Categotry Archives: Economics

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Arizona Challenges the Fed’s Money Monopoly – Article by Ron Paul

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Categories: Economics, Politics, Tags: , , , , , , , , , , , , , , , ,

The New Renaissance HatRon Paul
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History shows that, if individuals have the freedom to choose what to use as money, they will likely opt for gold or silver.

Of course, modern politicians and their Keynesian enablers despise the gold or silver standard. This is because linking a currency to a precious metal limits the ability of central banks to finance the growth of the welfare-warfare state via the inflation tax. This forces politicians to finance big government much more with direct means of taxation.

Despite the hostility toward gold from modern politicians, gold played a role in US monetary policy for sixty years after the creation of the Federal Reserve. Then, in 1971, as concerns over the US government’s increasing deficits led many foreign governments to convert their holdings of US dollars to gold, President Nixon closed the gold window, creating America’s first purely fiat currency.

America’s 46-year experiment in fiat currency has gone exactly as followers of the Austrian school predicted: a continuing decline in the dollar’s purchasing power accompanied by a decline in the standard of living of middle- and working-class Americans, a series of Federal Reserve-created booms followed by increasingly severe busts, and an explosive growth in federal-government spending. Federal Reserve policies are also behind much of the increase in income inequality.

Since the 2008 Fed-created economic meltdown, more Americans have become aware of the Federal Reserve’s responsibility for America’s economic problems. This growing anti-Fed sentiment is one of the key factors behind the liberty movement’s growth and represents the most serious challenge to the Fed’s legitimacy in its history. This movement has made “Audit the Fed” into a major national issue that is now closer than ever to being signed into law.

Audit the Fed is not the only focus of the growing anti-Fed movement. For example, this Wednesday the Arizona Senate Finance and Rules Committees will consider legislation (HB 2014) officially defining gold, silver, and other precious metals as legal tender. The bill also exempts transactions in precious metals from state capital-gains taxes, thus ensuring that people are not punished by the taxman for rejecting Federal Reserve notes in favor of gold or silver. Since inflation increases the value of precious metals, these taxes give the federal government one more way to profit from the Federal Reserve’s currency debasement.

HB 2014 is a very important and timely piece of legislation. The Federal Reserve’s failure to reignite the economy with record-low interest rates since the last crash is a sign that we may soon see the dollar’s collapse. It is therefore imperative that the law protect people’s right to use alternatives to what may soon be virtually worthless Federal Reserve notes.

Passage of HB 2014 would also send a message to Congress and the Trump administration that the anti-Fed movement is growing in influence. Thus, passage of this bill will not just strengthen movements in other states to pass similar legislation; it will also help build support for the Audit the Fed bill and legislation repealing federal legal tender laws.

This Wednesday I will be in Arizona to help rally support for HB 2014, speaking on behalf of the bill before the Arizona Senate Finance Committee at 9:00 a.m. I will also be speaking at a rally at noon at the Arizona state capitol. I hope every supporter of sound money in the Phoenix area joins me to show their support for ending the Fed’s money monopoly.

Ron Paul, MD, is a former three-time Republican candidate for U. S. President and Congressman from Texas.

This article is reprinted with permission from the Ron Paul Institute for Peace and Prosperity.

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Jews As the Enemies of the Enemies of Liberty – Article by Steven Horwitz

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Categories: Culture, Economics, Tags: , , , , , , , , , , , , , , , , , , ,

The New Renaissance HatSteven Horwitz
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Anti-Semitism, it’s often said, is the oldest prejudice. The hatred of Jews has waxed and waned over the centuries, but appears to be back with something of a vengeance over the last few years, and especially the last few months.

For example, on Monday, February 27, over two dozen Jewish institutions across the country received bomb threats by anonymous phone calls. These included Jewish Community Centers, synagogues, retirement homes, day care centers, and Jewish educational institutions. These threats are part of a pattern of such threats, including multiple cemetery desecrations, that has been ongoing over the last few months. There have been 100 such threats to Jewish institutions just since the beginning of 2017.

Every time such a threat is called in, these institutions have to clear the building to determine if it is just a hoax. This means rounding up children, infants, the elderly, the infirm, and the developmentally disabled, getting them out of the building and, often, out in the cold, for the hour or two it takes to confirm all is clear. Although, thankfully, these have all turned out to be hoaxes, they still are taking a real toll on the Jewish community and the non-Jews who make use of these institutions. They are, I would argue, a form of terrorism.

The Why of Anti-Semitism

There has been much debate over why these threats have increased in recent months, and it seems plausible that the increased brazenness of the “politically incorrect,” including the rise of the alt-right, in the wake of the Trump campaign is probably one key factor. But anti-Semitism is not solely a problem on the Right. The political Left has had its own history of hatred for Jews, manifested in the present by the increased anti-Semitism of the radical Left in the context of criticism of Israel, especially through the Boycott, Divestments, and Sanctions (BDS) movement.

The sources of anti-Semitism on both Right and Left are complicated, but one element on both sides is that Jews have historically been associated with important liberal ideas such as capitalism, entrepreneurship, cosmopolitanism, and free migration. These institutions have enabled massive social, cultural, and economic change, empowering the previously powerless all over the world, and threatening the old order.

The enemies of liberalism have problems with all of these, though the Right and Left differ on which bothers them the most. But for both, Jews can be easily seen as the enemies of those who find deep flaws with the classical liberal social order. When Jews are being threatened, it is usually a good sign that the foundations of liberalism are as well.

Jewish Anti-Capitalism

One point to note up front is that Jews themselves have a history of opposition to classical liberalism. Jewish intellectuals have had a long-standing attraction to socialism, starting of course with Marx himself. In particular, a number of the architects of the Russian Revolution were Jews or of Jewish heritage.

I raise this because I am not arguing that Jews were somehow reliably classically liberal over the last few centuries. And the fact that a good number of Jews were socialist, or that a good number of socialists were Jews, certainly doesn’t justify anti-Semitism by critics of socialism.

I do think that part of the attraction of socialism to Jews was its universalist aspiration in the form of the trans-national cosmopolitan vision of classical socialism along with its desire to “heal the world” and its strong ethic of concern for the least well-off. Those aspirations were shared by 19th-century classical liberals and were also part of Jewish practice. This universalism made Jews the target of the critics of classical liberalism from the Right, as well as the right-wing critics of socialism.

