Thursday, January 31, 2008

Stephen Moore at February Meeting

Stephen Moore, member of the editorial board and senior economics writer for The Wall Street Journal will be our speaker at the next monthly meeting of the Bastiat Society.

Mr. Moore focuses on economic issues, including budget, tax and monetary policy. A frequent contributor to the Journal over the years, Stephen has also written for Human Events, Reader's Digest, Chief Executive Magazine, and many other publications.

He was the founder and first president of the Club for Growth, which raises money for political candidates who favor free-market economic policies. Just prior to joining the Journal, Stephen was president of a new organization, the Free Enterprise Fund (founded by Bastiat Society board member Mallory Factor).

He has appeared on many national TV shows, including CNN's Inside Politics, Crossfire, and Moneyline, NBC's Nightly News, Fox Morning News, and The McLaughlin Group. Stephen has served as a senior economist on the Congressional Joint Economic Committee, as a budget expert for the Heritage Foundation, and as a senior economics fellow at the Cato Institute, where he published dozens of studies on federal and state tax and budget policy.

He was research director for President Reagan's Commission on Privatization. He is the author of five books, including (with the late Julian Simon) "It's Getting Better All The Time: 100 Greatest Trends of the Past 100 Years" and most recently "Bullish on Bush: How the Ownership Society Is Making America Richer." He graduated from the University of Illinois and holds a masters degree in economics from George Mason University.

DATE: Thursday, February 7th

TIME: 5pm Hors d'oeuvres & 6pm Presentation

LOCATION: Imaging Arts Gallery, 175 King Street, Charleston

Please RSVP here:

Wednesday, January 30, 2008

900 Pages in Under 6 Minutes

On The Daily Show, P.J. O'Rourke summarizes 900 pages of Adam Smith's magnum opus, The Wealth of Nations, first published in 1776.

His unique insight? The market decentralizes our badness.

Tuesday, January 29, 2008

Free Trade and a Misty Moon

Popular entertainment is filled with heroes, superheroes, and messiahs, none of whom are in business.

Outside of the novels of Ayn Rand, the closest characterization I've been able to find of the businessman as hero is in the character of a smuggler -- a not wholly inappropriate place.

The lines below come from the only popular song to celebrate free trade. They are sung by Irish smugglers in the musical Eileen. The title of the song is "Free Trade and a Misty Moon."

While Heaven sends us a misty moon,
Sure, why not take it as a gracious boon?
If France and Spain have somethin' we can use,
Faith, 'twould be ungracious to refuse!
So, free of tax or duty
We'll fetch ashore our booty!
Let's drink to the mist o'er the moon!

Monday, January 28, 2008

How the World Has Changed

For the generation in college today, 1994 is ancient history. This clever spoof of the television series 24 reveals just how much has changed between then and now.

Notice that the differences are all in consumer products: pagers, telephones, Internet access, personal computers and printers.

Sunday, January 27, 2008

Payday Lending

Is payday lending a scourge or consumer benefit? The debate is often tilted in favor of those who believe it is a scourge. However, here is an NPR broadcast that does a nice job of giving both sides of the story.

Listen to it here.

Saturday, January 26, 2008

A Freer, Richer World

At a time when every politician in the United States promises to do something to get the economy moving, John Stossel reminds us what really works...

This week's newspapers are full of predictions of an impending recession, and maybe they're right. But the great untold story is the good news: the worldwide boom in economic growth.

"I think one of the best kept secrets is that the world is in the midst of an economic boom, and it is largely driven by increases in economic freedom," says economics professor James Gwartney, director of the Stavros Center for the Advancement of Free Enterprise and Economic Education at Florida State University. "The world has become more free, and, at the same time, growth is soaring to new highs. During 1995 to 2005, the growth rate of per capita GDP in 99 countries for which data are available has increased to 2.2 percent, nearly twice the rate of recent decades. Since 2000, the annual growth rate of per capita GDP has been even more rapid, 3.2 percent."

