"Free" College Won't Improve Education

"Free" College Won't Improve Education

05/17/2019Paul Boyce

You're a twenty-something student and have recently graduated. You're excited to go and take on the world. However, you owe over $50,000. All you wanted to do is gain an education. This massive debt now looms over you. How can the world be so unfair? Why shouldn't this education be free like the other forms are? Shouldn't education be a right? Step in, Democratic Presidential nominee, Elizabeth Warren. She recently set out her plan to cancel student debt and abolish tuition fees. Her plan offers free tuition, as well as eliminating existing debt of up to $50,000. Each household with income below $100,000 would have up to $50,000 of debt wiped out.

What's There Not To Like?

Surely free higher-education, is beneficial to society as a whole? If smarter people are coming out of colleges, greater value will be created in the economy. The trouble with this is that far too many degrees are not aligned to market demand. Religious Studies may be of interest to the student, but there aren’t many businesses or jobs that require such degrees. There is a case for creating a well-educated workforce, but this has turned into educating for educating's sake.

The System Is Not Aligned With The Market

Too many students are coming out of the educational system and not utilising their degree. Whilst unemployment rates are low among graduates, many find themselves in jobs that don't require a degree. From Starbucks baristas to Wal-Mart assistants — many now have a degree.

Some majors are more prone to underemployment than others. Performing arts graduates for example have an underemployment rate of 65.7% . Graduates in Leisure and Hospitality don't favour much better, with an underemployment rate of 63%. By contrast, engineering and educational graduates score favourably on underemployment measures. The difference is that there is demand for engineers and educators, but not so much for performing arts.

There is a clear disconnect between the market and the educational system. Whilst the market demands graduates in science and engineering, the educational system provides graduates in arts and media.

"Free" College Wont Re-align The Market

Making college education free is not going to resolve the disconnect between the market and colleges. If college education is free, there is no downside of coming out underemployed. The risk associated is almost eradicated. One of the crucial parts of college education is determining whether it's of value. It's an investment. An investment that future earnings will be enhanced as a result. Will the enhanced earnings be worth more than the $50,000+ spent on education? By removing the cost, Warren's proposal changes the incentives. The cost-benefit is changed. There is a significant benefit, but little cost. This incentivises greater participation. When the price of any good is removed, the demand for it will increase. College will be no exception.

More students going to college may seem like a good thing. However, what will they be going to study and what value will that degree have? Based on existing statistics, many will continue to come out underemployed. If we are educating millions of individuals that are not utilising that education, resources are wasted. Those same resources could be used to invest in capital equipment and increase productivity.

The Mess that Is American Public Secondary and Primary Education

Elizabeth Warren justifies her plan as part of an effort to help racial and ethnic minorities get into college. However, given how little government schools at the primary and secondary levels do for students who are low-income or non-white, it’s hard to have confidence in just another government education scheme. After all, at lower levels of public education, instruction and outcomes are notoriously poor for just the sorts of students Warren says she can help. What reason do we have to believe that universal government education at the college level will finally get it right?

If Warren wants to expand college access, she’s be more worried about ensuring schools provide the skills necessary to enter and thrive at higher education institutions. Right now, that simply isn’t happening.

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Why Attacking Big Business Is Back In Vogue

06/12/2019Tom Chanter

"Progressive" politicians like Bernie Sanders, Alexandria Ocasio-Cortez, and Elizabeth Warren are becoming more fashionable, and it follows that attacking big business is back in vogue. “Political and academic progressives expand their frenzied attacks on ‘wealth’ and on the alleged transgressions of ‘big business,’” writes Dominick Armentano, Professor Emeritus in Economics at the University of Hartford.

What is it about human nature that drives these attacks? Perhaps we must look to Ludwig Von Mises for an answer. But first, we can get a general idea of how the anti-big-business impulse remains so popular by looking at the work of economist Tyler Cowen.

In April, Cowen published his latest book, Big Business: A Love Letter to an American Anti-Hero, documenting how “Most young Americans hold highly critical perspectives on capitalism.” Indeed, the Harvard Kennedy School produced a report on young adults, revealing 51 percent did not support capitalism. Furthermore, 33 percent endorsed socialism as an alternative.