Jewish Pro-Capitalism

The association of Jews with capitalism, trade, and entrepreneurship is well known. The negative stereotypes of acquisitiveness, materialism, and selfishness that have long been part of anti-Semitism grew out of the truth that Jews were more likely to be traders and financiers than were other groups. Part of this was that as a nomadic people, Jews invested in their human capital rather than the physical capital they would have had to schlep around while getting kicked out of country after country.

(This might also explain why Jews have also been disproportionately entertainers and intellectuals. The skills for telling jokes, writing stories, making music, or working in the realm of ideas are ones that don’t require much in the way of physical capital in order to be successful.)

Jews were also often middlemen as a result of their nomadic existence and familiarity with so many parts of the world. Middlemen have always been suspect to the economically ignorant as far back as Aristotle, as they appear to profit by creating nothing tangible. This is particularly true when the middlemen are in financial markets, where they are not even trading something physical.

It’s no surprise, therefore, that hatred of capitalism has been accompanied by hatred of the Jews

Right-wing anti-Semitism, however, often draws upon these capitalist tropes as part of its hatred. But in this context, Jews are not so much seen as representative of capitalist exploitation that can be ended by socialism, but rather as an example of people who place love of money and their universalist aspirations above the love of their country and its citizens.

German anti-Semitism in the 20th century had roots in the argument that Jews had been “war profiteers” in World War I and had benefitted from the economic destruction that characterized the Weimar Republic period leading up to Hitler’s ascension to power. The Nazis, and other fascist movements, saw the Jews as the sort of rootless cosmopolitans who were unable to grasp the importance of blood and soil.

The modern version of this point, and one that is also found on the Left, is the “dual loyalty” charge laid upon pro-Israel Jews: they are beholden to Israel in ways that cause them to work against the interests of the United States.

The Why of Nationalism

One way to see the “national socialism” of various fascist movements is that they objected not to socialism per se, but to socialism’s attempt to put class ahead of race or ethnicity or nationality. To the fascists, German or Italian workers shared much more with German or Italian capitalists than they did with Russian or American workers. Marxian socialism drew the wrong battle lines.

And so it is today, as “economic nationalism” is on the rise globally and Jews have again become the most obvious target for an invigorated Right. Jews have always been the symbol of the cosmopolitan, the migrant, and the “rootless” trader. If you reject market-driven globalization, whether because you dislike markets or because you are a nationalist, you are going to have reasons to see Jews as symbols of what you reject. That opposition to immigration and global trade, and the market system that is at the root of both, would go hand-in-hand with anti-Semitism is hardly surprising.

The economic nationalism of Trump and a variety of European leaders is not inherently anti-Semitic, nor does it require that the leaders of such movements be anti-Semites, but the arguments of economic nationalism can easily empower the anti-Semitism of both the Right and Left. The leaders build in plausible deniability, knowing full well the nature of the forces they are unleashing but in ways that avoid direct responsibility.

How could they not know? We have centuries of experience to draw on, back to the ancient world through the Middle Ages all the way to the ghastly slaughter of the 20th century during which anti-Semitism nearly destroyed the whole of Europe itself. The costs have been unspeakable, and hence the vow to never forget. And yet, despite this history, the tendency to forget remains. To remember would require that we think more clearly about ideology and philosophy, human rights and dignity. Many people do not want to do that. It remains easier to scapegoat than to remember.

Admittedly, we liberals have a special grudge against anti-Semitism. It broke up the greatest intellectual society of the 20th century, shattering Viennese intellectual life, flinging even Ludwig von Mises out of his home and into the abyss. His books were banned, and those of many others too. He and so many fled for their lives but bravely rebuilt them in the new world that offered protection.

A Warning Sign

It has been said that Jews are the canaries in the coal mine of a liberal society: when they are under threat, it is a warning sign. The ongoing and increasing threats to Jewish communities here in the US, as well as similar trends across Europe, should have all of us worried. A world where Jews sing out in joy together and are unafraid to fly free is one far more safe from tyranny than one in which we Jews worry about dying in our own cages, as many of us are doing as the threats to our institutions have become more frequent and more brazen in recent months.

Watch how a society treats Jews and you’ll have an indicator of its degree of openness and respect for liberty. When Jews are being threatened, so are the deepest of our liberal values. The poisonous air from coal mining that killed canaries was invisible. The threats to Jews and to liberalism are not. Citizens of liberal societies dismiss or downplay those threats at our own peril.

Steven Horwitz is the Charles A. Dana Professor of Economics at St. Lawrence University and the author of Hayek’s Modern Family: Classical Liberalism and the Evolution of Social Institutions. He is spending the 2016-17 academic year as a Visiting Scholar at the John H. Schnatter Institute for Entrepreneurship and Free Enterprise at Ball State University.

He is a member of the FEE Faculty Network.

This article was published by The Foundation for Economic Education and may be freely distributed, subject to a Creative Commons Attribution 4.0 International License, which requires that credit be given to the author. Read the original article.

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Alan Greenspan Admits Ron Paul Was Right About Gold – Article by Ryan McMaken

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Categories: Economics, History, Tags: , , , , , , , , , , , , , , , , , , ,

The New Renaissance Hat
Ryan McMaken
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In the next issue of The Austrian, David Gordon reviews Sebatian Mallaby’s new book, The Man Who Knew, about the career of Alan Greenspan. Mallaby points out that prior to his career at the Fed, Greenspan exhibited a keen understanding of the gold standard and how free markets work. In spite of this contradiction, Mallaby takes a rather benign view toward Greenspan.

However, in his review, Gordon asks the obvious question: If Greenspan knew all this so well, isn’t it all the more worthy of condemnation that Greenspan then abandoned these ideas so readily to advance his career?

Perhaps not surprisingly, now that his career at the Fed has ended, Old Greenspan — the one who defends free markets — has now returned.

