? Because a statist monopoly requires regimentation and prevents any sort of competition for our money. I could negotiate with a private company  to meet my actual needs and charge me for my actual needs rather than my government-perceived needs.

The hospital in my town is privately owned, though heavily regulated by the state. It never turns anyone away. It didn’t before the state got involved because it was owned by a church. Do those regulations assure that everyone is covered? It wasn’t the case in the past. Why would it be the case now? Have churches doing medical ministries changed their ministries substantially since government started regulating them? But we’re told these regulations are necessary because …????

But what about the roads?

What about them? My neighborhood roads currently look like a map of the moon with a few craters filled in. I live inside the City of Fairbanks where we see road maintenance rarely. Despite the fact that we get significant amounts of snowfall here, we expect to see the plows in March. Sometimes they might do a pass after a heavy dump, but they’ll inevitably leave a berm at the bottom of our driveway that requires quick and muscular action for about two hours after work to clear before the temperatures drop and turn it into immovable white concrete.

My brother lives outside the city in the borough (like a county) which technically does not have road powers. The roads around his house are maintained by a road commission that he pays fees to. The commission hires a contractor to take care of the road. These roads rarely have potholes and they’re fixed quickly if they occur. The snow is generally cleared by the time he gets home from work or when he gets up in the morning. Yes, it costs money, but less than what is collected from me in property taxes. Although the road service areas are administered through the borough, several of them existed before the borough took control of them and they would largely continue to be unaffected if the borough stopped collecting paperwork on them because people would still need to get to and from their homes if the borough stopped functioning in that capacity. My brother gets better road maintenance for less money from the private sector than I do from the public sector.

By the way, he can also now get trash collection from a private company for about the same amount as we pay in the city. I interviewed the owner of the company and he explained that if he had more customers, he could afford to charge less and provide more flexibility in service than he currently does.

Although the state insists its existence is necessary to defend property rights and coordinate social processes, the fact is that they are a body with a monopoly on violence (or its more subtle sister, coercion). The state invariably acts by trampling on numerous legitimate property titles, defending them very poorly, and corrupting the moral and legal behavior of individuals toward the property rights of others.

We shouldn’t be so wedded to the status quo that we refuse to see there might be other, better ways of doing things.

 

 

A Great & Frustrating Read   4 comments

December 4, 2017 – Review a book you’ve recently read.
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So, I read a lot, but lately, the only fiction books I’ve been reading are the yet-to-be-published manuscripts of friends who are fellow authors. I don’t want to review their books before they’ve even published.

One of the most exciting, and frustrating, books I’ve read in 2017 is James Scott’s Against the Grain: A Deep History of the Earliest States (Yale 2017). In prehistoric times, how did human beings discover how to feed themselves? How did we decide to become settled in one spot rather than move around as hunters and gatherers? Which leads to the biggest question (for me at least), where did the state come and why?

Scott’s fascinating argument is a fundamental challenge to the conventional theory of life on earth circa 15,000 to a half million years ago. Civilization is normally thought to have come into existence with the appearance of agriculture, sedentary living, and stable states. Scott, however, draws attention to the downside of states — taxes, the cruelty of classes, institutionalized castes of elites, merchants, tradesmen and serfs, disease, war, slavery, and so on — and argues that they might have diminished the quality of life as compared to what came before. What if life was better before the coming of what we call “civilization”?

Scott is a borderline left-anarchist and he shows this trait when he argues that there is no real relationship between settled living and “civilization”. Humankind resisted living in one place for many thousands of years precisely to avoid being trapped by states. We just wanted to be free. Scott also suggests that hunter-gatherers had it pretty easy: a good diet, plenty of exercise, and leisure. By comparison, agricultural life was pretty terrible overall and human health declined.

It’s easy to assume that Scott is advancing a Rousseauian fantasy about the blissful state of nature, but he really is trying to come to terms with the evidence as it stands, and assess the impact of state creation on human life. I think he’d find agreement with some Hayek fans — life was better when humans resisted organizing themselves and declined once they permitted themselves to be rounded up and regimented by a ruling class.

Unfortunately, I sense a whiff of primitive socialism in Scott’s premise when he suggests we should be living off the land, moving around a lot, and avoiding property ownership. I could be wrong about my assessment, because in an interview with Vox, Scott asserted that life is much better today than 10,000 years ago. It’s just that he seems to have a problem with the division of labor.