Clearly, that 33 percent is ignorant to the Two Reasons Why Socialism Repeatedly Fails;

1) the impossibility of economic calculation without true market prices, and

2) the lack of an incentive to produce only what consumers actually want.

Nevertheless, support for socialism endures, and we don’t have to look further than our TV screens and Twitter to observe what may be the one of the key points of origin of this critical narrative against big business. Yet this negativity is driven by more than radical rhetoric from the left-wing media. The very nature of media coverage has an effect.

Cowen adds, “Virtually all media outlets have a significant bias toward negative news of all kinds, including news about business. So scandals, corruption, and abuse of workers all receive much more publicity than the normal, everyday massive successes of America’s major corporations. “Corporations had another stellar day producing things and keeping people employed,” just isn’t a great news headline.”

Furthermore, big business is blamed for the failings of big government. We need look no further than the Occupy Wall Street movement. As the angry masses protested on Wall Street, a more appropriate place to fight for freedom was a short walk away: three blocks north of Wall Street at 33 Liberty Street sits a brownstone building — the home of the Federal Reserve.

Yet, there was little interest in addressing the outsized role of the Federal Reserve in manipulating the global economy. This blind spot for the role of the central bank illustrates just how wrongheaded are many leftwing approaches to diagnosing the source of our economic problems. 

Protestors would do well to consult Austrian Business Cycle Theory which helps explain how the stock market crash and economic downturn were attributable not to "big business," but largely to a prior bank credit expansion by the Federal Reserve and the Fed-regulated banking sector.

Yet, anti-capitalist agitprop spreads through social-media like typhus through the Gulags, even though it is private capital and private business which has made social media possible.

This sort of thing is nothing new. As Ludwig Von Mises wrote, “All people, however fanatical they may be in their zeal to disparage and to fight capitalism, implicitly pay homage to it by passionately clamoring for the products it turns out.”

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The War Crimes That Don't Get Punished

06/12/2019Ron Paul

Rep. Duncan Hunter (R-CA) found himself in hot water recently over comments he made in defense of Navy SEAL Edward Gallagher, who faces war crimes charges over his alleged conduct while serving in combat overseas. Gallagher is charged with stabbing a 15 year old ISIS member while in custody, of taking photos posing with the corpse of the teen, and with killing several civilians.

Defending Gallagher recently, Hunter put his own record up next to the SEAL to suggest that he’s an elected Congressman who has done worse things in battle than Gallagher.

That’s where Hunter’s defense earned him some perhaps unwanted attention. While participating in the first “Battle of Fallujah” in early 2007, by Hunter’s own account he and his fellow soldiers killed hundreds of innocent civilians, including women and children. They fired mortars into the city and killed at random.

In the sanitized world of US mainstream media reporting on US wars overseas, we do not hear about non-combatants being killed by Americans. How many times has there been any reporting on the birth defects that Iraqis continue to suffer in the aftermath of US attacks with horrific weapons like depleted uranium and white phosphorus?

Rep. Hunter described his philosophy when fighting in Iraq:

“You go in fast and hard, you kill people, you hit them in the face and then you get out…We’re going to hurt you and then we’re going to leave. And if you want to be nice to America, we’ll be nice to you. If you don’t want to be nice to us, we’re going to slap you again.”

This shows how much Duncan Hunter does not understand about war. When he speaks of hitting people in the face until they are nice to America, he doesn’t seem to realize that the people of Fallujah – and all of Iraq – never did a thing to the US to deserve that hit in the face. The war was launched on the basis of lies and cooked-up intelligence by many of the people who are serving in the current Administration.

And that brings us to the real war criminals. Rep. Duncan Hunter and his fellow soldiers may have killed hundreds of innocent civilians and even felt justified. Their superior officers, after all, established the rules of engagement. Above those superior officers, going up and beyond to the policymakers, the lie was sold to the American people to justify a war of choice against a country that could not have threatened us if it wanted to.

Vice President Dick Cheney knew what he was doing when he kept returning to the CIA headquarters, strong-arming analysts to make the intelligence fit the chosen policy. John Bolton and the other neocons knew what they were doing when they made claims about Iraq’s weapons of mass destruction they knew were false. The Pentagon’s Office of Special Plans played its role in selling the lie. So did the media.