This reversion to his former self has been going on for several years, and Greenspan reiterates this fact yet again in a recent interview with Gold Investor magazine. Greenspan is now a fount of sound historical information about the historical gold standard:

I view gold as the primary global currency. It is the only currency, along with silver, that does not require a counterparty signature. Gold, however, has always been far more valuable per ounce than silver. No one refuses gold as payment to discharge an obligation. Credit instruments and fiat currency depend on the credit worthiness of a counterparty. Gold, along with silver, is one of the only currencies that has an intrinsic value. It has always been that way. No one questions its value, and it has always been a valuable commodity, first coined in Asia Minor in 600 BC.

The gold standard was operating at its peak in the late 19th and early 20th centuries, a period of extraordinary global prosperity, characterised by firming productivity growth and very little inflation.

But today, there is a widespread view that the 19th century gold standard didn’t work. I think that’s like wearing the wrong size shoes and saying the shoes are uncomfortable! It wasn’t the gold standard that failed; it was politics. World War I disabled the fixed exchange rate parities and no country wanted to be exposed to the humiliation of having a lesser exchange rate against the US dollar than itenjoyed in 1913.

Britain, for example, chose to return to the gold standard in 1925 at the same exchange rate it had in 1913 relative to the US dollar (US$4.86 per pound sterling). That was a monumental error by Winston Churchill, then Chancellor of the Exchequer. It induced a severe deflation for Britain in the late 1920s, and the Bank of England had to default in 1931. It wasn’t the gold standard that wasn’t functioning; it was these pre-war parities that didn’t work. All wanted to return to pre-war exchange rate parities, which, given the different degree of war and economic destruction from country to country, rendered this desire, in general, wholly unrealistic.

Today, going back on to the gold standard would be perceived as an act of desperation. But if the gold standard were in place today we would not have reached the situation in which we now find ourselves.

Greenspan then says nice things about Paul Volcker’s high-interest-rate policy:

Paul Volcker was brought in as chairman of the Federal Reserve, and he raised the Federal Fund rate to 20% to stem the erosion [of the dollar’s value during the inflationary 1970s]. It was a very destabilising period and by far the most effective monetary policy in the history of the Federal Reserve. I hope that we don’t have to repeat that exercise to stabilise the system. But it remains an open question.

Ultimately, though, Greenspan claims that central-bank policy can be employed to largely imitate a gold standard:

When I was Chair of the Federal Reserve I used to testify before US Congressman Ron Paul, who was a very strong advocate of gold. We had some interesting discussions. I told him that US monetary policy tried to follow signals that a gold standard would have created. That is sound monetary policy even with a fiat currency. In that regard, I told him that even if we had gone back to the gold standard, policy would not have changed all that much.

This is a rather strange claim, however. It is impossible to know what signals a gold standard “would have” created in the absence of the current system of fiat currencies. It is, of course, impossible to recreate the global economy under a gold standard in an economy and guess how the system might be imitated in real life. This final explanation appears to be more the sort of thing that Greenspan tells himself so he can reconcile his behavior at the fed with what he knows about gold and markets.

Nor does this really address Ron Paul’s concerns, expressed for years, toward Greenspan and his successors. Even if monetary policymakers were attempting to somehow replicate a gold-standard environment, Paul’s criticism was always that the outcome of the current monetary regime can be shown to be dangerous for a variety of reasons. Among these problems are enormous debt loads and stagnating real incomes due to inflation. Moreover, thanks to Cantillon effects, monetarily-induced inflation has the worst impact on lower-income households.

Even Greenspan admits this is the case with debt: “We would never have reached this position of extreme indebtedness were we on the gold standard, because the gold standard is a way of ensuring that fiscal policy never gets out of line.”

Certainly, debt loads have taken off since Nixon closed the gold window in 1971, breaking the last link with gold:

Ryan W. McMaken is the editor of Mises Daily and The Free Market. He has degrees in economics and political science from the University of Colorado, and was the economist for the Colorado Division of Housing from 2009 to 2014. He is the author of Commie Cowboys: The Bourgeoisie and the Nation-State in the Western Genre. 

This article was published on Mises.org and may be freely distributed, subject to a Creative Commons Attribution United States License, which requires that credit be given to the author.

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Remembering the Man Who Turned Numbers Into Hope – Article by Steven Horwitz and Sarah Skwire

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The New Renaissance HatSteven Horwitz and Sarah Skwire
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After the spate of celebrities who died in 2016, the death of a Swedish professor of international health might not seem very newsworthy. However, Hans Rosling, who died of pancreatic cancer on February 7th, was no ordinary or obscure professor.

The story of his life and career can be found both at Wikipedia and in this marvelous Nature profile. What those sources cannot quite convey is Rosling’s importance as a role model for intellectual honesty, personal warmth and charisma, and a willingness to go where the facts took him, regardless of whether those facts adhered to any simplistic political narrative of humanity’s past and future. Both Rosling’s intellectual fearlessness and the substance of his work have importance for those who care about human freedom and progress.

Intellect and Humanity

But it isn’t just the content of Rosling’s work that matters. He was an amazing rhetorician. He had a unique ability to use and present data in easy to understand and visually appealing ways that were very effective at conveying an argument. He also was able to think creatively about the linkages among the various causes of wealth and the improvements they made in human well-being. His natural storytelling ability gave him the capacity to put those complex historical factors into narratives that not only got the history right, but did so in a way that appealed to our shared humanity.

All of these skills are on display in his two most famous videos, both of which impart lessons in presenting ideas and interpretations of data that classical liberals will find very useful.

Underlying much of Rosling’s work as a public intellectual was a concern with how we enable all of humanity to share in the health and wealth that has come to characterize the Western world.

With his background in health and demographics, Rosling was interested in the factors that led to the rising health and longevity of the West. First, of course, he had to document just how much better things had become in the West, then he had to explore the causes.

Presenting the raw data about the improvement of the West was the centerpiece of his BBC video “200 Years, 200 Countries, 4 Minutes.” Using real-time data visualization techniques, he shows how every country in the world was poor and sick 200 years ago and then showed the path by which so many countries became wealthy and healthy. There is no better visualization of the progress of humanity than this one.

For those of us who work with students, this video gives us the opportunity to talk about the factors that made that growth happen, including the role of liberal institutions and the rising moral status of the individual in that process. It is a great complement to the work of Deirdre McCloskey.