Modern industrial life has forced almost all of us to specialize in something, often in mundane, repetitive tasks. Specialization is good for economic productivity but not so good for individual self-fulfillment. Moving from hunting and gathering to working on an assembly line has made us more machine-like and less attuned to the world around us because we only have to be skilled at one thing.

Yup, that sounds lot like Karl Marx, who fantasized of a communist society where people would be free to move from task to task, able to sample all sorts of jobs, without concern for feeding themselves or keeping a roof over their heads. Of course, we all should know that actual communism (as opposed to Marx’ theory) didn’t quite work that way.

This is where I got frustrated with reading this otherwise challenging and enjoyable book. Scott does not seem to have a sense practical economic considerations, particularly as they pertain to the greatest invention of all, private property. His oversight here simply cannot be deliberate because it is so pervasive. Scott appears to be uninterested in private property as a technology of production. He actually goes out of his way to almost deny the historical importance of the emergence of private property norms. He seems to overlook a basic fact. Even if there was a time when nature provided enough for our needs without having to create additional wealth, humanity came to a point where it needed to find a way to overcome the scarcity of resources. We had to learn how to add to the store of available wealth to house, feed, and clothe ourselves. Scott omits resource scarcity as significant factor in human evolution.

I found that oversight frustrating because he has such insight into human history. Consider his moving observation on the discovery of fire:

Fire [first controlled by hominids 400,000 years ago] was the key to humankind’s growing sway over the natural world–a species monopoly and trump card worldwide…. Fire powerfully concentrates people in yet another way: cooking. It is virtually impossible to exaggerate the importance of cooking in human evolution. The application of fire to raw food externalizes the digestive process; it gelatinizes starch and denatures protein. The chemical disassembly of raw food, which in a chimpanzee requires a gut roughly three times the size of ours, allows Homo sapiens to eat far less food and expend far fewer calories extracting nutrition from it. The effects are enormous. It allowed early man to gather and eat a far wider range of foods than before: plants with thorns, thick skins, and bark could be opened, peeled, and detoxified by cooking; hard seeds and fibrous foods that would not have repaid the caloric costs of digesting them became palatable; the flesh and guts of small birds and rodents could be sterilized.

Who did the fire belong to? How did these early humans divide up the cooked food. What were the rules and who established them? These are all property ownership issues. Without rules governing them, there would be nonstop conflict, which a dictator or tribal leader might resolve with some informal rules, but would be really hard to enforce in a spread-out and mobile tribe.

Because I’m mainly reading books like this to improve my apocalyptic series, I was curious about how private property came into play, but Scott pretty much ignored the question.

 

He writes with passion and vigor about the 4,000-year gap between the domestication of grains and animals and the eventual settling down of humans into organized and sedentary communities. But nowhere does he discuss what innovations in the rules of property claims made this change possible.

In all honesty, looking at reality, at some point, people had to stop stealing each other’s stuff, get smart, and come to agreement. As people, we have to trade our stuff for their stuff, which gives rise to the division of labor. Economic complexity grew from that. Despite what anarcho-communists might wish, that’s how the real world we live in works. I don’t steal your stuff, you don’t steal my stuff — if we want to get each other’s stuff, we have to trade for it. Welcome to civilization!

I’m going to hazard to guess that Scott’s personal ideology blocked him from consider these issues very seriously, which is too bad, because his book would be great if he’d been willing to look at scarcity and how it might drive a mobile tribe of hunters and gatherers into becoming creative and inventing the norm of mine and yours and applying it to land and the products of production.

Scott’s empirical account does not contradict this thought, but his premise seems to identify statism with ownership, trade, the division of labor and the rise of civilization.

Except for that flaw, I’d love to have Scott for a history professor and to delight in his discussion of all the stuff that matters, but he fumbled the ball by avoiding the problem of scarcity and property. Scott claims to be an anarchist — or at least advocates for looking at history through an anarchist lens, which made this book a delight, but his failure to grasp a fundamental economic principle makes me wonder if he truly understands what anarchism is all about.

 

 

Regulatory Reducing Diet   Leave a comment

The last Western Union telegram was sent 11 years ago. Why? Because technology outstripped its usefulness a long time ago. But the FCC recently decided to end burdensome regulations that stifled telegraph technology. As Reuters reported:

 

AT&T Inc, originally known as the American Telephone and Telegraph Company, in 2013 lamented the FCC’s failure to formally stop enforcing some telegraph rules.

