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Archive for economics

Jul
31

The Freedom to Move

Posted by: Norman | Comments View Comments

This classic essay was originally written by Oscar Cooley and Paul Poirot, and is excerpted from a pamphlet originally published by FEE in 1951.

Can we hope to explain the blessings of freedom to foreign people while we deny them the freedom to cross our boundaries?

Freedom of movement underlies the concept of private property rights. A person has the right to exclusive possession and use of that which he has assembled and improved without trespass against others—the right to the product of his own labor. Any move of a man might be deemed proper and beneficial when he acts to assemble, transport, or otherwise convert the free gifts of Nature so that they may satisfy human needs more readily. This involves no infringement on the equal right of others. It would seem to be the kind of movement that should not be discouraged by man or by government.

On the other hand, freedom of movement may lead to trespass. A person may move or act in such a way as to threaten the life, or to seize or damage the property, of someone else. His apparent personal gain would be at the direct expense of another person. Surely, government should lend no encouragement to such harmful actions or threats of harm by individuals.

The problem of society, then, is to permit and encourage individuals to move and act in a productive and beneficial manner, and to avoid harmful intervention or trespass. The founding fathers wisely depended upon voluntary exchange—freedom of trade in the competitive market place—as the automatic, non-governmental guide to productivity and progress among men. They delegated to government the power to restrict only those actions of individuals designed to circumvent the free market through fraud, deceit, or coercion. The penalty for violation was restitution for damages, or imprisonment, or some other restraint upon that person’s freedom to act or move.

The freedom of the individual to move toward greener pastures, wherever they may seem to be, has been a vital part of the freedom of commerce—the freedom of choice that has constituted the truly distinctive characteristic of “the American way.”

In view of our long experience of near-perfect freedom to move about as each might choose, some of us may not realize the limitations that confront people in many other parts of the world who might like to move toward something better. Many who might choose to enter the United States, peacefully observing our laws and paying their own way, are denied entry. Our community slogans now seem to read: “Welcome to all peaceful and productive newcomers—except foreigners.” And a foreigner here is an individual who has crossed a special political line, supposedly which bounds “the land of the free”!

If it is sound to erect a barrier along our national boundary lines, against those who see greater opportunities here than in their native lands, why should we not erect similar barriers between states and localities within our nation? Why should a low-paid worker—“obviously ignorant, and probably a Socialist”—be allowed to migrate from a failing buggy shop in Massachusetts to the expanding automobile shops of Detroit? According to the common attitude toward immigrants, he would compete with native Detroiters for food and clothing and housing. He might be willing to work for less than the prevailing wage rate in Detroit, “upsetting the labor market” there. His wife and children might “contaminate” the local sewing circles and playgrounds with foreign ways and ideas. Anyhow, he was a native of Massachusetts, and therefore that state should bear the full “responsibility for his welfare.”

Those are matters we might ponder, but our honest answer to all of them is reflected in our actions—we’d rather ride in automobiles than in buggies. It would be foolish to try to buy an automobile or anything else in the free market, and at the same time deny any individual an opportunity to help produce those things we want.

Our domestic relationships would be harmed seriously by restraints upon man’s freedom to migrate. But why shouldn’t the same reasoning hold for our foreign relationships?

Fear No. 1: The “melting pot” might fail to assimilate newcomers. This notion has as little merit as the idea that a third-generation Yankee’s digestive tract isn’t capable of assimilating a bunch of carrots grown by a foreign-born Japanese or Italian vegetable gardener. The assimilation of a foreign-born person is accomplished when the immigrant willingly comes to America, paying his own way not only to get here but also after he arrives, and peacefully submitting to the laws and customs of his newly adopted country. Freedom to exchange goods and services voluntarily in the market place is the economic catalyst of the American “melting pot.” Christian-like morality is the social catalyst—and if it has come to be in short supply among native Americans, the blame for that shortage should not be laid upon our immigrants.

Fear No. 2: The “wrong kind” of people might come to America. The danger that “a poorer class” might come from Asia or Africa or Southern and Eastern Europe and contaminate our society, undoubtedly seems real to any person who thinks of himself as a member of a superior class or race. Such a person, like any good disciple of Marx, is assuming the existence of classes and is convinced that he is qualified to judge others and to sort them into these classes.

