Sunday, July 24, 2016

More borders can mean more freedom

While borders can often work to inhibit the movement of goods and human beings, they can also offer opportunities for greater freedom by limiting the power and reach of existing states.
What a splendid point! We Need More Borders and More States says Ryan McMaken. Anarchism and Radical Decentralization Are the Same Thing is another message from the same author. I could not agree more. The following passage is from the American Declaration of Independance
We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.--That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, --That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government ...
I agree. Let us abolish government. We don't even have to institute a new one. 

Thursday, June 09, 2016

Taking a lot of time off affects your salary

Those who have read and understood economics know that people get paid according to their value creating abilities on the free market. This means that working people ask for pay raises or change jobs until they have obtained their free market "price" so to speak.

It follows that women or men who work fewer hours than others in order to stay more at home with their children get a lower salary than others. Their careers are quite simply shorter in number of hours used to build up value creating abilities and experience. This can be backed up by data, but really it should just be self-evident.

This baffles many. People say in a state of shock that everyone should get equal pay for "equal work", usually referring to the so-called wage gap between women who have children and others, such as non-married, childless men and women.

A good understanding of economics can clear ones mind when following the public debate on different topics. It will for example teach you that nobody wants to pay you for taking more time off than others.

Wednesday, May 04, 2016

Socialism in a nutshell

The following is taken from the Facebook-page of the FEE president Lawrence W. Reed, and I find it brilliant:
My take on socialism is this: Socialism only seems to work when you don't fully implement it, when you keep enough capitalism around to pay socialism's bills, at least for a time. It's the difference between milking the cow and killing it. Socialism has no theory of wealth creation; it's just a destructive, envy-driven fantasy about redistributing it after something else (and somebody else) creates it first.
I might just as well post two of my other two favorite comments on a similar topic:
The trouble with Socialism is that eventually you run out of other people's money.
- Margraet Thatcher
And:
Government is the great fiction through which everybody endeavors to live at the expense of everybody else.
- Frederic Bastiat
Anything to add?

Sunday, April 24, 2016

Left, right and the libertarian middle

We often talk about "left" and "right" in politics (or "liberal"-"conservative").

Some say that these terms are obsolete as they don't capture the reality of political discourse. Say someone is for higher taxes, more welfare but despises politicians. Is he to the left or to the right? Say someone wants lower taxes but restrictions on some private matters via government control. Is he to the right or left?

There is however a way to reconcile the terms of "left" and "right" by applying the concepts to a different degree of scepticism towards government control and meddling. Those who adore the State are those furthest to the left. Those who want a completely voluntary society are furthest to the right.

This will obviously place National-Socialists (nazis), Communists and other State-fans furthest to the left. Next to those are the left-liberals, social-democrats and other traditional leftists. In the middle we have most people - sceptical towards the State in some issues but more open to State-interference in others.

Furthers to the right are the libertarians who want to abolish the State and live in a completely voluntary society where each man is the full owner of his own body and the property belonging to it.

Another way to look at the left-right scale is by placing the libertarians in the middle. Those to the right lean towards state interference in social matters but a low degree of State-control of the economy. Those to the left lean towards government meddling in the economy but prefer the absence of the state in social issues. They meet somewhere near the middle with the libertarians who don't want any State-intervention.

I believe "left" and "right" are useful concepts but in order to be so, they must be understood in relation to the State as an entity that we either tolerate or not, or tolerate to a certain degree.

Tuesday, February 03, 2015

Slavery is good, they say

Slavery is a normal condition in human society. The strong chain the weak and make them work for them. The few but organised enslave the many. The group with the most advanced weapons enslaves the others with no weapons.

Before slavery was really considered a crime against humanity (or humans, to be precise), many argued for its maintenance. Some of the main arguments are summarised here, including:
  • Slavery has always existed
  • Every society in the past has had slavery
  • The slaves can't take care of themselves
  • Free people are worse off than slaves
  • Getting rid of slavery will require violence
  • Slaves can be made well off by providing them with free housing, good clothes and regular meals. Why take this away from them?
Does any of the above sound familiar? For me, its all the arguments we hear today against abolishing the welfare state and further the state altogether.

For me it sounds like we are told that we are worse off free than as enslaved citizens.

