Morality of Profit

Hollowing out the Ivory Tower

"In Does Education Matter?, Wolf illustrates the absurdity of the increase-the-graduates/increase-the-growth logic by reference to the high remuneration of lawyers. That is, given lawyers’ high wages, having more lawyers would surely mean that there are more and more people earning more and more dough, and therefore in total, society is becoming more and more wealthy."

sp!ked review of books | Hollowing out the ivory tower

Diane Ravitch: Teachers' Hero or Education Hypocrite?

"Yet whatever one makes of her overall, the writing of both old and new Diane contain important and useful Hayekian insights that critics and fans (again, both old and new) who care about education would do well to consider."

Diane Ravitch: Teachers' Hero or Education Hypocrite? - Megan McArdle - Business - The Atlantic

Our Untransparent President

"This is a lesson in “trust us.” Those in power are always certain that they themselves will act reasonably, and they resist limits on their own discretion. The problem is, “trust us” is no way to run a self-governing society."

Our Untransparent President - NYTimes.com

Capitalist Ideas May be Innate

"Americans have indicated avid opposition to property rights violations throughout the course of U.S. history, whether those violations take the form of taxation, eminent domain, or “open space” laws. According to one psychologist, that sense of being wronged when one’s property rights are violated may be innate, as property ownership may be a natural-born attribute.

Scientific Evidence Proves Capitalist Ideas May be Innate

State Surplus Store

"Need a knife? A snow globe? A grenade-shaped belt buckle? Someone may have left one for you at a Texas airport."

State Surplus Store Has Your Dangerous Snow Globes, Belts - Hit & Run : Reason Magazine

Bastiat on Business - June 24, 2011

Frederic Bastiat on the redistribution of wealth, or what he describes as legal plunder.

In The Law, Bastiat explains that the redistribution of wealth is theft which has been legalized. He explains that anyone can identify legalized plunder by asking yourself the following:

"See if the law takes from some persons what belongs to them, and gives it to other persons to whom it does not belong. See if the law benefits one citizen at the expense of another by doing what the citizen himself cannot do without committing a crime."

The Law and Charity

Exerpt from "The Law" by Frederic Bastiat
Translated from the French by Dean Russell
Published by: Foundation for Economic Education - Irvington-on-Hudson, New York

You say: “There are persons who have no money,” and you turn to the law. But the law is not a breast that fills itself with milk. Nor are the lacteal veins of the law supplied with milk from a source outside the society. Nothing can enter the public treasury for the benefit of one citizen or one class unless other citizens and other classes have been forced to send it in. If every person draws from the treasury the amount that he has put in it, it is true that the law then plunders nobody. But this procedure does nothing for the persons who have no money. It does not promote equality of income. The law can be an instrument of equalization only as it takes from some persons and gives to other persons. When the law does this, it is an instrument of plunder.

With this in mind, examine the protective tariffs, subsidies, guaranteed profits, guaranteed jobs, relief and welfare schemes, public education, progressive taxation, free credit, and public works. You will find that they are always based on legal plunder, organized injustice.

The Obama Growth Gap

"America is becoming a European-style welfare state and it is unavoidable that we will suffer from European-style economic malaise."

Nobel Prize Winner Analyzes The Obama Growth Gap - Business in The Beltway - Money & Politics - Forbes

Price Gouging Laws Hurt Storm Victims

"Outrage is always cheap, disaster or no disaster, but a storm victim can’t rebuild a house with your anger. That requires labor, and it requires resources–labor and resources that don’t materialize when the price isn’t allowed to rise."

Price Gouging Laws Hurt Storm Victims - Art Carden - The Economic Imagination - Forbes

The Passionate Heart of Commerce - Doug French - Mises Daily

By: Doug French of Mises Daily

There are few movies or miniseries that depict day-to-day business as a central part of the story. Most screenwriters likely find it dull and uninteresting, believing audiences have no interest in watching how other people perform the duties that put food on their table. Moviemakers are loath to tell stories involving small-time entrepreneurs: the struggles, the long hours, the satisfaction of success, and possibly the unraveling. It's not easily done.