The video also provides a way to talk about global inequality. What is clear from the visualization of the data is that 200 years ago, countries were far more equal than now, but they were equally poor.

It’s true that the gap between rich and poor countries is greater now than back then, but everyone has improved their absolute position. And two of the countries that have improved the most are two of the most populous: China and India. Rosling’s presentation opens up countless useful discussions of the importance of economic growth for increases in life expectancy, as well as what exactly concerns us about growing inequality.

As he concludes, the task before us now is to figure out how to bring the rest of the world up to where the West is. Though he does not discuss it, the economic evidence is clear that those countries that have experienced the most growth, and therefore the biggest increases in longevity and other demographic measures of well-being, are those that have the freest economies. By giving us the data, Rosling enables classical liberals to engage the conversation about the “why” and “how” of human betterment.

Inspirational ‘Edutainer’

But our favorite video of Rosling’s is definitely “The Magic Washing Machine.” Here Rosling uses the example of the washing machine to talk about economic growth and its ability to transform human lives for the better.

Rosling’s focus is on the way the washing machine is an indicator of a population that has grown wealthy enough not only to buy such machines, but also to provide the electricity to power them. The washing machine is a particularly valuable machine since it relieves most of the physical burden of one of the most onerous tasks of the household, and one that has historically fallen entirely to women.

No one who has seen the video can forget the story of Rosling’s grandmother pulling up a chair in front of the new washing machine for the sheer joy of sitting and watching while the clothes spin. Her excitement becomes even more poignant when one considers that this must have been the first time in her life when she was able to sit while laundry was done, instead of standing over a tub of hot water and soap.

Rosling points out, in a moment of calling his fellow progressives to task, that while many of his students are proud of biking to class instead of driving, none of them do their wash by hand. That chore, though green, is simply too onerous for most moderns to take on. He then goes on to discuss how we have to find ways to create the energy needed as billions of people cross the “wash line” and start to demand washing machines.

The video ends with him reaching into the washing machine and pulling out the thing that the machine really made possible:  books. The washing machine gave his mother time to read and to develop herself, as well as to read to young Hans and boost his education as well.

The visual image of putting clothes into a washing machine and pulling out books in exchange captures all that is good about economic growth in a succinct and unforgettable way. Rosling concludes the video with a heart-felt roll call of gratitude to industrialization and development that has been known to reduce free market economists to tears.

What Rosling does in that video is to effectively communicate what classical liberals see as the real story of economic growth. He gets us to see how economic growth, driven by markets, has enabled women to live more liberated lives. Classical liberals can talk endlessly about the data, but until we talk effectively about the way in which industrialization and markets have made it possible for women (and others) to be freed from drudgery that was literally back-breaking, we cannot win the war on the market.

Thank You

Bastiat said that “The worst thing that can happen to a good cause is, not to be skillfully attacked, but to be ineptly defended.” Hans Rosling’s work is the best possible example of the best kind of defense of a good cause. He was a model and an inspiration.

Rosling ends “The Magic Washing Machine” by saying “Thank you industrialization. Thank you steel mill. Thank you power station. And thank you chemical processing industry that gave us time to read books.”

We say, “Thank you, Dr. Rosling. Thank you, data visualization. Thank you TED talks. And thank you, Mrs. Rosling, for buying a washing machine and reading to your son.” We are richer for the work he did. We are poorer for his loss.

Steven Horwitz is the Charles A. Dana Professor of Economics at St. Lawrence University and the author of Hayek’s Modern Family: Classical Liberalism and the Evolution of Social Institutions. He is spending the 2016-17 academic year as a Visiting Scholar at the John H. Schnatter Institute for Entrepreneurship and Free Enterprise at Ball State University.

He is a member of the FEE Faculty Network.

Sarah Skwire is the Literary Editor of FEE.org and a senior fellow at Liberty Fund, Inc. She is a poet and author of the writing textbook Writing with a Thesis. She is a member of the FEE Faculty Network. Email

This article was published by The Foundation for Economic Education and may be freely distributed, subject to a Creative Commons Attribution 4.0 International License, which requires that credit be given to the author. Read the original article.

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France’s Presidential Front-Runner Is a Trump-Style Nationalist – Article by Pierre-Guy Veer

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Categories: Economics, Politics, Tags: , , , , , , , ,

The New Renaissance HatPierre-Guy Veer
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After the populist victories for Brexit and Donald Trump, all eyes are now turned towards the National Front’s (FN) Marine Le Pen, who could cause another worldwide stir by winning the French presidential election. And with the present state of the polls, she could repeat her father Jean-Marie’s exploit of progressing to the second round of a presidential election (France has a two-round, direct electoral process). She even was ranked ahead of right-wing candidate François Fillon in a survey of the most popular French men and women of 2016. And her recent trip to Trump Tower shows that she has an affinity with the President-elect.

Should these poll figures translate into Marine’s election, France (and the rest of the world) should be worried.

Like Trump’s “Make America Great Again”, Le Pen adopted a very vague and populist slogan, “Au nom du people” (In The People’s Name). According to her, the 2017 election is between two options,

  • The dilution of the Nation, its society divided by multiculturalism, open and defenseless against unfettered globalization and the European Union, plagued by laissez-faire, and where the strongest will rule
  • The reconquering of the French Nation’s independence, liberties, and national pride, where the State protects prosperity and every citizen. The People will be moved by a grand collective project.

Her party’s platform reveals how she intends to make these “reconquests”.

Less Immigration, State-Sponsored Identity

As a backlash against Nicolas Sarkozy’s “betrayal” of the French regarding immigration, an FN presidency would reduce immigration to 10,000 people entering per year within five years – one-twentieth of what it is right now. This would be done by ending the Schengen Agreements on free movement, dual citizenship for people coming from outside the EU (they would have to choose either nationality), family reunions, and by mercilessly fighting undocumented (“clandestins”) immigrants – including legal changes to suppress any future regularization of their status.

Part of the latter measure would actually be good as it would end the Aide médicale d’État for undocumented immigrants. These government grants help anyone living in the French territory receive basic medical assistance if his or her health justifies it. Its costs increased 16.4 percent in 2013 (to over 800 million €), which prompted UMP deputy Claude Goasguen to question the pertinence of the program that covers nearly 300,000 undocumented and illegal immigrants in French territories (including Guyana). However, getting information from the ministère de la Santé who administers the program is rather difficult.

