Saturday, June 24, 2006

How about that?

The relative freedom of the computer industry has led to an explosion of innovativeness and productivity. The same freedom in the energy industry will lead to the same result. (#)
A bold statement, but that doesn't make it false. Those industries that have had the least government-monitoring have historically been those industries that have prospered (or swiftly perished when they were no longer needed). This is no coincidence. When a politician shows interest in something it usually means that this something is in great jeopardy (at least when it comes to innovativeness and productivity).

Adam Smith turns Austrian

Here is a nice little observation usually expected in the writings of the Austrian School:

As many economists and philosophers have tried to point out, what people actually want is best discovered by observing what they actually do.
However, this is written on the Adam Smith Institute Blog, and that is refreshing.

Sometimes, attempts are made to avoid the necessary focus on the individual when it comes to preferences and choices. Adam Smith made many such attempts, he being a statist in number of aspects. We shouldn't be fooled by the arguments of the statists when they address their individual readers. The individual has preferences, makes choices and seeks to fulfil his needs. No other point can be legitimately made.

Saturday, June 17, 2006

Greenies should love the free market

At present I am living in a relatively socialist country, namely Denmark. Sure enough, Denmark is a free-market economy where the government is put to place with a strict constitution and where the State is forced to take small steps to decrease individual freedom. Taxes are high and regulations many, but the free market is alive and doing well thanks to bounds put on the government.

A trendy thing among generally well-doing Danish city-people is buying "organic" food (food grown without use of artificial fertilizers, for example when growing grass or raising livestock). Organic food is expensive, but many Danish people buy it anyway. As a consequence, when demand is in place, supply comes flowing. Even the cheapest of supermarkets now present organic food-products on their shelves and compete in price with the more exclusive higher-priced stores that focus on the organic buying consumers.

This is what happens in a free market when there is demand for something. A couple of decades ago, organic food was hard to find and almost impossible to afford. Only the rich, well-to-do former-hippies could buy it. Now it is easy to find and easier to buy. The free market has supplied the anti-free market Leftist creed with the products of their choice for an affordable price.

The Greenies should, but don't, learn from this. If they only want organic food, they can simply buy organic food. If they want people to live in straw-houses and cut down on energy consumption, they can simply build straw-houses and use less energy. If they want the public schools to receive more funds, they can simply transfer money to the public school system. Their problems first become real problems when they ask the State to increase taxes and multiply regulations so that their will can be forced upon everyone else.

How would the market for organic food look like today if the State had actively moved into the subsizidition and production of organic food? Economic growth would have suffered, the average guy would have been made poorer, the market would have shrunken and organic food would have been less in supply and higher in price. The Greenies should really start to appreciate the free market! In the name of anti-free marketers wishes!

Sunday, June 11, 2006

Is high quality not a market product?

Ludwig von Mises is (or was) one of the greatest minds of our known existence. I don't disagree with the man in any areas. Everything he has written and I have read makes perfect sense to me. So far, with only one exception.

Mises writes:

One of the great problems of capitalistic civilization is how to make high quality achievements possible in a social environment in which the "regular fellow" is supreme.
How is this a problem? It is basic knowledge that in a rich society (thereby capitalistic), more people can afford more expensive luxury than in a poor society. The higher arts are a form of luxury. Therefore, the "normal" individual in a capitalistic society is relatively rich and can afford to buy more expensive products AND arts than the one stuck in socialism and other forms of economically destructive systems.

Mises's worries might be explained by the fact that relatively fewer will indulge in the higher classic arts compared to the normal when mass-production takes over from the historically more common home-craftsman-ship. But relativity is a false measurement for popularity. Ask a 1000 persons about their favorite book and only a percent or so will say the same title. But that doesn't mean there is a lack of taste among the masses. It only means the competition for the "best" is hard, and that a massive number of excellent books is competing for the title.