For me it sounds like I am being told: You are bound within the state, and are better off like this, since the state has always existed and men without a state cannot take care of themselves without inflicting violence on each other.

I say: Bullshit!

Thursday, September 04, 2014

Ban heavy metal concerts?

I wonder why I haven't seen anyone proposing a ban on heavy metal concerts. Lets look at the typical arguments:
  • People spend a lot of money on them (no subsidies available for this particular music, and in fact heavy taxes all around).
  • People get hurt. They get stamped down, kicked and pushed.
  • It's a "closed venue" for the handicapped, and very petite individuals can get seriously hurt if they enter the thickest crowd. 
  • Property gets damaged and lost. Try watching your money or set of keys in a crowd during a heavy metal concert! You just have to hope they stay in place. Sometimes they don't.
  • The lyrics are so nasty! They speak of death, mutilation and other nasty stuff. 
  • No-one can really breath that much during a heavy metal concert, not even when they are held outside. The body mostly inhales sweat and air with little oxygen.
But wait a minute, perhaps it's not so bad after all? I mean, no-one believes that the nanny-state can help you during a heavy metal concert. People take care of each other in the black sea of a lot of people sharing very little space, while trying to bang their heads with the music.

Just a thought.

Wednesday, August 20, 2014

The e-cigarette: A potential target for politicians?

For decades, the government has played a game with smokers: Urged them to quit since their smoking-related diseases are a burden on the government subsidized health care system, but kept cigarettes around and extremely taxed in order to obtain revenues from them. Smokers are indeed a dying race, but they remain resilient although most of their civil freedoms disappear as soon as they light the cigarette.
It is a difficult task to estimate how much money has been spent on getting smokers to quit their addictive habit. Most of the methods used are completely decoupled from reality. Smokers should quit because they die too young – so what? Aren't the nearly-bankrupt pension systems in most countries in a dying need to get rid of some of our elders? Smokers should quit because they carry around toxic chemical that kill asthma-patients and children. Well, so do cars, many toys, the windmill-factories, the paint used to make protester-signs for Greenpeace-rallies, and so on. Smokers should quit because they are wasting their money. So is the taxpayer. Should he quit paying taxes?
Smokers remain resilient and for good reasons. First of all, nicotine is hard to kick. Second of all, smokers usually have a lot of little daily routines built around the cigarette: The first coffee cup in the morning, the break at work, the getaway from a hectic household, the relaxing effect when watching television, the holding of something in ones restless fingers, etc. The government has not seen this, but the free market did. Hence the invention of the electronic cigarette, or the e-cigarette.
The e-cigarette is usually a two-part device: A battery and a container for a liquid. The container stores the liquid and a small burner inside it heats it up so that a damp is created, and this can be inhaled. The liquid can be mixed with nicotine. The smoker can then get his “fix”. The damp contains traces of different chemicals, but in such small concentrations that the man standing next to the smoker can usually not smell anything. Compared to the cigarette, the e-cigarette is next to harmless for the user. Compared to car exhaustion, it’s probably completely harmless.
The free market invented the e-cigarette and its popularity is on the rise. Smokers find a lot of the benefits of the cigarette in the e-cigarette (e.g. something to hold in the hand, the feeling of smoke/damp coming out of the mouth, and the nicotine of course). If a smoker wants to kick his habit, he can do so by gradually decreasing the nicotine concentration in his liquid. Thus, the e-cigarette cab assist smokers to quit, although others just want to go on smoking, but without the health risks of the burnt and tar-polluted tobacco leaf and cigarette paper.
Non-smokers feel nothing. They see damp and can perhaps catch some traces of the aromas in their nostrils, but only if they stand close to the smoker and smell on purpose. Do we again have a harmony between the smokers and non-smokers?
The governments of the world have for most part not gotten around to legislate against the e-cigarette. This means that the insanely high tobacco taxes have not reached the e-cigarette yet. Smokers can thus save a lot of money. But whatever isn't legal is often de facto illegal. The black or gray market  bridges the gap in many countries. In Denmark, for example, the nicotine-blended juice is not exactly legal, but widely sold, especially on the internet, and the police seem to do little about it. In Holland, everything is available in the nearest tobacco store.
But where there is harmony and peace there is also a potential for politicians to disrupt everything and make their mark. In many countries, politicians are preparing to step in. They can’t sanction anything which resembles smoke, and see all the tax money from cigarette sales potentially evaporate (forcing them to consider such taxes and a sugar-tax and fat-tax instead to make up for the lost revenue of smoking). In their crusade they can rely on such organizations as The American Heart Association to provide a “scientific” basis for a bigger government with more rules and regulations.
The epoch of the e-cigarette will likely be short-lived. In the meanwhile, I intend to smoke with such a device. If the legislation steps in, restricts access, imposes high taxes and bans some of the nicer variants of the technology, I’ll at least have had a short period of improved health and personal finance. Time will tell what I’ll do after that.