‘Regulations have a tendency to persist long after they outlived any usefulness and it takes real focus and effort to ultimately remove them from the books even when everyone agrees that it is the common sense thing to do,’ the company said.”

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Regulations are far easier to create than they are to dismantle, yet there has been an undeniable trend of repealing these types of regulations lately. We haven’t seen anything like it since the Reagan administration. Who is responsible for this housecleaning? None other than President Donald Trump.

 

Ronald Reagan left many legacies during his duration in the White House. I could grumble out his contribution to the War on Drugs, but I’m going to focus on his deregulatory accomplishments.  During the Reagan administration, both the Federal Register and federal regulations decreased by more than one-third. That’s a pretty impressive record, considering most presidents increase regulation, but Donald Trump has already shattered that record.

Yes, he’s been in office less than a year and has already accomplished more on this front than Reagan did in eight years. Upon taking office, Donald Trump signed an executive order telling federal agencies that they must cut two existing regulations for each new regulation proposed. Contained within this executive order was the demand that each federal agency create a task force with the explicit purpose of finding regulations worth slashing. This act was intended to help the newly sworn-in president reach his promise of cutting 70% of all federal regulations.

Regulatory cuts are typical GOP rhetoric, but the left immediately set about to fight this executive order. A coalition of left-leaning organizations even joined together in February to sue Trump on the grounds that his executive order would potentially “block or force the repeal of regulations needed to protect health, safety, and the environment, across a broad range of topics – from automobile safety, to occupational health, to air pollution, to endangered species.”

Trump doesn’t scare easily. He’s an old hand at lawsuits. He’s continued forward with his objective.

The score speaks for itself. During the same point of time of their respective presidencies, Obama’s regulatory tally was at 1,737 while Trump’s is 1,241. And while Reagan’s own regulatory cuts were admirable, they still don’t compare with Trump’s if you judge them by the same time frame.

Earlier this October, Trump announced his plans to further cut taxes along with red tape that negatively impacts both businesses and consumers. According to CEI, the current level of federal regulatory burdens have amounted to nearly $2 trillion. Business owners pay the initial costs, but regulatory burden inevitably trickles down to the consumer. When overhead costs are raised on entrepreneurs, the cost must be made up somewhere. These hidden costs account for about $15,000 per household in any given year.

As the 2017 fiscal year came to a close this month, the White House also released its initiative to cut more red tape to jump start the economy. Obviously, the “do nothing” method is a far cry from Obama’s overbearing regulatory intervention. This is pleasing Trump supporters, the business sector and economics geeks like me who are fed up with a decade of economic stagnation, but recognize that Congress has yet to act on any substantial reform in either the House or the Senate. This is all being done by executive order. Regulations, by the way, are the one area where Presidents may act without the advise and consent of Congress. Regulations are an Executive Branch function.

The White House has continued its efforts to encourage regulatory relief by pushing for three specific reform efforts, listed by CEI’s Clyde Wayne Crews as follows:

  1. Trump’s January executive order requiring agencies to eliminate at least two rules for every new regulation adopted, and that they ensure net new regulatory costs of zero;
  2. A sweeping  Reorganization Executive Order that requires the Office of Management and Budget to submit a plan aimed at streamlining and reducing the size of the administrative state generally. This plan will set the tone for Trump’s budget proposal next year.
  3. memorandum from the new Office of Information and Regulatory Affairs (OIRA) administrator Neomi Rao directing agencies, for the first time as far as I can tell, to propose an overall incremental regulatory cost allowance for the agency in the new edition of their “Unified Agenda” on regulations. This report will appear in the fall. Prior editions, since the 1980s, would label rules as “economically significant,” but never has there been such a “regulatory budget.” Rao says, “OMB expects that each agency will propose a net reduction in total incremental regulatory costs for FY 2018.”

So, let me guess – you haven’t heard about this, right? That’s because the media have largely ignored it. Yeah, they never miss an opportunity to criticize President Trump, but somehow this massive rollback of regulation has escaped their notice.

 

Without economic liberty there can be no general freedom, which is why a decrease in the regulatory state is so important. There are many areas where I deeply disagree with President Trump, but increasing economic freedom is no small feat and it deserves a standing ovation. 

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