But this savings in tax euros pales in comparison to other citizenship policy ideas that are reminiscent of Germany’s darkest days.

For example, one may obtain French citizenship only when able to master the French language, show proof of assimilation, and reside on the territory legally. Also, identity would become a matter of complete government control; the FN would make a constitutional amendment claiming that “the Republic recognizes no community whatsoever” – like Corsica or Brittany. It would even have its own ministry, the ministère de l’Intérieur, de l’immigration et de la laïcité (Ministry of Interior, Immigration and Secularity).

State identity would also find a strong foothold through the Ministry of Culture. The FN would stop any foreign purchase of French editing businesses, defend the “French cultural exception” by imposing strict quotas to air French productions on TV and on the radio and promote French movies – the “only counterweight” to American cinema – more aggressively.

Another measure, touching on economics this time, would encourage businesses to hire French citizens if a non-citizen has similar skills. It would also exclude non-citizens from jobs like justice and public security.

A State with an Iron Fist

The strengthening of the French state under the FN would also mean implementing U.S.-style policing, in order to stop “a 20-year growth in insecurity from successive governments.”

This includes a restriction on the free circulation of newly freed inmates within the country, so they won’t “fall again” in criminality by meeting their former buddies. It would include specific city blocks, but the FN would want to extend the interdiction to whole départments.

The War on Drugs would greatly expand, as the FN categorically refuses any drug decriminalization. Instead, they want to reinforce repression of both dealers and consumers, strictly control borders to prevent importation of illegal drugs, and “facilitate” the police’s work – through email interception, paying-off snitches, compelling security camera businesses to have videos available for investigations, etc.

And as it seems to happen in the U.S., the police under an FN administration would use firearms, presumably in self-defense. Non-uniformed police would even be used to fight against “insecurity”.

An Omnipotent State Master of the Economy

Finally, Marine Le Pen and the FN would make communists’ dreams come true by reinforcing the state’s already strong position in the French economy – government spending is already 57 percent of GDP according to the most recent figures.

To do so, they would restore public services, the “a patrimony to which the French are legitimately attached to.” The FN would immediately end the “dogma” of government liberalization and protect government services, especially mail delivery and train transportation. The FN would also expand regulations on private providers (like phone and internet companies) to make sure that every parcel of French territory (including DOM-TOM) has equal access to their services.

Paralleling Donald Trump’s wishes, they aim to make mercantilism great again by imposing “reasonable” protections against “unfair” international competition from developing countries detrimental to France’s reindustrialization. Yes, you read that right: a government in 2017 believes that durable economic development can be a top-down move.

The plan, Planification Stratégique de la Réindustralisation, includes a strong local purchase policy under the erroneous assumption that international trade emits more greenhouse gases than local production. Speaking of which, tariffs would also consider a foreign producer’s “footprint” in order to save the environment. The plan would oblige public authorities and business cafeterias to prioritize French farm products and institute “agricultural patriotism” in order to limit food imports to only those that France isn’t self-sustaining.

The plan would also coordinate with scientific research, on which the FN wants to spend three percent of GDP when finances are better. They even predict some of the domains in which the French state will excel: energy alternatives to nuclear power, nanotechnologies, and degenerative diseases like Alzheimer’s.

The Gist

In short, Marine Le Pen and the National Front are completely doing away with the ideas of France’s greatest intellectuals like Frédéric Bastiat and Jean-Baptiste Say, and are instead embracing economic charlatans like Jean-Baptiste Colbert.

They will certainly test the limits of “plucking the chicken with the least amount of hissing” by increasing the highest income tax bracket to 46 percent (now at 45 percent), imposing higher rates of capital gains taxes, and increasing the value-added tax on “luxurious” products.

So if Le Pen gets elected, let’s hope that, as was the case during Trump’s nominee confirmations, deputies at the National Assembly will question her decisions and will not allow the country to sink under toxic economic nationalism. The last time the world experienced widespread nationalism, countries fell in one of the deepest depressions ever recorded and nearly annihilated each other.

Pierre-Guy Veer is a Canadian-born libertarian now living in the US.

This article was originally published on FEE.org. Read the original article.

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What Marx Could Teach Obama and Trump about Trade – Article by Jairaj Devadiga

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The New Renaissance HatJairaj Devadiga
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Karl Marx was hardly known for championing economic freedom. Yet, even he understood the evils of protectionism. Marx, as quoted by his sidekick Frederick Engels, gave probably my favorite definition of protectionism:

“The system of protection was an artificial means of manufacturing manufacturers, of expropriating independent laborers, of capitalizing the national means of production and subsistence, and of forcibly abbreviating the transition from the medieval to the modern mode of production.”

Wow. So much wisdom packed into one sentence, and from Marx of all people. Let’s go through the sentence piece by piece to understand its meaning.

“Artificially manufacturing manufacturers”

This is an obvious one. We need only look at Donald Trump and the way he seeks to create jobs in the United States. By imposing tariffs on imported goods, Trump wants to encourage their production in America by making it relatively cheaper. This is what Marx meant by “manufacturing manufacturers”.

“Expropriating independent laborers”

Protectionism, as Marx observed, hurts the working class. Apart from the corporations who are protected against foreign competition, and their employees, everybody loses. For example, when Obama increased tariffs on tire imports, it increased the incomes of workers in that industry by less than $48 million. But it forced everyone else to spend $1.1 billion more on tires.

Just imagine the impact of Trump imposing across the board tariffs on all products. The cost of living for the average working class American would shoot up by an order of magnitude. And that is not even considering the impact of retaliatory tariffs.

“Capitalizing the… means of production” and  “forcibly abbreviating the transition… to the modern mode of production.”

Marx knew that when you make it expensive to employ people by way of minimum wage and other labor regulations, you make it relatively more profitable to use machines. Economist Narendra Jadhav tracks how manufacturing in India has become more capital-intensive over the years. Tariffs on imported goods did not help create jobs in the manufacturing sector. Even though India has armies of young, unemployed people it is cheaper to use machines rather than comply with the nearly 250 different labor laws (central and state combined).