Poverty: A choice

Why are some countries rich and others poor? I'll make a proclamation: Poverty of countries is their own choice. It is a choice between the power of the state and the richness of the people. Poverty is a selected situation, selected above economic freedom on purpose.

Lets think about the following: Denmark and Hong Kong are countries with very little natural resources. They need to buy from others to have something to sell to still others. Denmark buys steel and coal to produce stuff to sell. Hong Kong has more or less nothing other than manpower. These countries are among the richest the world, and in terms of economic freedom also among the freest.

Zimbabwe and South-Africa brim with natural resources and vast, fertile lands. They are poor and will remain so until the power elite release their grip. Their supporters need to drop their ambition for equality and opt for economic freedom instead.

(As it happens, equality is not a function of income or geography. The richest 10% and poorest 10% will own a similar portion of the total product, no matter how large the total product is. Therefore, enlarging the total product is the only way to better the lot of the poorest.)

Brazil and China are the middle-of-the-road countries. You can do business there, and can have access to nearly unlimited resources of both people and those from nature within the boundaries of those countires. However, you can't feel secure about anything. And Brazil, to name an example, has such a jungle of taxes and regulations that a whole army of people is needed just to cut through.

Poverty is a choice. Poor countries are poor by choice. Think about it. I will.

Monday, February 17, 2014

The childish attitute of socialists (literally)

After I became a parent (roughly in the year 2009), I have begun to notice a lot of traits in children that can be found in the political debate among adults. Most of these are obvious, such as having no understanding of economics and expecting free stuff to rain from the heavens without any work at all (or minimal effort, such as behaving or being polite). This, of course, is understandable, and can actually be required of children. They are, after all, children, and should focus on building their social skills and grasping the basic stuff in life (such as sleep and food).

The more amazing part is the way many adults actually think like children. Some people, mostly socialists, believe we can live in a world without efforts and patience. They think we can "share the burden" by removing burden from everyone. This leads to total poverty of all. A better way to "share the burden" is to make everyone more productive, such as with capital investment (which requires savings, patience and private property).

It takes a lot of effort and work to train a sense of work ethics in children. They don't just "get it". They need to learn how to save for stuff they really want. They need to learn to work for the things they want. This is not easy for all children. Some are just spoiled and lazy and need a "kick in the ass", so to speak.

And so be it. Children are children. The more amazing part is that many grown-ups are still children in this respect.

Usually socialists.

Friday, November 29, 2013

Inflation is a policy

Inflation is a policy. And a policy can be changed. Therefore, there is no reason to give in to inflation. If one regards inflation as an evil, then one has to stop inflating. One has to balance the budget of the government. Of course, public opinion must support this; the intellectuals must help the people to understand. Given the support of public opinion, it is certainly possible for the people's elected representatives to abandon the policy of inflation.
.. says Ludwig von Mises in his Economic Policy: Thoughts for Today and Tomorrow (pp. 72-73). And there you have it! Do you hate to see your salary decrease in value, year by year, unless you get a substantial raise? Blame the government! Would you like to be able to buy just as much for your savings today and in 20 years, but you realise that you can't? Blame the government! Inflation is a policy. That's it. 