Perhaps what is feared is the importation of a new idea of the relationship between the individual and his government. If that has been our fear, it very well might have been justified. For America has been rapidly substituting a socialistic State control for the traditional system of private enterprise. But let us not mistake persons for ideas; the ideas are the root of the problem. Migration of persons is not a reliable measure of the flow of ideas.

Fear No. 3: Immigrants might deprive our own workers of jobs and depress the wage scale. The fear that immigrants might take the jobs of American workers is based on the fantasy that the number of jobs to be filled within our economy is strictly limited. Individuals still do—and undoubtedly always will—entertain unsatisfied desires for more and more goods and services, which industrious and ingenious individuals constantly are producing in response to opportunities. If there is freedom to think, to trade, and to move, then opportunities for new, creative jobs are not limited to the wilderness or a spot of idle land.

The fear that heavy immigration of workers would depress the wages of native workers is an outgrowth of socialist doctrine. Socialism is so concerned with consumption and “equitable distribution” that it neglects the source of production. It fails to recognize that there can be more and more to consume only if capital and tools are first produced to give leverage to the productive power of man.

Can we hope to explain the blessings of freedom to foreign people while we deny them the freedom to cross our boundaries? To advertise America as the “land of the free,” and to pose as the world champion of freedom in the contest with communism, is hypocritical, if at the same time we deny the freedom of immigration as well as the freedom of trade. And we may be sure that our neighbors overseas are not blind to this hypocrisy.

A community operating on the competitive basis of the free market will welcome any willing newcomer for his potential productivity, whether he brings capital goods or merely a willingness to work. Capital and labor then attract each other, in a kind of growth that spells healthy progress and prosperity in that community. That principle seems to be well recognized and accepted by those who support the activities of a local chamber of commerce. Why do we not dare risk the same attitude as applied to national immigration policy?

Our collective abandonment of the economic system of the free market leaves for us the controlled communal life, where everyone wants to be a consumer without producing anything.

The Basic Problem

Our immigration policy merely reflects the existence of this serious internal problem in America. Our present policy toward immigrants is consistent with the rest of the controls

over persons which inevitably go with national socialism. But the controlled human relationships within the “welfare state” are not consistent with freedom. Great Britain once thought she could deny freedom to American colonists. And now, her own people have traded their freedom for nationalized austerity. Even a “prosperous” modern America can ill afford traveling that same course. If we do, our community, too, will lose its capacity to attract newcomers. Then we wouldn’t need an immigration policy. But who among us would want to remain in a community where opportunities no longer exist?

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Jul
26

New Copyright Rules Released

Posted by: Norman | Comments View Comments

Intellectual property, especially copyright and patents, is purely fictitious, a construction of the State. Stephan Kinsella has definitively proved such in his paper Against Intellectual Property.

Nevertheless, the US government continues to prop up this inefficient and unethical practice. Under the Digital Millennium Copyright Act, many lives have been ruined by the bad side of corps, full of lawyers hunting for cash. We all know of the old ladies and teenagers who receive verdicts requiring them to pay obscene amounts of money for such non-crimes.

Well, some new rules coming straight from the Library of Congress are sure to help alleviate a few of these problems. Essentially, the Librarian of Congress must evaluate exemptions to the DMCA every 3 years, i.e. you cannot be prosecuted, period, if you do these things. Previously, there had only been one exemption recognized. Now, there are SIX exemptions, and the first three are quite significant.

The basics of each exemption:
1) You can rip your own DVDs. You can remix scenes for noncommercial use. So all those Hitler-plus-caption remixes from the movie Downfall no longer can be taken down. Teachers who want to use a movie in a class can rip it. No one from the DMCA can touch you.
2) You can jailbreak your phone, nobody can prosecute you. Big swipe at Apple/AT&T.
3) You can use software to unlock your phone for use on a different network.
4) You can use software to crack game SecuROMs or other game DRM for the purpose of “investigation” or research. The language is very broad, since even curiosity can prompt “investigation.”
5) You can use cracks to bypass a hardware dongle. This is significant for people like me who use lab equipment or any variety of peripherals with stupid dongles.
6) You can crack DRM encrypted ebooks to use text-to-speech capabilities. Convenient.