Edward Gallagher will face trial and possibly jail for his actions. Rep. Duncan Hunter may even face punishment – though perhaps only at the ballot box – for his admitted crimes. But until those at the top who continue to lie and manipulate us into war for their own gain face justice, the real criminals will continue to go free and we will continue pursuing a suicidal neocon foreign policy.

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Judy Shelton's Remarkable Attack on the Fed

06/11/2019Jeff Deist

Judy Shelton's recent interview with the Financial Times is nothing short of remarkable. Her comments represent the most substantive attack on the Fed, and central banking generally, by any potential nominee to the Fed board in recent history. She not only challenges how Jerome Powell and Fed officials conduct monetary policy, but whether they can conduct it competently at all.  

Consider this salvo against the Fed's inescapable role as central planner:

How can a dozen, slightly less than a dozen, people meeting eight times a year, decide what the cost of capital should be versus some kind of organically, market supply determined rate? The Fed is not omniscient. They don’t know what the right rate should be. How could anyone?” Ms Shelton said. “If the success of capitalism depends on someone being smart enough to know what the rate should be on everything . . . we’re doomed. We might as well resurrect Gosplan,” she said, referring to the state committee that ran the Soviet Union’s planned economy.

And her attack on the Fed's outsized role in the economy:

She also said that the Fed should continue to reduce its balance sheet below the $3.5tn target set by Jay Powell, the chairman. “I would rather the Fed be less of an entity. When a central bank buys up government debt, that’s the beginning of compromised finances.”

She also recognizes malinvestment:

“It’s the distorting aspect of the Fed that is the worst aspect — it’s a wag-the-dog situation. People are fixated on the Fed and are making money by arbitraging, trillions of a second after the latest FOMC announcement,” she added.

And she isn't afraid to support a role for gold in monetary policy:

Ms Shelton has long been sympathetic to the gold standard, which the US fully abandoned in the early 1970s in favour of a flexible exchange rate for the dollar. “People call me a goldbug, and I think, well, what does that make them? A Fed bug,” she says.

"Fed Bugs"! Why didn't we think of this?

Shelton, who works as an economic adviser to Trump, is not an economist by training. Her PhD in business administration, from Utah State no less, is sure to draw jeers from the Ivy League central bank crowd. But it's Ivy League economists, after all, who created the last crisis in 2008. And needless to say they're sounding alarm bells about Mrs. Shelton. The worst offender is former Treasury official Larry Summers, who shamelessly calls Shelton "dangerous." 

Sorry, but a financial terrorist and chief architect of the weaponized derivatives market in the 2000s should have the simple decency to keep quiet and thank his lucky stars he's not in jail. 

Judy Shelton is not an Austrian. She appears mostly aligned with the supply-side camp of her longtime friend and mentor Larry Kudlow, who heads the Trump administration's (useless) National Economic Council. And her support for a modified gold standard rests on shaky ground, as she unfortunately favors a rules-based approach under which the Fed would target a dollar price for gold—what Joe Salerno refers to as "price-rule monetarism." 

So Shelton doesn't want to End the Fed. But in the parlance of woke America, she's an "ally." Recognizing the limits of central bank omniscience, and challenging its benevolence, are important first steps on the road to redeeming our money and our economy.   

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The Fed Has Lost Control

06/11/2019Doug French

The gold price shot up $50 in the last 30 days during a time of the year when the yellow metal typically lays down to begin its summer nap. At the same time, Bitcoin’s price has rose from its slumber. What’s up? Luke Gromen, founder of Forest for the Trees LLC , a macro/thematic research firm catering to institutions and individuals may have put his finger on it during his interview with Ed Harrison on Real Vision .

Gromen points out that something happened in the 4th quarter of last year and on March 20th of this year. Alarm bells have gone off at the Fed because for the first time in 70 years, government deficits matter. According to Gromen,

With Fed Funds went over interest on excess reserves, that was a sign that the United States government's deficits were getting so big and foreigners' interest in treasury bonds, because FX had yields, were so negative, though the interest from foreign private sector investors was so low, that we are crowding out our own banking system. And so, if the Fed does not inject a significant amount of dollar liquidity soon- be that via repo, be that via rate cuts, and I think you're going to be seeing QE probably in six to nine months at the latest.