As the world gets freer, says Gwartney, it gets richer.

Friday, January 25, 2008

More on "Creative Capitalism"

From Cafe Hayek by Don Boudreaux of George Mason University...

Bill Gates's call, in Davos, for "creative capitalism" is getting much press. Here's a letter on this matter that I sent yesterday to the Wall Street Journal:

To the Editor:

I'm delighted that Bill Gates is reading the important work of the late Julian Simon ("Gates Calls for Kinder Capitalism," January 24). When he digests Mr. Simon's central idea - that human beings in market economies are "the ultimate resource" - Mr. Gates might then recognize that there is no need to change capitalism so that it becomes "creative." Capitalism has always been creative. It is inherently creative.

Everything from apparently mundane pencils and stocked supermarket shelves to obviously complex skyscrapers and personal computers are astonishingly complex artifacts created by human ingenuity unleashed, as only capitalism can unleash it, to experiment, cooperate, and compete. No philanthropist, no government body or commission, no Great Leader - no matter how "creative" or "kind" - has done one-trillionth as much to give dignity and comfort to ordinary people as has capitalism. It doesn't need re-inventing or to be made kinder; it just needs to be spread more widely around the world

Thursday, January 24, 2008

Creative Capitalism

In today's Wall Street Journal, Bill Gates previews his speech on "creative capitalism" that he will give at Davos later today.

An excerpt and video...

Free enterprise has been good to Bill Gates. But later today, the Microsoft Corp. chairman will call for a revision of capitalism.

In a speech at the World Economic Forum in Davos, Switzerland, the software tycoon plans to call for a "creative capitalism" that uses market forces to address poor-country needs that he feels are being ignored.

Outgoing Microsoft Chairman Bill Gates talks to The Journal's Rob Guth about his concept of creative capitalism. (Jan. 23, 2008) "We have to find a way to make the aspects of capitalism that serve wealthier people serve poorer people as well," Mr. Gates will tell world leaders at the forum, according to a copy of the speech seen by The Wall Street Journal

If I were at Davos and had a chance to chat with Bill, here is what I would ask...

By calling for "creative capitalism," aren't you implying that we now practice something else? Perhaps "shock capitalism" a la Naomi Klein, or "indifferent capitalism?"

If "creative capitalism" is not something entirely new, but really a wider application of the moral order of market forces, why discredit it by pretending it's something new?

In the 1960s, policy makers and intellectuals thought they could lift poor countries out of poverty by building big infrastructure and industrial projects like airports, steel mills and highways. Most of these failed. It was an expensive lesson. While technology is certainly important, have you considered the possibility that proposing technology as the first step to reduce poverty may be making the same mistake? Are there other issues that should be addressed first?

You've read Hernando de Soto's book The Mystery of Capital, yet you don't mention legitimizing property rights of the poor as the first step towards prosperity. Do you disagree?

You say the rate of improvement for the poor is very slow, while the rate of improvement for the well-to-do is very fast. However, from 1970 to 2000, 250 million people in China moved above the poverty line. During the same period in India, 140 million people escaped poverty. The rapid success at reducing poverty in these countries didn't come from technology, foreign aid, charity or philanthropy. It came from reducing internal controls that prevented an economy ordered by market forces rather than one ordered by mandarins and technocrats. Have you considered this in your philanthropic planning?

In the developed world, businesses that serve the poor are often vilified as greedy exploiters, e.g., pawn shops, payday lenders, check cashing services, and auto-title lenders. Why do you believe for-profit businesses operating in poor countries would be viewed favorably, when those kinds of businesses are often denounced as "predatory" when they are successful? Isn't the real problem a gross misunderstanding of the morality of exchange, not the lack of market opportunities for that exchange?

Wednesday, January 23, 2008

Waging the War of Ideas

One of the first free market think tanks in the world was founded by a businessman, Sir Antony Fisher. He founded the Institute of Economic Affairs in London in 1955.