Gizmodo has a more thorough analysis here.

These new rules surely do not go far enough, but thankfully things are not becoming more restrictive in this arena. But we need to continue pushing back, so keep spreading the word!

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Great news, folks. The good people at the Ludwig von Mises Institute have released version 2.0 of their media and book “torrents,” which is simply the easiest way to obtain the entire Mises online library. (Click here for a brief intro to torrents.)

What is particularly awesome about LVMI in this regard is that they understand that material like this doesn’t have to be protected by the strong arm of the state through aggressive copyright law. Instead, they just completely circumvent it. All of it is provided at the grand old price of $0.00. How awesome is that? To have an entire library of knowledge at your fingertips for the cost of a few gigabytes of bandwidth.

And besides being an absolutely heroic gesture, it even benefits LVMI monetarily as well. Ever since LVMI started giving away everything in electronic PDF form for free, their book sales have skyrocketed – because it turns out many people (like me) continue to want hard copies in addition to the electronic editions.

Huzzah to the great Ludwig von Mises Institute!

Here’s the text of their blog post with the appropriate links:

———————

Mises Torrents 2.0 Available

June 15, 2010 by David Veksler

It’s been about a year early since the first public release of torrents containing all the document and media content on Mises.org. The Mises Institute staff adds new content frequently, so it is time for version 2.0.  Here are the 2010 torrents: Mises Media (132 GB), Books (8.6GB), Journals (4.1 GB), PDFs (324 MB), and ReasonPapers (1.4 GB).

For more files and details see the original announcement.  If you are new to BitTorrent, install the uTorrent client, open the links above, and you’ll be on your way.

If you downloaded an earlier version of this content, please do not re-download everything.  In both uTorrent and Vuze, you can get just the missing files.  In uTorrent,  start the download and let it create the placeholder directory, then stop it.  Overwrite the placeholder directory with your existing files, then “Force Re-Check.”  You can do the same in Vuze –  just enable the option to “Truncate existing files that are too large” under Options->Files.  Then resume.

By my best calculations, we seeded last year’s torrents to thousands of computers worldwide and served over 4 terabytes from our servers alone.  Please help us spread the word and make this release even bigger.

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Jun
05

Tax Slavery Sucks

Posted by: Norman | Comments View Comments

This article is #19 of a weekly series highlighting the former memes of Bureaucrash, an organization once headed by my friends Pete Eyre and Jason Talley of the Motorhome Diaries. The memes were originally authored by Pete Eyre and Anja Hartleb-Parson, and were intended as means of communicating ideas about liberty in catchy and succinct ways.

image According to the Tax Foundation, Americans will spend about 30 percent of their income on taxes in 2008. For comparison, in 1900, it was around 6 percent. Put differently, for almost four months out of the year you work just to pay for government. In the current system most types of income are taxed, sometimes twice, and often progressively. These are just some of the taxes levied by government: federal and local income tax, sales tax, property tax, gasoline tax, cigarette tax, liquor tax, vehicle sales tax, utility tax, marriage license tax, inheritance tax, and capital gains tax, etc. On top of that, you pay to compensate for taxes levied on others. For instance, you, as a consumer, pay higher prices for goods and services because of the corporate income tax levied on businesses. The government, if it is to exist, should protect people from force and fraud. Therefore, at most, government should tax only to maintain a national defense, a police force and law courts. But instead, legislators seek to fulfill the so-called “needs” of the constituencies and special interest groups that put and keep them in office. So, the government has tasked itself with providing cheaper prescription drugs for seniors, improving education for children, supporting for farmers by keeping food prices high and paying them for any product they fail to sell, covering the living expenses of the poor, paying for medical research, and so on. The result is not a system that protects our individual rights but a system that provides benefits to some at the expense of others. Typically there will be concentrated benefits and dispersed costs, which makes organizing resistance difficult and leads to even larger government interference.