Just because Trump imposes a tariff on Chinese goods does not mean that jobs will “come back” to the US. Even if there were no minimum wage, wages in the US are naturally higher than wages in less-developed countries, meaning it would still be cheaper to use robots.

“Emancipation of the Proletarians”

Apart from more and better quality goods that would be available more cheaply, as economist Donald Boudreaux points out ever so often, there is another thing to be gained from free trade. Marx said it would lead to the “emancipation of the proletarians.” I turn once again to India as an example. Where earlier the rigid caste system forced so-called “untouchables” into demeaning jobs (such as cleaning sewers), in the past 25 years some of them have become millionaires as a result of India being opened up to trade.

It is a shame, that even when virtually all intellectuals, from F.A. Hayek and Milton Friedman to Karl Marx and Keynes, have agreed that free trade is the best, there are those who would still defend protectionism.

Jairaj Devadiga is an economist who illustrates the importance of property rights and freedom through some interesting real-world cases.

This article was originally published on FEE.org. Read the original article.

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The Good News They’re Not Telling You – Article by Thomas E. Woods, Jr.

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Categories: Economics, Technology, Transhumanism, Tags: , , , , , , , , , , , , , ,

The New Renaissance HatThomas E. Woods, Jr.
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As we look at things that impress us technologically we also have a certain trepidation, because we’re told that robots are going to take our jobs. “Yes, the internet is wonderful,” we may say, “but robots, I don’t want those.”

I don’t mean to make light of this because robots are going to take a lot of jobs. They’re going to take a lot of blue collar jobs, and they’re going to take a lot of white collar jobs you don’t think they can take. Already there are robots that can dispense pills at pharmacies. That’s being done in California. They have not made one mistake. You can’t say that about human pharmacists, who are now free to be up front talking to you while the robot fills the prescription.

Much of this is discussed by author Kevin Kelly in his new book The Inevitable, with the subtitle Understanding the 12 Technological Forces that Will Shape Our Future. It’s incredible what robots can do and what they will be able to do.

Automation Really Is Taking Our Jobs

To me, just the fact that one of Google’s newest computers can caption a photo perfectly — it can figure out what’s happening in the photo and give a perfect caption — is amazing. Just when you think “a machine can’t do my job,” maybe it can.

What kind of world is this we’re moving into? I understand the fear about that. But, at the same time, let’s think, first of all, about what happened in the past.

In the past, most people worked on farms, and automation took away 99 percent of those jobs. Literally 99 percent. They’re gone. People wound up with brand new jobs they could never have anticipated. And in pursuing those jobs we might even argue that we became more human. Because we diversified. Because we found a niche for ourselves that was unique to us. Automation is going to make it possible for human beings to do work that is more fulfilling.

How is that? Well, first let’s think about the kinds of jobs that automation and robots do that we couldn’t do even if we tried. Making computer chips, there’s no one in this room who could do that. We don’t have the precision and the control to do that. We can’t inspect every square millimeter of a CAT scan to look for cancer cells. These are all points Kevin Kelly is trying to make to us. We can’t inflate molten glass into the shape of a bottle.

So, there are many tasks that are done by robots, through automation that are tasks we physically could not do at all, and would not get done otherwise.

Automation Creates Luxuries We Didn’t Know Were Possible

But also automation creates jobs we didn’t even know we wanted done. Kelly gives this example:

Before we invented automobiles, air-conditioning, flat-screen video displays, and animated cartoons, no one living in ancient Rome wished they could watch pictures move while riding to Athens in climate-controlled comfort. … When robots and automation do our most basic work, making it relatively easy for us to be fed, clothed, and sheltered, then we are free to ask, “What are humans for?”

Kelly continues:

Industrialization did more than just extend the average human lifespan. It led a greater percentage of the population to decide that humans were meant to be ballerinas, full-time musicians, mathematicians, athletes, fashion designers, yoga masters, fan-fiction authors, and folks with one-of-a kind titles on their business cards.

The same is true of automation today. We will look back and be ashamed that human beings ever had to do some of the jobs they do today.

Turning Instead to Art, Science, and More

Now here’s something controversial. Kelly observes that there’s a sense in which we want jobs in which productivity is not the most important thing. When we think about productivity and efficiency, robots have that all over us. When it comes to “who can do this thing faster,” they can do it faster. So let them do jobs like that. It’s just a matter of — so to speak — robotically doing the same thing over and over again as fast as possible. We can’t compete there. Why bother?

Where can we compete? Well, we can compete in all the areas that are gloriously inefficient. Science is gloriously inefficient because of all the failures that are involved along the way. The same is true with innovation. The same is true of any kind of art. It is grotesquely inefficient from the point of view of the running of a pin factory. Being creative is inefficient because you go down a lot of dead ends. Healthcare and nursing: these things revolve around relationships and human experiences. They are not about efficiency.

So, let efficiency go to the robots. We’ll take the things that aren’t so focused on efficiency and productivity, where we excel, and we’ll focus on relationships, creativity, human contact, things that make us human. We focus on those things.

Automation Really Does Make Us Richer

Now, with extraordinary efficiency comes fantastic abundance. And with fantastic abundance comes greater purchasing power, because of the pushing down of prices through competition. So even if we earn less in nominal terms, our paychecks will stretch much further. That’s how people became wealthy during and after the Industrial Revolution. It was that we could suddenly produce so many more goods that competitive pressures put downward pressure on prices. That will continue to be the case. So, even if I have a job that pays me relatively little — in terms of how many of the incredibly abundant goods I’ll be able to acquire — it will be a salary the likes of which I can hardly imagine.

Now, I can anticipate an objection. This is an objection I’ll hear from leftists and also from some traditionalist conservatives. They’ll sniff that consumption and greater material abundance don’t improve us spiritually; they are actually impoverishing for us.