In this audio file about his book Waging the War of Ideas John Blundell discusses the work, objectives and history of the Institute of Economic Affairs. The file can be downloaded and played on a computer or mp3 player. The the full text and summary of John Blundell's monograph, Waging the War of Ideas can also be downloaded.

Listen to it here.

Tuesday, January 22, 2008

It That Must Not be Named

Some historical perspective and humor from Bruce Yandle of Clemson University. So much for talking up the economy...

Funny thing about the R word ("Recession"). There was a time during the Carter Administration when fear of recession was more than the president could stand. Apparently, he believed a recession could be avoided if none of his officials used the word in testimony or discussion with the press. In a word, they were muzzled.

Bruce MacEwen, creator and host of Adam Smith, esq, ( tells how Mr. Carter’s regulatory czar and head of the Civil Aeronautics Board Alfred Kahn dealt with the muzzle. Not one to be cornered when it came to talking, Fred Kahn was called to the Hill to testify about the economic outlook.

When asked point blank about the prospects for a recession, Fred, somewhat floored, remembered his instructions and noted that he could not speak directly to the question, but that he did expect there might be a “banana.” Banana then became the Washington code word for recession. Bruce MacEwen tells us that when the banana industry complained, Fred Kahn changed the code word to “cumquat.” The cumquat lobby was less effective in avoiding the hit.

Monday, January 21, 2008

Poor Stimuli

Political plans to stimulate the economy are frequently more popular than effective. Russ Roberts, an economics professor at George Mason University, offers commentary on NPR that puts campaign promises in proper perspective.

An excerpt:

The money has to come from somewhere. If you raise taxes to fund the plan, the people who are taxed are poorer and they'll spend less. If you borrow money to fund the plan, the people who buy the government bonds have less money to spend and that offsets the stimulus. It's like taking a bucket of water from the deep end of a pool and dumping it into the shallow end. Funny thing—the water in the shallow end doesn't get any deeper.

Sunday, January 20, 2008

A Good Clean Business

From Bruce Yandle of Clemson University, a story of entrepreneurial success that really cleaned up the human race.

"Mr. Kohler’s Tub"

I can’t end this special report without putting in a word for entrepreneurs who make life so much better for all us. This one is John Michael Kohler, an Austrian immigrant who settled in Sheboygan, Wisconsin, in 1873.

Had a bath lately? This was quite a luxury for most of recorded history. In fact, it is said that only one percent of U.S. homes had indoor baths with running water in 1921. The Saturday scrub, if it came that often, was in a steel tub in front of the fire, or in the back yard for men.

All this had begun to change in 1883 when John Michael Kohler decided to add a coat of enamel to one of the cast iron horse troughs he made in his foundry. He then added claw feet to make the first enameled bathtub. With that, things began to get better on the home front. Well they at least got cleaner. Never satisfied and always creative, Mr. Kohler also invented the bubbler drinking fountain.

A visit to Kohler, Wisconsin, a model city and home of the company, sounds like a promising idea. Among the sites recommended is a museum that houses a full array of Kohler’s early plumbing products. The line up along one wall is called the Great Wall of China.

Saturday, January 19, 2008

Evolutionary Economics, Part IV

Part IV of Michael Shermer's lecture on Evolutionary Economics...

Friday, January 18, 2008

Evolutionary Economics, Part III

Part III of Michael Shermer's lecture...

Thursday, January 17, 2008

Evolutionary Economics, Part II

Part II of Michael Shermer's lecture...

Wednesday, January 16, 2008

Evolutionary Economics, Part I

A lecture by Michael Shermer at "The Amazing Meeting 5" on how the "invisible hand" of the market is to economics as "natural selection" is to evolution... or rather how they're actually the same.

Tuesday, January 15, 2008

Worse Than the Mob

Business is evil...

