The United States Again Fails to Make the Top 10 Freest Countries

My latest column for the American Institute for Economic Research is "The United States Again Fails to Make the Top 10 Freest Countries."

Latest Scribblings

TGIF: There’s No Such Thing as Economic Freedom

Op-ed: The Wisconsin Union Fight Reconsidered

TGIF: Is Freedom a Radical Idea?

Throughout history, and with only the rarest of exceptions, freedom has been far removed from the center of political events — even during that ostensibly exceptional period, say, 1776-1901.

This drawn from my remarks at Libertopia. Read the rest of TGIF here.

Kirzner Speaks

Israel Kirzner, the eminent economist of the Austrian school, speaks about the morality of markets.

Beyond Efficiency from FEE on Vimeo.

Question

If people can't be trusted with freedom, how can they be trusted with power?

Humility or Hubris?

Another presidential election has come and gone, only this time the results are astoundingly and, yes, satisfyingly historic. In light of our racial history and leaving aside political philosophy, I am overjoyed at what Barack Obama’s election means. I cannot put it better than Will Wilkinson did at The Fly Bottle, “It means something profound that a black man was elected to the most visible, high-status position our society offers. The mere fact that Obama won truly does make our society a better place.” I also share Wilkinson’s reservations. In a truly free society, the presidency would not be the most visible high-status position our society offers. That designation would be reserved for a variety of private-sector roles. Unfortunately, however, the presidency does have that status today, and Obama’s election must be appreciated from that perspective. Relatedly, I am uneasy about, though understanding of, the public displays that followed John McCain’s concession Tuesday night. Again, Wilkinson: “[F]rankly, I hope never to see again streets thronging with people chanting the victorious leader’s name.” Amen.

President-elect Obama’s many supporters and well-wishers have great confidence in his ability to solve the economic problems that vex American society. That ability is said to lie in his cool judgment, his good intentions, and his eloquence. Let us grant that he possesses all three. Valuable as they are, they will be useless if he attempts to solve our economic problems directly by an exercise of power. That’s because there is something he does not have -- something no man or woman can have: the power to repeal the laws of economics.

The rest of this week's TGIF, "Humility or Hubris?" is at the Foundation for Economic Education website.

Cross-posted at Liberty & Power.

Theory and Crisis

What might be even more distressing than the current buildup of the corporate state in response to the supposed economic crisis is the way some self-styled advocates of the free market are willing to cast aside the economic theory they claimed to embrace.

The rest of this week's TGIF, "Theory and Crisis," is at the Foundation for Economic Education website.

Bailout Hypocrisy

Thud. That was the sound of the other shoe dropping. In response to severe problems in the credit markets, thanks to years of government intervention, the Federal Reserve, the government's counterfeiter and chief culprit in the current crisis, has opened its discount window to the investment banks. Interest rate: 2.5 percent. Until recently, only commercial banks could borrow money from the Fed. But now investment banks may also -- and here's the kicker: They can put up shaky mortgage-backed securities as collateral. Which means the American people are potentially on the hook for those loans. Should they go bad, we Americans will pay either in inflation-induced higher prices or higher taxes. Investment banks that may have invested in bad mortgages are already taking advantage of the new opportunity. Is this a great country or what?

The rest of this week's TGIF, "Bailout Hypocrisy," is at the Foundation for Economic Foundation website.

Latest Writings

I've been reading the news about soon-to-be-ex-New York Governor Eliot Spitzer with mixed feelings. Yes, mixed. On the one hand, there is something satisfying in seeing an insufferably self-righteous, politically ambitious, ham-handed, and ethically challenged former prosecutor lose his grip on power because he did what he used to prosecute other people for doing. On the other hand, he was caught in a victimless crime because the ludicrously named Patriot Act requires banks to inform the IRS when their depositors engage in "suspicious," that is, unusual, financial activity. Big Brother lives.

The rest of this week's TGF, "Big Brother Really Is Watching," is at the Foundation for Economic Education website.

When a private company screws up, there is no shortage of people demanding more government intrusion in the marketplace. But when the government screws up, they don’t call for less government. They call for more.

The economy is slowing down, and the government is at fault. But, if anything, the policymakers and pundits want the government to do more of what got us into trouble in the first place. If a lot of poison is bad, a lot more is somehow good. That’s the logic of statism.

My latest op-ed, "The Government's Chickens Are Back," is at The Future of Freedom Foundation website.

A Little Symmetry

Whenever some spectacular example of corruption or incompetence occurs in the more-or-less private sector, the usual cast of government enthusiasts declare that the time has come to severely restrict the "free market."

I demand symmetry.

The current economic slowd0wn is another spectacular example of government corruption and incompetence. Time to severely restrict -- no, abolish -- the government's power to interfere with our consensual activities.

Health-Care Cons

The economist Joan Robinson (1903-1983) wrote, "The purpose of studying economics is not to acquire a set of readymade answers to economic questions, but to learn how to avoid being deceived by economists."

A better reason to study economics is to avoid being deceived by politicians; they are the far greater threat to life, liberty, and the pursuit of happiness. When you consider that the typical political campaign is little more than a series of confidence games, understanding basic economics is a matter of survival. Without such an understanding one is an easy mark.

The rest of this week's TGIF, "Health-Care Cons," is at the Foundation for Economic Education website.

Political Stimulus

Not understanding basic economics is dangerous because you’re vulnerable to political con games foisted by unscrupulous politicians.

Economics properly conceived is just common sense about human activity. An examination of the proposed economic stimulus will make this clear.

The rest of my op-ed, "Political Stimulus," is at The Future of Freedom Foundation website.