From October through April , Uncle Sam’s outflow exceeded his inflow by $531 billion or 38% more than a year ago. Foreign central banks used to buy up US Treasuries like there is no tomorrow, but now, not so much. Late last year,

the hedging costs for foreign investors to buy US Treasuries went negative. In other words, for a Japanese or German private sector investor- and again, the US government's now critically reliant on foreign private sector investors to buy Treasuries, the yield FX hedged turn negative.

Last year the U.S. government issued $10 trillion worth of Treasuries, 70 percent of which have less than one-year maturities. This year it’ll be $11.5 trillion, again with 70 per cent maturing in less than 12 months.

The upshot of all this is

the Fed is losing control of [the] Fed Funds Rate at the short end because US deficits are growing as fast as they are. And because foreign official sector is not buying really at all on net. The foreign private sector is not buying enough, they are buying some unhedged but not nearly enough relative to the size of the deficits we're running.

The price of money is the Fed’s business and the gang at the Eccles Building has lost its grip according to Gromen, who believes, Powell has no choice but “to cede control over the quantity of money in order to control the price of money.”

A year ago, it was tighten, tighten, tighten, now three rate cuts are expected by the market by year-end. Gromen told Harrison that Trump’s tariffs matter some, but, it’s the deficits that really matter and are forcing the Fed’s hand.

And so, ultimately, what that suggests is that any rate cut you have because, again, the reason why all this is happening is US deficits are big and growing and structural. And they're crowding out the US private sector. And so, basically, the primary dealer of last resort, I think I saw someone say, or call it, the Fed is going to have to start bidding for these bonds again. So, I think it depends a lot on messaging on July- we were talking before, if they don't do what's expected, it's not going to be good for risk. But ultimately, they're going to have to unless they don't want to exist anymore.

We can be sure Chairman Powell will not want the Fed to vanish under his watch. He’ll be printing and bidding (for Treasuries). QE will return, along with a growing Fed balance sheet.

So what’s a person to do? Gromen sees more asset price inflation on the way and it will accelerate. In particular, he likes gold, both the barbaric version, and the electronic version, Bitcoin.

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Prices and Entrepreneurial Decision Making

Value is subjective. Prices are objective. Subjective value comes from the mind of the consumer, and influences market prices. When an actor chooses, he must forgo other choices, and he is demonstrating a preference for something, revealing part of the rankings of his values. Since perceived value relative to the actor’s value scale influences prices, then all prices are a result of human actions and choices on the market, caused by the actors' values. Tracing back price changes to human actions on the market is part of what an entrepreneur must do in order to understand the market better. Value travels up the structure of production, from the consumer goods to the producer goods. Tracing the implications of prices changes is part of what an entrepreneur does to understand his market.

Hayek calls prices signals. They are signals that are generated by the market through the market process, which is the interaction between buyers and sellers through their transactions with each other (supply and demand). These signals, in the form of prices and their changes, inform entrepreneurs about what's going on, and guide their actions, and this coordination mechanism is scalable and connects everyone. The market and its prices are all that are needed to coordinate a vast number of people's actions with precision. The entrepreneur doesn't need statistics to make a decision on what to invest in. An entrepreneur that doesn't understand this system is missing out on what's really going on and would be at a disadvantage. Austrian Economics with its deductive method, reveals to us the workings of this price mechanism through its theories and its methodology.

Rothbard said in a lecture (paraphrasing), "An entrepreneur knows more about his specific market than any economist or expert. The reason is that he has skin in the game. A lousy entrepreneur would quickly be eliminated from the market. There is a self-selecting process. The economist or expert has no skin in the game and isn't risking anything when he's wrong about the market." The key insight here is that the entrepreneur knows more than any expert about his specific market and its actors. The entrepreneur gets his information from multiple sources, and forms an outlook on what will happen. The entrepreneur may talk to suppliers, customers, friends, he may hear rumors, read news, from these he would construct a narrative, on top of this can use prices, changes in prices and check it against economic theory to see what's true. From all of this the entrepreneur forms his understanding. This understanding plus other things like intuition, gut feeling, that help the entrepreneur form judgments about the future and judge the best course of action in the present. The entrepreneur has to filter out of the noise what information is the most significant, the factors that will influence the future the most.