According to a study by the Media Research Center that examined 129 episodes of 12 major network shows during the May and November sweeps of 2005, corporate folks were 21 times more likely to commit a kidnapping or murder than mobsters, five times more likely than terrorists, and four times more likely than gang members. And if that's not enough of a black eye for the business community, Kevin Spacey -- one of a growing roster of Oscar winners who aren't ashamed of a comic book adaptation (and why should they be?) -- says he based his Superman Returns' villain, Lex Luthor, on Enron's Kenneth Lay.

Monday, January 14, 2008

Money and Capitalism

This well-done video makes an important distinction between the capitalism of free men and women, and "fraud ridden, government entwined" business.

Sunday, January 13, 2008

Change We Can Believe In

Listening to all the candidates prattle on about "change," I am reminded of St. Augustine's prayer for chastity: "Lord, make me chaste. But not just yet."

I don't think these people really want change. If they did, they would be capitalists. Capitalists appreciate the kind of change that is most likely to bring the greatest benefits to the largest number of people. Capitalists understand how change comes from men who have the freedom to act, experiment, and make mistakes. If change is to be something more than a new set of rules administered by a new set of rulers, if it is going to truly be the discovery of something new and better, it must begin with confidence in a social order based on human freedom.

I don't hear any of these candidates talking about freedom as the first step to change. Their vision of change is dogmatic. It is not the change of free men. That would be ungovernable. What they offer is a change of masters.

The capitalist wants freedom first, and accepts change as a consequence. He knows that the only unacceptable outcome of freedom is the loss of freedom itself.

Saturday, January 12, 2008

Treat Business Like Bees

Jonah Goldberg, author of Liberal Fascism: The Secret History of the American Left from Mussolini to the Politics of Meaning, explains how government efforts to "fight" business end up blurring the distinction between the two.

From National Review:

What progressives, then and now, always fail to recognize is that the more government meddles in business, the more business meddles in government. The left thinks the rational response to the bear hug that business has around government is to hug back twice as hard. The real answer is to let go, let companies sink or swim. Don’t render them “too big to fail” because they provide health care or other benefits.

All of these people who want to “crack down” on big business are simply inviting companies into the tent, giving them incentives to buy politicians, votes and policies. Yes, end the subsidies. But also stop trying to use business as government by proxy. Of course, some minimal standards of conduct need to be enforced. But beyond that, it’s better to treat business like bees. If you don’t bother them, they won’t bother you.

Friday, January 11, 2008

What is the Bastiat Society?

Periodically, for the benefit of new visitors to this site, I like to explain the purpose of the Bastiat Society.

To put it simply, the Bastiat Society exists to remind business people that their idea of what is good must include, first and foremost, the noble work they do everyday, creating wealth, creating jobs, and solving the problems of other people.

Thursday, January 10, 2008

A Positive Reading of American History

From an Economist review of Morton Keller's new book on American history, an encouraging conclusion for a populace suffering from a Presidential campaign that has gone on too long and with too little civility...

His conclusion is that: “This is still a Republic worth keeping, with a polity capable of doing the job.” Despite the waste and folly of its bureaucracy, despite the slander and polarisation of its election campaigns, America's system of government is extraordinarily robust and flexible. Though everyone grumbles that politicians are out of touch, both Republicans and Democrats in fact respond swiftly to shifts in the national mood. Mr Keller reckons that the biggest challenge facing the two parties is that young voters no longer inherit their parents' political loyalties. In 1984 voters under 30 were the most Republican age group; in 2004 they were the most Democratic. This is surely good: each generation should decide for itself.

Wednesday, January 9, 2008

Milton Friedman Smacks Naomi Klein!

The Five Sorry Rules of Lateness

From Michael Munger, Chair of Political Science at Duke University, something every business person can appreciate: The Five Sorry Rules of Lateness.

Rule 1. The busier the person, the less likely he or she is to be late.

Rule 2. The closer my office is to the room, the later I arrive at the meeting.

Rule 3. The first will be last.

Rule 4. If you've never missed a plane, you spend too much time in airports.

Rule 5. If you have never been early, it's no accident.