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May
22

Stop Rent-seeking

Posted by: Norman | Comments View Comments

This article is #17 of a weekly series highlighting the former memes of Bureaucrash, an organization once headed by my friends Pete Eyre and Jason Talley of the Motorhome Diaries. The memes were originally authored by Pete Eyre and Anja Hartleb-Parson, and were intended as means of communicating ideas about liberty in catchy and succinct ways.

Rent-seeking refers to the behavior of individuals or groups expending resources to achieve public policy decisions that transfer wealth to them at the expense of others. Some examples:

  • A nonprofit organization might seek for the government to spend taxpayer money on their pet cause, such as protecting the environment or researching a disease.
  • A workers’ union might want the government to force employers to provide higher wages, more benefits and greater job security.
  • A corporation might seek subsidization to support an unsustainable business model instead of working to become more profitable.

While the rent-seekers should be faulted for the behavior, it is the government granting rent-seekers what they want that is the real problem. As it shells out more benefits and privileges, government has to collect more taxes to administer and pay for them, thus vastly increasing its size and scope.

Rent-seeking is theft. A rent-seeker wants to achieve a wealth transfer in his favor without having to provide value in return. In a mixed economy, companies and organizations find it more effective to petition the government for protection (i.e. subsidies, tariffs, entry barriers, regulations, etc.) than to compete by providing goods and services that consumers want to pay for. Since in a free market the choices of other individuals might not go in his favor, the rent-seeker would rather have the government initiate force against those individuals. The free market, on the other hand, is predicated upon and respects individuals’ free choices. Rent-seekers hinder the dynamism of the free market. When you and I trade in the free market, we each give the other something the other wants more than we want it, relative to what we receive in exchange. By contrast, when the government initiates force in favor of a rent-seeker, it makes everybody but the rent-seeker worse off. It leaves the rent-seeker’s competitors worse off, because the rent-seeker now has a government-enforced advantage, whether in the form of a government-approved monopoly, or stifling regulations faced by would-be entrepreneurs. Because market forces and signals are hindered and distorted, this leaves consumers worse off. They are forced to pay higher prices for poorer quality goods and services.

Rent-seeking harms economic growth. Instead of companies investing their money in new technology, new jobs, offering consumers better products and better prices, or increasing their employees’ pay, the money ends up in the pockets of lobbyists and the politicians able to grant favors. Consumers are forced to pay more for goods and services and taxpayers have to foot the bill for the rent-seekers’ government-enforced advantage. So, over time, as government arbitrarily favors one group over another and expands in size in order to pay for rents, rent-seeking erodes the mechanisms that make economic growth and wealth creation possible: the impartial rule of law, limited government and individual rights.

Statists, whether out of distrust of individuals or faith in the ability of the government, prefer that the state controls people instead of people controlling themselves; they opt for government intervention rather than individual liberty. Statist policies can include regulation of the economy, provision of social goods, and control over personal behaviors. Many political ideologies can be subsumed under the label “statist” — communism, fascism, authoritarianism, totalitarianism. Even a democracy can become statist if it does not create or does not follow constitutional safeguards against the majority imposing its will without regard for the individual rights of the minority.

Statism is anti-liberty. Individuals have property in themselves, also called self-ownership, which entails they should be free to control their bodies, their minds and their lives. The only way to interfere with that freedom is by means of physical force. The job of governments is to defend individual rights by protecting individuals against the initiation of physical force. However, when governments institute statist policies, they initiate force against individuals who are not infringing on the liberty of others and thus violate individual rights. For instance, regulations, tariffs and subsidies for businesses violate the rights of entrepreneurs and consumers, who both are prevented from voluntarily determining the terms of their interactions with others. If I choose to not give my money to a certain business, government has no authority to overrule that decision. It violates my freedom of choice and deprives others of the property they would have gained in the absence of government interference. Immigration restrictions violate the rights of individuals, since they are prevented from peacefully living and working where they choose to. Bans on smoking and the use of other drugs, speed limits and seat belt requirements, and laws preventing the sale of organs violate your rights since you are prevented from making decisions about your own body.

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