In understanding prices and tracing the causes of their changes, an entrepreneur can understand his market better. Prices can inform an entrepreneur about what's happening before journalists and news outlets catch on to it. Prices contain within them information, they are the final outcome of a process of buying and selling by many actors, prices are a kind of average of what all the actors think the price should be. Each good has its own price behavior, which is influenced by the good's physical properties, and other properties such as scarcity, it's perceived value, and finally fluctuations in supply and demand, and the behavior of buyers and sellers. Austrian Economics gives the entrepreneur a correct theory that can help the entrepreneur narrow down on what's happening in the market and gain superior understanding of his market. Knowledge of economics can't guarantee success, but it can bring increased awareness of what's going on underneath the numbers and prices. Eventually helping the entrepreneur gain a better understanding of the market, which means the values of the consumers and the actions of the other actors in the market.

Mises says, "The only source from which an entrepreneur’s profits stem is his ability to anticipate better than other people the future demand of the consumers.” Correctly anticipating the actions of market actors and anticipating future prices and preparing for that future state is what generates entrepreneurial profit.

Mises says, "Monetary calculation is the guiding star of action under the social system of division of labor. It is the compass of the man embarking upon production." Prices determine costs, and not the other way around. Prices are determined in the market. All internal costs should be benchmarked to the market prices in order to have the most accurate cost calculation. Monetary calculation includes retrospective accounting of profit and loss, and prospective accounting with its anticipated costs and anticipated profits. If prices change in the market then not only do the present and future look different, but also the past accounts of profit and loss look different. What worked at one time in the past under the cost structure of that time may not work again with current prices. Accounts give a feeling of certainty in their numbers, but they are static. They are an oversimplified static representation of an inherently dynamic phenomenon.

Austrian Economics can help an entrepreneur have a deeper understanding of his market and of accounting. This can help the entrepreneur in making better decisions out of this better understanding. Here we narrowly focus on prices and costs, but there are many other areas of Austrian Economics that are applicable and will be covered in future articles.

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Blue Laws Won’t Fill America’s Churches Again

06/10/2019Zachary Yost

In the age of Trump, many American conservatives are adopting populist positions. Policies that were once considered the right-wing status quo are being questioned and assailed, particularly when it comes to capitalism and markets.

Fox News personality Tucker Carlson is often on the front lines of this iconoclasm, with his regular diatribes against unfettered capitalism and financial elites. His voice is that of a growing traditionalist movement that has begun to vocalize their idealistic challenges to basic capitalist principles. These traditionalists want a larger role for religion in the public square. Unfortunately, they want the state to help facilitate this, and in seeking government’s help, they’re shooting themselves in the foot.

Recently, a great many traditionalists were up in arms over North Dakota’s repeal of its blue laws, which prohibited retail businesses from operating before noon on Sundays. Blue laws were once in place across the country and increasingly have been rolled back. Usually they take the form of bans on alcohol and retail sales, hunting, and certain other recreations.

In response to North Dakota’s repeal, Father Dominic Bouck, a Catholic priest in Bismarck, argued in First Things that the move will hurt the poor and even make the siren song of socialism more palatable to the tired and restless masses.

Without blue laws, Bouck contends that many workers “conscripted into hourly wage jobs” will be denied the ability to attend mass and enjoy holidays with their families. In Bouck’s words, “the legal protection of Sunday rest helps the individual worker and preserves the family from the arms race that is our consumer society.” He also cautions that the decline of blue laws has helped facilitate the rise of our hyper-consumerist culture and the tendency to view man as “the sum of his production and consumption.”

Bouck is onto something here. However, blue laws aren’t going to address his concerns.

Rest from work is crucial, and a person’s worth doesn’t stem from his ability to be a cog in the retail machine. This lack of regularized rest has doubtless contributed to the current increases in anxiety and depression. In 1843 Magazine, psychoanalyst Josh Cohen notes that “anxieties about burnout seem to be everywhere these days.” Coupled with this problem is a lack of togetherness and fellowship. Whereas Sundays have traditionally provided opportunities for families and friends to spend time together, Cigna reports that there’s currently an epidemic of loneliness in the United States.