Late people are different. If you are always late, then that's bias, not error. How do you tell if this is you? It's not hard. Do you consistently walk into meetings breathing heavily, and say, "Oh, sorry I'm late. You wouldn't believe what happened this time. I had to [insert improbable events here]."

Of course, you were also late last time, for other improbable reasons. Since the reasons are different, you think there is no pattern. But there is. Oh, there is. Late-niks always time it so that if (a) there is no traffic, (b) they catch every light green, (c) they find a parking space right at the front door of the building, and (d) they left the meeting folder on top of their desk in plain view, then they would be just 10 seconds late.

But "something goes wrong:" traffic, red lights, no parking, folder under pile of papers. Now,these are all actually predictable parts of life, not hundred year floods. If you are always late, though for different reasons, then those reasons are no reasons at all.

So, rules 4 and 5 work together: If you have never been late, you are wasting your time. If you have never been early, you are wasting other peoples' time.

Tuesday, January 8, 2008


Colbert interviews "blue collar brute" Richard Freeman of Harvard University on unions, capitalists, chickens and eggs.

Monday, January 7, 2008

The Way Science Works

Modern science likes to think of itself as far above the superstition, intuition, and lucky hunches of the hoi polloi.

The reality is, scientists are fully paid-up members of the human race. They do, in fact, think like the rest of us. As Michael Shermer points out in Scientific American, many scientific discoveries begin with something like the thought, "Gee, that's weird." The resulting path of trial and error discovery, intuition, hunches and (yes) even superstition, in hindsight, gives the scientific process far more empirical certainty than it really had.

Shermer's article reminded me of F. A. Hayek's 1952 book, The Counter Revolution of Science, wherein he made the case that intellectuals were guilty of a terrible mistake when they tried to use what they thought was the methodology of science to explain complex social phenomenon like markets.

This "abuse of reason" was dangerous because, among other things, there was a considerable difference between the methods scientists said they used and the ones they actually used. In effect, Hayek argued, scientific method was developed ex post, not ex ante.

As Hayek wrote," The methods which scientists or men fascinated by the natural sciences have so often tried to force upon the social sciences were not always necessarily those which the scientists in fact followed in their own field, but rather those which they believed that they employed. This is not necessarily the same thing. The scientist reflecting and theorizing about this procedure is not always a reliable guide."

Saturday, January 5, 2008

The Human Costs of Border Control

Peruvian economist Hernando de Soto regularly makes the point that most people in developing countries don't want to live in the shadows of the legal economy; they are forced to do so by high social barriers that prevent them from acquiring legal title to property.

The same argument is true when discussing the topic of immigration. Very few immigrants want to be illegal. The vast majority would immigrate legally, if only the social barriers to legal immigration weren't so high.

Simply put, when the law does not accommodate human nature, human nature will seek accommodation outside the law.

Immigrants are not driven by the desire to cheat and steal something from another country. They are driven by the universal human desire to improve one's situation and the situation of one's family.

The solution to the problem of illegal immigration does not lie in making immigration more difficult or time-consuming. Such an effort will, in fact, only make illegal immigration more expensive and more dangerous. Consider this table from the Economist. Ten years ago, crossing the border from Mexico to Arizona cost about $350. Now, it costs as much as $3,000.

The solution to illegal immigration is to make it easier to immigrate legally. That is the only humane response to poor people from around the world who are willing to risk everything to build a better life in a new country.

Thursday, January 3, 2008

Kathy Gornik on Free Trade

Kathy Gornik, president of co-founder, discusses the importance of international trade and how it has help grow Thiel Audio.

Wednesday, January 2, 2008

Thiel Audio on Why Lou Dobbs is Wrong

Kathy Gornik, president and co-founder of Thiel Audio, discusses why Lou Dobbs is wrong on trade.

Kathy is also the recipient of the first Bastiat Award in Business. The Bastiat Award in Business is given to a business person who demonstrates his or her commitment to the social and moral benefits of individual liberty and free trade.