Monday, September 23, 2013

Natural economic laws

Once, during a speech which he was making at a statistical congress in Bern, [Vilfredo] Pareto spoke of 'natural economic laws,' whereupon [Gustav] Schmoller, who was present, said that there was no such thing. Pareto said nothing, but smiled and bowed. Afterward he asked Schmoller, through one of his neighbors, whether he was well acquainted with Bern. When Schmoller said yes, Pareto asked him again whether he knew of an inn where one could eat for nothing. The elegant Schmoller is supposed to have looked half pityingly and half disdainfully at the modestly dressed Pareto - although he was known to be well off - and to have answered that there were plenty of cheap restaurants, but that one had to pay something everywhere. At which Pareto said: 'So there are natural laws of political economy!'
From Rothbard's Austrian Perspective on the History of Economic Thought, Volume II (p. 459). And what a gold mine this book is! It almost makes one think that history teaches us nothing, that all the mistakes of the past are doomed to be repeated again and again, and every time this happens, something of the good of human thought is lost. One of the mistakes is to consider humans as mere robots, programmable and acting only according to the dictates of the State. This is a fallacy, and an old one. Humans have a "nature", something that you can try to stamp on, force or manipulate, but which you cannot change. The sooner we acknowledge this, the sooner we are on the highway to prosperity, peace and harmony of interest.

Tuesday, September 17, 2013

GDP and monetary pumping

In an age where "the GDP" is usually considered the all-important parameter to measure the "health" of an economy, the following should be kept in mind:
Remember that changes in GDP are a reflection of changes in monetary pumping: the more is pumped the greater the rate of growth of GDP. (#)
Therefore, it is sad to see robust and solid companies base their forecasts on forecasts on GDP. This is pure guess-work. An increase in GDP is more often than not harmful. A lowering GDP could even be a surer sign of an improving health of an ecomony, as monetary contraction is in many ways a cleaning process rather than the other way around.

Wednesday, August 07, 2013

The Art of Taxation

The art of taxation consists in so plucking the goose as to obtain the largest amount of feathers with the least amount of hissing.
..said Jean-Baptise Colbert (1619-83), who, to quote Wikipedia, was "a French politician who served as the Minister of Finances of France from 1665 to 1683 under the rule of King Louis XIV". The quotation is from Murray N. Rothbard's The Austrian Perspective on the History of Economic Thought, Volume I (Economic Thought Before Adam Smith), page 246.
That being said, he was also an honest supporter of an all-embracing State, that could choke or support all forms of labour and industry as she liked.
I call him an honest Leftist. If only modern day leftists could state their attitudes as clearly as the power-crazy French politician (who receives undeserved praise in Wikipedia).

Sunday, July 14, 2013

Give me advice, and no more

Give me as much advice as you please, but constrain me to nothing. I decide upon my own proper risk and peril, and surely that is enough without the tyrannical intervention of law.
..says Bastiat (The Bastiat Collection, p. 982), and I agree.
By what right does the organizer of artificial systems venture to think, act, and choose, not only for himself, but for everyone else? for, after all, he belongs to the human race, and in that respect is fallible; and he is so much the more fallible in proportion as he pretends to extend the range of his science and his will.
..says Bastiat (The Bastiat Collection, pp. 970-971), and how true! Those who want to rule us all (either as tyrants of "representatives" in a democracy) should keep their good advice to themselves if they want to put it into law and enforce them via the force of the police or military.

Friday, July 12, 2013

The other side of welfare: Idleness

Were all our citizens to say, “We will club together to assist those who cannot work, or who cannot find employment,” we should fear to see developed to a dangerous extent man’s natural tendency to idleness; we should fear that the laborious would soon become the dupes of the slothful. Mutual assistance, then, implies mutual surveillance, without which the common fund would soon be exhausted. This reciprocal surveillance is for such association a necessary guarantee of existence—a security for each contributor that he shall not be made to play the part of dupe; and it constitutes besides the true morality of the institution. By this means, we see drunkenness and debauchery gradually disappear; for what right could that man have to assistance from the common fund who has brought disease and want of employment upon himself by his own vicious habits? It is this surveillance that re-establishes that responsibility the association might otherwise tend to enfeeble.
..says Basitat in his Economic Harmonies, Book II (pp. 842-843 in The Bastiat Collection), first published at around 1850. The remainder of this part of the book is a sign of remarkable foresight from a man who understood the nature of the State better than most.

Thursday, June 27, 2013

Patents hurt us

[B]ecause of generalized and ever extended patenting, pharmaceutical companies have grown accustomed to operate like monopolies. Monopolies innovate as little as possible and only when forced to; in general they rather spend time seeking rents via political protection while trying to sell at a high price their old refurbished products to the powerless consumers, via massive doses of advertising.
...say Michele Boldrin and David K. Levine in their book, Against Intellectual Monopoly (chapter 9). Their case is compelling as far as I can see, and it is against patents (for their own book as well as for drugs and other "intellectual property").