Well, for one thing, there’s actually much more materialism under socialism. When you’re barely scraping enough together to survive, you are obsessed with material things. But, second, let’s consider what we have been allowed to do by these forces. First, by industrialization alone. I’ve shared this before, but on my show I had Deirdre McCloskey once and she pointed out that in Burgundy, as recently as the 1840s, the men who worked the vineyards — after the crop was in, in the fall — they would go to bed and they would sleep huddled together, and they basically hibernated like that for months because they couldn’t afford the heat otherwise, or the food they would need to eat if they were expending energy by walking around. Now that is unhuman. And they don’t have to live that way anymore because they have these “terrible material things that are impoverishing them spiritually.”

The world average in terms of daily income has gone from $3 a day a couple hundred years ago to $33 a day. And, in the advanced countries, to $100 a day.
Yes, true, people can fritter that away on frivolous things, but there will always be frivolous people.

Meanwhile, we have the leisure to do things like participate in an American Kennel Club show, or go to an antiques show, or a square-dancing convention, or be a bird watcher, or host a book club in your home. These are things that would have been unthinkable to anyone just a few hundred years ago.

The material liberation has liberated our spirits and has allowed us to live more fulfilling lives than before. So, I don’t want to hear the “money can’t give you happiness” thing. If this doesn’t make you happy — that people are free to do these things and pursue things they love — then there ain’t no satisfying you.

Tom Woods, a senior fellow of the Mises Institute, is the author of a dozen books, most recently Real Dissent: A Libertarian Sets Fire to the Index Card of Allowable Opinion. Tom’s articles have appeared in dozens of popular and scholarly periodicals, and his books have been translated into a dozen languages. Tom hosts the Tom Woods Show, a libertarian podcast that releases a new episode every weekday. With Bob Murphy, he co-hosts Contra Krugman, a weekly podcast that refutes Paul Krugman’s New York Times column.

This article was published on Mises.org and may be freely distributed, subject to a Creative Commons Attribution United States License, which requires that credit be given to the author.

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A Plan to Make Me Great Again – Article by Jeffrey Tucker

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Categories: Economics, Politics, Tags: , , , , , , , , , ,

The New Renaissance HatJeffrey Tucker
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I was out shopping for a sweater this weekend and I ran into Donald Trump, who told me that I should stop outsourcing my job.

“You should be knitting your own sweaters.”

I explained that I’m not very good at knitting. I have other things to do, in any case. This whole idea strikes me as a huge waste of time. I just can’t see myself sitting at home doing knitting. It’s true that this would give me a job, but it is not a job I want, especially since someone else wants to do it for me.

But he strongly disagreed, explaining that the problem with this country is that we keep taking away our own jobs and keep giving them to other people, who then get the money. This is a bad thing. This is why we are all suffering so much.

I persisted with objections, so he proposed a deal. If I continue to outsource my job, I will have to pay him a 35% tax, which means that if I spend $50 on a sweater, I will need to send him $17.50. That’s a bummer, we both agreed.

Instead, he said, if I take up sweater knitting, he will reduce my income tax rate to a flat 15%, plus exempt my sweater-making from all existing regulations. I would be free to make any sweater I want. The catch is that I have to knit sweaters, because doing that will make me great.

“Just think of it,” he said, “Jeffrey Tucker is open for business!”

In some ways, this sounds pretty sweet. A bit goofy but OK. It’s awkward but I’ll take up knitting on nights and weekends, producing at least one sweater per month. I will continue to do this in order to earn the promised benefit.

Also, I’ll stop buying sweaters at the store and thus end my addiction to outsourcing my production. It’s true that I have given up a huge amount of my freedom over how I spend my time and use my resources (I have to buy all those yarns and needles), but, on the plus side, I avoid a punishing penalty, pay lower taxes, and obey fewer regulations.

The deal doesn’t strike me as very efficient, but, as Trump said, this focus on efficiency over greatness is precisely what has gone wrong in this country.

Sometimes I wonder why his version of greatness should prevail over mine, but, hey, he is the President.

One Month Later

I finally finished my first sweater, and I’m a bit behind on other things. I gave up my job driving Uber. I stopped selling stuff on eBay. I was doing volunteer work for a local charity and I had to give that up too. But at least now I have a sweater. Maybe I can make money at this after all.

I tried to sell it but I couldn’t find any buyers. It turns out that everyone else who needed sweaters had made a similar deal. They too had been persuaded to become great by knitting their own sweaters. We had all become sweater-self-sufficient.

I hope they aren’t feeling as poor as I feel now.

I gradually came to realize something. If you cooperate with others, share the work, find out what you do best, trade with others, and make your own decisions about what you want to insource versus outsource, you can eventually find the best strategy for using your time and resources well.

As Adam Smith proved so long ago, a key to prosperity is the expansion of the division of labor, that is, finding ways to benefit from the talents of others wherever they happen to be. I can only do this if I am truly free to buy and sell based on my own evaluation of what benefits me the most. And under this system, what benefits me also happens to benefit everyone.

This system, which we can call free trade, has the added benefit of creating a kind of community feeling. Peace. Prosperity. There is something great about that after all.

Jeffrey Tucker


Jeffrey Tucker

Jeffrey Tucker is Director of Content for the Foundation for Economic Education and CLO of the startup Liberty.me. Author of five books, and many thousands of articles, he speaks at FEE summer seminars and other events. His latest book is Bit by Bit: How P2P Is Freeing the World.  Follow on Twitter and Like on Facebook. Email.

This article was originally published on FEE.org. Read the original article.

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To Really ‘Make America Great Again,’ End the Fed! – Article by Ron Paul

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Categories: Economics, Politics, Tags: , , , , , , , , , , ,

The New Renaissance HatRon Paul
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Former Dallas Federal Reserve Bank President Richard Fisher recently gave a speech identifying the Federal Reserve’s easy-money/low-interest-rate policies as a source of the public anger that propelled Donald Trump into the White House. Mr. Fisher is certainly correct that the Fed’s policies have “skewered” the middle class. However, the problem is not specific Fed policies, but the very system of fiat currency managed by a secretive central bank.

Federal Reserve-generated increases in money supply cause economic inequality. This is because, when the Fed acts to increase the money supply, well-to-do investors and other crony capitalists are the first recipients of the new money. These economic elites enjoy an increase in purchasing power before the Fed’s inflationary policies lead to mass price increases. This gives them a boost in their standard of living.