There can be no doubt that most people would benefit from taking Sundays slowly and spending time with their friends, family, and God. However, reinstating blue laws won’t solve the problem. It’s completely off-base to attribute the dramatic decline in American churchgoing to the lack of legal prohibitions on Sunday work. According to Gallup, weekly religious attendance has been going down since the 1950s.

Ask a young person why he didn’t go to church last Sunday, and I doubt he’ll offer a work shift as the reason. More likely, you’ll hear that church isn’t relevant to his life.

As sociologist Robert Nisbet noted in his classic work The Quest for Community, the relevance of a social institution depends on its maintaining a function and fulfilling the needs of its members. As the centralized state has usurped more and more of the traditional functions of important mediating institutions such as the church and family, the relevance of those institutions has waned. Relying on the same state to rejuvenate church attendance would only further religion down the path of irrelevance and decay.

In his essay “The Balance of Power in Society,” sociologist Frank Tannenbaum discussed the importance of maintaining a balance in society between the various institutions that comprise it: the family, the church, the state, and the market. According to Tannenbaum, these institutions are frequently in conflict and constantly trying to encroach upon the territory of the others. This push and pull is natural, Tannenbaum says, and even healthy when it results in societal balance. Unfortunately, when one institution gains too much power, the result is usually chaos and disorder.

There’s no doubt that our society is woefully out of balance. Family and church are deprioritized in favor of the market and job concerns, and all three are dominated by the powerful centralized state. Many in our Western world see their primary value in their jobs to the neglect of other aspects of their lives. It’s this imbalance that traditionalists are getting at with their call for more blue laws. But legislation is a poor method of restoring balance and order to society because it fails to address the underlying issue: the values that motivate people’s actions.

In the long run, consumers determine the shape of the market, a concept known as consumer-sovereignty. As I’ve argued previously, it’s inaccurate to say that markets are responsible for the decay of community and family. Markets are merely a mirror of people’s values. Employers can’t actually force or “conscript” others into working for them, Father Bouck’s hyperbole notwithstanding. Although man must eat “by the sweat of his brow,” that does not mean he must let the world determine in what manner he will sweat. Employers only have as much power as their employees give them. It may be uncomfortable and inconvenient to resist, but no one is forced to worship mammon.

Blue laws are merely an attempt to make the already very low barriers to church attendance even lower—to match the low value people ascribe to it. That isn’t going to fix anything. Early Christians were martyred and fed to the Roman lions because they valued their beliefs even more than their lives, much like the merchant seeking the pearl of great price. Have contemporary Christians really fallen so far that they’re unable to organize their economic lives so they too can worship?

Republished with permission of the author
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Economics 101: More Wealth Means Less Poverty

06/10/2019Per Bylund

Tweeting about poverty and wealth1 is quite instructive. It's obvious that many feel very strongly about it yet know so little.

Consider what wealth is: it is to have the means to satisfy wants. Those means can be anything, including berries or fruits growing in the wild. But the vast majority of means are created. There are no hamburgers, iPhones, or houses growing on trees.

In other words, most means to satisfy wants were created. So wealth, generally speaking, is created.

Many appear confused by this rather obvious fact, or take offense by it being stated.

That is not only ignorant, but counter-productive: whoever does not believe that the means to satisfy wants (wealth) are created surely is not acting to create them. So we are missing out on a lot of wealth because of this ignorant view; our standard of living could be higher.

It should also be obvious that the creation of one means does not makes anyone poorer or, as some claim, that the creation of any means to satisfy a want "creates poverty."

Imagine two people living without any created means to satisfy wants: they are naked and without any wealth other than the occasional berry or fruit provided by nature. If Person One spends her day creating a shelter, this provides a means to satisfy a want. She is thus richer. Does that make Person Two poorer? No. That person's situation has not changed. If anything, there is now a shelter that could potentially be shared, and the knowledge of how to create one is now available. So if anything, Person Two is (slightly) richer too.

Sure, there is now inequality because person one has a shelter and person two does not. You may have the opinion that Person One must share this wealth or think it is okay for Person Two to use force to take that shelter away from Person One. But neither changes the fact that this wealth – the shelter – was created and that, as a result, there is now more wealth in the world.

More wealth means less poverty.