Catching Up

I've been on the road and Free Association is one of the things I've neglected. Here's an attempt to catch up:

"It's like taking a bucket of water from the deep end of a pool and dumping it into the shallow end. Funny thing -- the water in the shallow end doesn't get any deeper."

That's how George Mason University economist Russell Roberts describes the logic -- rather, illogic -- of the economic "stimulus" proposals that everyone and his uncle are proposing.

The rest of last week's TGIF, "An Unstimulating Idea," is at the Foundation for Economic Education website.

Republican presidential contender Ron Paul certainly deserves credit for putting the foreign policy of noninterventionism into the public debate. It’s about time. For decades U.S. presidents have sought to manage the world in behalf of what they call “American interests,” and all it has brought is death, mayhem, anti-Americanism, and a price tag that would blow the average citizen’s mind if he fully grasped it.

Yes, the time for this debate is long overdue. Unfortunately, the quality of the debate on the other side is pathetic.

The rest of my latest op-ed, "Pathetic Arguments for Foreign Intervention," is at The Future of Freedom Foundation website.

Individualism, Collectivism, and Other Murky Labels

Imagine the following person. He believes all individuals should be free to do "anything that's peaceful" and therefore favors private property, free global markets, freedom of contract, civil liberties, and all the related ideas that come under the label "libertarianism" (or liberalism). Obviously he is not a statist. But is he an individualist and a capitalist or a socialist and a collectivist? It sounds like an easy question, but on closer inspection it's not.

The rest of this week's TGIF, "Individualism, Collectivism, and Other Murky Labels," is at the Foundation for Economic Education website.

Cross-posted at Liberty & Power.

Virtue versus Legal Obligation

Michael Gerson, a former speechwriter and policy adviser to President George W. Bush, is the latest in a long line of political writers who fail to see the distinction between a virtue and an enforceable legal obligation. Missing that difference leads to all sorts of mischief and undermines a writer's insistence that he favors liberty. Some people may find it an unpleasant choice, but choose they must: freedom or compulsion? There is no third way.

The rest of my TGIF column, "Virtue versus Legal Obligation," is at the Foundation for Economic Education website.

Naomi Klein: Free-Market Ally?

I haven't read Naomi Klein's book The Shock Treatment: The Rise of Disaster Capitalism (or her other books). But based on what I've read about it, she's probably going to be misunderstood by some libertarians and free-market economists. Although apparently an attack on corporatism (fascism), the book is bound to be seen as a criticism of the free market. I assumed that Klein would promote such understanding by an imprecise use of terms -- and to some extent she apparently does so. But perhaps I've underestimated her. I caught her appearance on Bill Maher's program the other night, and during her interview she explicitly said that practitioners of crony capitalism have hijacked the rhetoric of the free market to advance their self-serving cause. She drew a sharp distinction between the two systems. "[I]t's certainly not the free market. ...Ironically, it's the free-market ideology that gets used to propel this [corporatist] vision forward. It's not free for anybody but the contractors." (The interview is here.)

Her thesis is that crony capitalists use crises to foist their "reforms" on otherwise unwilling people. Sounds like it should be read in conjunction with Robert Higgs's Crisis and Leviathan.

Although Klein is not an advocate of a true free market, she seems to be an ally in struggle against corporatism. We should cultivate that alliance in public statements about her book and reinforce her inchoate view that being for the market is far from the same thing as being for capitalism.

Cross-posted at Liberty & Power.

Atlas Shrugged and the Corporate State

This week marks the 50th anniversary of the publication of Ayn Rand's stunning novel, Atlas Shrugged. So many words have been written about the book that the task of saying something new is daunting. It is a celebration of the creativity that is required for the production of material goods no less than for the production of music, art, and literature. And it is an elaboration of the preconditions for that creativity: individual freedom, which necessarily includes property rights. In sum, Atlas Shrugged is a literary brief for the proposition that human beings can live fully as human beings only in a society founded on the freedom philosophy, i.e., on self-ownership, private property, privacy, consent, free trade, and peace -- in a phrase, laissez faire. What sometimes goes unappreciated by readers of the novel is the extent to which Rand targeted business people as potentially the most egregious saboteurs of freedom.

The rest of this week's TGIF, "Atlas Shrugged and the Corporate State," is at the Foundation for Economic Education website.

The Freeman, October 2007

There is lots of good stuff in this issue, but I particularly want to draw attention to Frank van Dun's article, "Can We Be Free If Reason Is the Slave of the Passions?" (pdf, html). Goodnight, Mr. Hume.

Government Failure

A popular academic rationalization for having government forcibly override people's economic decisions is the theory of market failure. Advocates of the free market have long emphasized that the countless self-regarding actions individuals perform daily in the marketplace generate a larger complex spontaneous, or undesigned, order -- that is, a high degree of interpersonal coordination that is remarkably pleasing to consumers. This is the social cooperation Ludwig von Mises placed at the center of his description of the market process. Critics of the market realize this is a powerfully appealing feature of the economists' case for what these critics deride as the unfettered marketplace. So this feature has been among the prime targets of those who would straitjacket or even abolish the market. Hence the attraction of market-failure theory.

The rest of my TGIF column, "Government Failure," is at the Foundation for Economic Education website.

Libertarianism: Left or Right?

Is libertarianism of the Left or of the Right? We often avoid this question with a resounding “Neither!” Given how these terms are used today, this response is understandable. But it is unsatisfying when viewed historically.

In fact, libertarianism is planted squarely on the Left, as I will try to demonstrate here.

The rest of my article "Libertarianism: Left or Right?" is at The Future of Freedom Foundation website.