By the time the increased money supply trickles down to middle- and working-class Americans, the economy is already beset by inflation. So most average Americans see their standard of living decline as a result of Fed-engendered money supply increases.

Some Fed defenders claim that inflation doesn’t negatively affect anyone’s standard of living because price increases are matched by wage increases. This claim ignores the fact that the effects of the Fed’s actions depend on how individuals react to the Fed’s actions.

Historically, an increase in money supply does not just cause a general rise in prices. It also causes money to flow into specific sectors, creating a bubble that provides investors and workers in those areas a (temporary) increase in their incomes. Meanwhile, workers and investors in sectors not affected by the Fed-generated boom will still see a decline in their purchasing power and thus their standard of living.

Adoption of a “rules-based” monetary policy will not eliminate the problem of Fed-created bubbles, booms, and busts, since Congress cannot set a rule dictating how individuals react to Fed policies. The only way to eliminate the boom-and-bust cycle is to remove the Fed’s power to increase the money supply and manipulate interest rates.

Because the Fed’s actions distort the view of economic conditions among investors, businesses, and workers, the booms created by the Fed are unsustainable. Eventually reality sets in, the bubble bursts, and the economy falls into recession.

When the crash occurs the best thing for Congress and the Fed to do is allow the recession to run its course. Recessions are the economy’s way of cleaning out the Fed-created distortions. Of course, Congress and the Fed refuse to do that. Instead, they begin the whole business cycle over again with another round of money creation, increased stimulus spending, and corporate bailouts.

Some progressive economists acknowledge how the Fed causes economic inequality and harms average Americans. These progressives support perpetual low interest rates and money creation. These so-called working class champions ignore how the very act of money creation causes economic inequality. Longer periods of easy money also mean longer, and more painful, recessions.

President-elect Donald Trump has acknowledged that, while his business benefits from lower interest rates, the Fed’s policies hurt most Americans. During the campaign, Mr. Trump also promised to make Audit the Fed part of his first 100 days agenda. Unfortunately, since the election, President-elect Trump has not made any statements regarding monetary policy or the Audit the Fed legislation. Those of us who understand that changing monetary policy is the key to making America great again must redouble our efforts to convince Congress and the new president to audit, then end, the Federal Reserve.

Ron Paul, MD, is a former three-time Republican candidate for U. S. President and Congressman from Texas.

This article is reprinted with permission from the Ron Paul Institute for Peace and Prosperity.

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The IRS Believes All Bitcoin Users are Tax Cheats – Article by Jim Harper

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Categories: Economics, Politics, Technology, Tags: , , , , , , , , , ,

The New Renaissance HatJim Harper
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The Internal Revenue Service has filed a “John Doe” summons seeking to require U.S. Bitcoin exchange Coinbase to turn over records about every transaction of every user from 2013 to 2015. That demand is shocking in sweep, and it includes: “complete user profile, history of changes to user profile from account inception, complete user preferences, complete user security settings and history (including confirmed devices and account activity), complete user payment methods, and any other information related to the funding sources for the account/wallet/vault, regardless of date.” And every single transaction:

All records of account/wallet/vault activity including transaction logs or other records identifying the date, amount, and type of transaction (purchase/sale/exchange), the post transaction balance, the names or other identifiers of counterparties to the transaction; requests or instructions to send or receive bitcoin; and, where counterparties transact through their own Coinbase accounts/wallets/vaults, all available information identifying the users of such accounts and their contact information.

The demand is not limited to owners of large amounts of Bitcoin or to those who have transacted in large amounts. Everything about everyone.

Equally shocking is the weak foundation for making this demand. In a declaration submitted to the court, an IRS agent recounts having learned of tax evasion on the part of one Bitcoin user and two companies. On this basis, he and the IRS claim “a reasonable basis for believing” that all U.S. Coinbase users “may fail or may have failed to comply” with the internal revenue laws.

If that evidence is enough to create a reasonable basis to believe that all Bitcoin users evade taxes, the IRS is entitled to access the records of everyone who uses paper money.

Anecdotes and online bragodaccio about tax avoidance are not a reasonable basis to believe that all Coinbase users are tax cheats whose financial lives should be opened to IRS investigators and the hackers looking over their shoulders. There must be some specific information about particular users, or else the IRS is seeking a general warrant, which the Fourth Amendment denies it the power to do.

Speaking of the Fourth Amendment, that rock-bottom “reasonable basis” standard is probably insufficient. Americans should and probably do have Fourth Amendment rights in information they entrust to financial services providers required by contract to keep it confidential. Observers of Fourth Amendment law know full-well that the “third-party doctrine,” which cancels Fourth Amendment interests in shared information, is in retreat.

The IRS’s effort to strip away the privacy of all Coinbase users is more broad than the government’s effort in recent cases dealing with cell site location information. In the CSLI cases, the government has sought data about particular suspects, using a standard below the probable cause standard required by the Fourth Amendment (“specific and articulable facts showing that there are reasonable grounds to believe”).

In United States v. Benbow, we argued to the D.C. Circuit that people retain a property right in information they share with service providers under contractual privacy obligations. This information is a “paper or effect” for purposes of the Fourth Amendment. Accordingly, a probable cause standard should apply to accessing that data.

Again, the government in the CSLI cases sought information about the cell phone use of particular suspects, and that is controversial enough given the low standard of the Stored Communications Act. Here, the IRS is seeking data about every user of Bitcoin, using a standard that’s even lower.

Coinbase’s privacy policy only permits it to share user information with law enforcement when it is “compelled to do so.” That implies putting up a reasonable fight for the interests of its users. Given the low standard and the vastly overbroad demand, Coinbase seems obligated to put up that fight.

Jim Harper is a senior fellow at the Cato Institute, working to adapt law and policy to the information age in areas such as privacy, cybersecurity, telecommunications, intellectual property, counterterrorism, government transparency, and digital currency. A former counsel to committees in both the U.S. House and the U.S. Senate, he went on to represent companies such as PayPal, ICO-Teledesic, DigitalGlobe, and Verisign, and in 2014 he served as Global Policy Counsel for the Bitcoin Foundation.

Harper holds a JD from the University of California–Hastings College of Law.

This work by Cato Institute is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported License. Read the original article.

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