The distribution of wealth is an important issue that needs to be properly discussed, but it is separate from the fact that wealth is created. And it must be created before it can be "distributed." Anything else is nonsense.

Sure, critics may claim shelters are different from the things people want today. That, for example, iPhones etc. do not satisfy "real" wants. But that's also an issue that is separate from the creation of wealth, and it is not really for them to make such judgments. The only thing that matters is that people who use – and choose to use – those means do so because their use satisfy some want that they have. It thus creates value in their lives.  Your opinion does change this fact; it does not decide the wealth or standard of living of someone else.

It's actually beautiful that we do want different things and have different skills, which means we can cooperate through specializing and exchanging and help everyone satisfy more wants than we would be able to on our own. So we're richer as a result (perhaps despite your opinion of people's choices).

Formatted from Twitter: @PerBylund.
  • 1. Link added by the editor.
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Tucker Carlson's Broadside Against Austrian Economics

06/06/2019Jeff Deist

Listen to the Audio Mises Wire version of this article.

Fox News host Tucker Carlson took to the airwaves of this popular show last night to lambaste Austrian economics and libertarianism, which he views as twin pillars of a failed ideology that doesn't protect American workers and their interests.

The GOP, he argues, is in thrall to free-market corporate interests and esoteric economic theories from dusty textbooks. Republicans remain wedded to unbridled libertarian political philosophy, tax cuts, deregulation, and unilateral free trade, all of which enrich elites but hurt average people. Meanwhile, presidential aspirants like Elizabeth Warren and Bernie Sanders offer the American electorate real-world solutions to economic insecurity, jobs, and healthcare.

It's a compelling story, but untrue. Does Carlson honestly think Republican members of Congress are overly theoretical and ideological? And here we thought they were a bunch of unprincipled and poorly-read hacks!1

Does he honestly think the budget-busting GOP of recent political memory, from Bush II (Iraq War, Medicare Part D, Department of Homeland Security, Patriot Act), John McCain, Mitt Romney are ideological libertarians? Why did Ron Paul and Rand Paul fare poorly among Republican primary voters, if in fact free-market ideology and its donor class dominate the party? And hasn't the party been overtaken by Trumpist protectionists?

Of course we're pleased when Right populists recognize the influence of the Austrian school, just as we're pleased when Left-liberals at the New Republic convince themselves that Misesean "neoliberalism" has taken over the world. We note that Mises and Rothbard continue to receive criticism decades after their respective deaths, a testament to their deep (and apparently nefarious!) influence and an honor given to few economists.

Carlson, a onetime Cato Institute staffer and Weekly Standard writer, understands both Republican politics and the DC world of think tanks and punditry. When he references the Austrian school or libertarianism, it's shorthand for "Koch money and influence" rather than any real ideology. It's his shorthand for the "self-interests of rich guys," interests given an intellectual veneer by academics and writers who are happy to accept billionaire crumbs in exchange for cozy non-profit sinecures. "Conservatism, Inc." (or "Libertarianism, Inc.") has become an self-serving industry unto itself, sclerotic and ripe for criticism.  

There is truth to this. But it's not an ideological truth. Tucker Carlson knows better. He knows full well how tariffs make society overall worse off, how markets make poor Americans far better off than the poor in many countries, why government medicine doesn't work, and how minimum wage laws hurt the least-skilled workers. His argument is about priorities and strategy (and TV ratings), not ideology. And it accepts a fundamental tenet of the Left: self-interest for me is noble and warranted, self-interest for others (especially the rich) is suspicious if not sinister.

In other words, Carlson presents a fundamentally zero-sum perspective, which is to say a fundamentally political perspective. 

That said, his populism—particularly his antiwar stance—should not be dismissed. Populism per se is not an ideology, but rather a strategy. It can be imbued with any political philosophy, and thus can be equally dangerous or beneficial. At its core populism questions not only the competence of elites, but also their worthiness. It asks whether elite interests comport with those of average people, and in most cases correctly concludes that political elites have interests at odds with those people. 

When elites are state-connected or state-protected, i.e., when they maintain or even derive their wealth and influence through their relationship with the state, libertarians have every obligation to object. Elites in the West—from politicians and bureaucrats to central bankers and media figures to defense contractors and patent-coddled pharmaceutical execs—richly deserve our ire. They screwed things up, and ought to be held accountable.  