I intend to read their book, and also the monograph Against Intellectual Property by the libertarian Stephen Kinsella. In my mind, there can be no justified reason to hold ideas sealed behind a veil of "property rights" that the State has imposed in order to protect big business. Now I need to get familiar with all the arguments. Wish me luck?

Sunday, June 02, 2013

Why the State can get away with it

One of the crucial factors that permits governments to do the monstrous things they habitually do is the sense of legitimacy on the part of the stupefied public. The average citizen may not like — may even strongly object to — the policies and exactions of his government. But he has been imbued with the idea — carefully indoctrinated by centuries of governmental propaganda — that the government is his legitimate sovereign, and that it would be wicked or mad to refuse to obey its dictates. It is this sense of legitimacy that the State's intellectuals have fostered over the ages, aided and abetted by all the trappings of legitimacy: flags, rituals, ceremonies, awards, constitutions, etc.
...says Murray N. Rothbard in his For a New Liberty: The Libertarian Manifesto (chapter 12). And how true! The reason the State can do what it does, mostly without resistance no matter what, is because most of us consider the State to be a legitimate entity. A member of the mafia, extracting "protection fees" and "contributions" from the local shop keepers, is always frowned upon. The tax collector is not. The tax collector is a man with a "normal job" and someone working for "the society". But really he isn't. He is a member of the biggest mafia, and a mafia that can operate mostly without resistance. And this is our fault.

Thursday, May 02, 2013

The Welfare State vs. The Family

Today, the welfare state provides a great number of services that in former times have been provided by families (and which would, we may assume, still be provided to a large extent by families if the welfare state ceased to exist). Education of the young, care for the elderly and the sick, assistance in times of emergencies—all of these services are today effectively “outsourced” to the state. The families have been degraded into small production units that share utility bills, cars, refrigerators, and of course the tax bill. The tax-financed welfare state then provides them with education and care.
How true! This and more in the very well written and informative book, The Ethics of Money Production. My favorite: The families have been degraded into small production units that share utility bills, cars, refrigerators, and of course the tax bill.

Sunday, April 07, 2013

Labour is not wealth

 If men lived in diving-bells under water, and had to provide themselves with air by means of a pump, this would be a great source of employment. To throw obstacles in the way of such employment, as long as men were left in this condition, would be to inflict upon them a frightful injury. But if the Labor ceases because the necessity for its exertion no longer exists, because men are placed in a medium where air is introduced into their lungs without effort, then the loss of that Labor is not to be regretted, except in the eyes of men who obstinately persist in appreciating in Labor nothing but Labor in the abstract.
This is a simple point from Bastiat (Domination by Labor, from The Bastiat Collection, pp. 427-428). At the same time, it is both neglected and understated, even rejected.

We can keep it simple: Labour is not wealth. Wealth is stuff and services, bought with the fruits of labour. The less labour we need to finance the stuff and services we want or need, the better. Should all our needs fall from the sky and render labour unnecessary, we would become better off.

Saturday, October 20, 2012

The Welfare State

Here are two short quotes from an excellent book, The Ethics of Money Production:
Today, the welfare state provides a great number of services that in former times have been provided by families (and which would, we may assume, still be provided to a large extent by families if the welfare state ceased to exist). Education of the young, care for the elderly and the sick, assistance in times of emergencies—all of these services are today effectively “outsourced” to the state. The families have been degraded into small production units that share utility bills, cars, refrigerators, and of course the tax bill. The tax-financed welfare state then provides them with education and care. (p. 189)
It is precisely because the welfare state is an inefficient economic arrangement that it must rely on taxes. If it had to compete with families on equal terms, it could not stay in business for any length of time. It has driven the family and private charities out of the “welfare market” because people are forced to pay for it anyway. They are forced to pay taxes, and they cannot prevent the government from floating ever-new loans, which absorb the capital that otherwise would be used for the production of different goods and services. (p. 190)
The book takes the reader through a wide range of subjects in economics and political philosophy, which is good. However, this does leave the reader asking many questions not covered by the book, since answering all of these would probably expand the book to a huge size. So I hope the author continues to write on e.g. ethics, and elaborate further on his many insights.