Tucker Carlson is right about that.

Read more: Rothbard on Libertarian Populism

  • 1. As I write this, I'm privileged to sit in a conference room at the epicenter of Austrian economics. A group of graduate students from around the world is in residence at the Mises Institute this summer, and this week they're discussing (chapter by chapter) Rothbard's Man, Economy, and State.Apparently the GOP forgot to send its congressional delegation to attend.
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Trump's Cuba Travel Ban Is A Wall Against Americans

06/06/2019Alice Salles

Governments have too much power over people. But most of us can’t truly grasp how deep this power goes until our lives are completely changed by a new policy.

Three years after President Obama lessened travel restraints to Cuba, the Trump administration imposed new restrictions for American tourists. This new policy impacts private and corporate planes and boats, cruise ship tours, and other group trips to the island nation.

In a statement to the press, Treasury Secretary Steven Mnuchin said that the travel ban was reinstated because of the “destabilizing role in the Western Hemisphere, providing a communist foothold in the region and propping up U.S. adversaries in places like Venezuela and Nicaragua by fomenting instability, undermining the rule of law, and suppressing democratic processes.”

With the new restrictions, Mnuchin said, the administration hopes “to keep U.S. dollars out of the hands of Cuban military, intelligence, and security services.”

On Twitter, Cuba’s Minister of Foreign Affairs Bruno Eduardo Rodríguez Parrilla said the U.S. wants to “[suffocate] the economy & [harm] the living standards of Cubans in order to forcefully obtain political concessions.”

Bruno Eduardo Rodríguez Parrilla, Cuba’s Minister of Foreign Affairs, strongly criticized the new travel sanctions.

“I strongly reject new sanctions announced by #US vs. #Cuba which further restrict #US citizens’ travels to Cuba, aimed at suffocating the economy & harming the living standards of Cubans in order to forcefully obtain political concessions,” Parrilla wrote on Twitter. “Once again they will fail.”

Regardless of how he feels, the conflict between the U.S. government and the Cuban regime shouldn’t impact people who have nothing to do with it. Whether officials of both countries recognize this or not, they have no legitimate authority over people’s lives.

Government Shouldn’t Dictate Travel Policy

This new attack on Cuba, Mnuchin himself admitted in his statement, is due to Cuba’s close association with Venezuela. But because these restrictions impact Cuban citizens directly, as many are only able to make a living thanks to U.S. tourists , Trump’s move might as well be seen as an act of war.

Whether you support the oppressive regimes in both Venezuela and Cuba or not, the nature of the current administration’s policy can’t be ignored, as it puts America, once again, in the role of the world’s police. And as we’ve seen in the past, to play this role means to put innocent people’s lives in jeopardy.

While to some, it might seem OK to punish the entire country for its corrupt government, the reality is that Cubans aren’t in love with communism . Quite the contrary, many agree that their government doesn’t represent them. But when the United States imposes sanctions or travel bans, it ends up fueling Cuban state propaganda while restricting the individual’s right to do what he or she pleases with their own money. In the end, those who hurt the most are the Cuban people, many whose livelihood depend on exchange with foreigners.

Originally published by Advocates for Self Government.

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Bylund: How to Prioritize When Making Decisions as an Entrepreneur

06/05/2019Per Bylund

Life in a startup is fast paced, varied and fun. But it is also a constant and chaotic struggle, a juggling of disparate issues that need attention and decisions to be made at a moment’s notice. There are employees who need directions, tensions that threaten to erupt into personal conflicts, the bank that keeps calling about refinancing the loan, the supplier who suddenly needs the blueprints earlier to be able to deliver on time, and, at the same time, an endless stream of prioritizations that need to be right.

How are entrepreneurs to make order of this chaos? They face a seemingly endless stream of decisions that need to be made.

There is, of course, no simple solution. But there is a way of thinking about all decisions in a startup that can help entrepreneurs quickly figure out what matters more and what matters less: focus on the forest, not the trees.

What I mean by that is not simply to take a holistic approach to decision-making, but to consider the startup’s position in the economy overall. In other words, what a business actually does in the market economy and what function entrepreneurs serve. Sound cryptic? It really isn’t.

Read the full article at Entrepreneur.

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