However, it turns out that the TV-watching public is interested in watching truck drivers haul mining equipment on Alaska's icy roads, fisherman catching crabs in the icy ocean, roughnecks working drill rigs, chefs cooking all sorts of dishes, and pawnshop dealers valuing esoteric items all the while wondering who they can sell the items to and for how much.

Entire Story HERE

ATMs = Job killers?

From: Forbes
By: Tim Worstall

Yes of course mechanisation of a task destroys the jobs of those who previously did the task. That’s the whole point of mechanising the task. So as to free up that valuable labour so that it can go and do something else. Which makes us all richer.

For now we’ve got the output from that newly mechanised task plus the outout from the new work that is being done by the newly freed labour. If our displaced teller now works in pre-school, changing diapers, then we’ve both a way of getting money from the bank and clean and smiling babies. As a society, we’re richer, for before we faced the choice of either banking services or smiling babies.

Read the entire Forbes Story HERE.

Read the original comment and contradicting employment statistics HERE.

Image Credit: Culver-Union Township website

Bastiat Yesterday, Bastiat Today, Bastiat Forever

"Bastiat was and still is very relevant. There should be no doubt Bastiat’s writings have had an important impact on the world and it is up to us to make sure he still continues to do so."

Bastiat Yesterday, Bastiat Today, Bastiat Forever | Foundation for Economic Education

Retail Innovations in American Economic History

"The retail and wholesale trade sectors were especially important parts of productivity growth in the late 1990s, and by at least one estimate, the effect of modern discount retailers had an effect on the American economy that was similar in magnitude to the effect of railroads on the American economy in the nineteenth century."

Retail Innovations in American Economic History: Newsroom: The Independent Institute

Green Shoots Bustin' Out All Over

"Get all the stimulicious economic news you can handle"

Green Shoots Bustin' Out All Over: How Much More Awesome News Can One Economy Take? - Hit & Run : Reason Magazine

Chinese Prostitutes and Brazilian Cotton Farmers

"Stimulus dollars went to fund a study on teaching Chinese prostitutes to drink responsibly....Every year, Uncle Sam gives about $150 million to Brazilian cotton farmers."

Chinese Prostitutes and Brazilian Cotton Farmers - Stossel's Take Blog - FOXBusiness.com

Yes, It Is a Police State

"Nope, I mean it. An accumulation of events in recent months leads me to no other conclusion than that we are in fact living in a police state in the good old US of A."

Yes, It Is a Police State | The Freeman | Ideas On Liberty

A Circle of Exchange is Better than a Circle of Protection

"A group of Catholic professors charged that John Boehner (and by implication every Catholic who agrees with his budgetary priorities) dissents from Church doctrine by favoring cuts to welfare programs."

A Circle of Exchange is Better than a Circle of Protection | Acton Institute

Norman Myers' Sinking Ark

"Alarmist projections fall apart as they fail to materialize. Junk theories tend eventually to be junked."

Norman Myers' sinking ark

Saving Capitalism One Fifth Grader At A Time

"Millions of ordinary people deciding what to buy and sell are smarter than even the hundred smartest people in the world.”"

» Saving Capitalism One Fifth Grader At A Time - Big Government

Book Review: Adventures in the Orgasmatron

"Most readers will be more interested in the book's social history of radical American intellectuals since World War II and its demonstration of their startling and even dangerous gullibility."

Book Review: Adventures in the Orgasmatron - WSJ.com

Free or Equal?

"Swedish economist Johan Norberg is the host of the new documentary Free or Equal, which retraces and updates the 1980 classic Free to Choose, featuring Milton and Rose Friedman."

» Reason.tv: Free or Equal? – Johan Norberg Updates Milton & Rose Friedman’s Free to Choose - Big Government

Bastiat on Business - June 17, 2011

Bastiat on "rent-seeking" (i.e. going to the government and asking for special concessions for your company or industry or protection from "unfair" competition).

This is becoming more and more popular as the government acquires more and more power. And when the scheme fails to produce wealth (as it so often does) the schemers and bureaucrats blame the free market - and the answer, they claim, is more regulation and consumer protection. A win-win for government, and a lose-lose for everyone else.

In this work, Frediric Bastiat sarcastically petitions the French government to protect all candlemakers and the related industry from unfair competition... from the sun.

The Candlemaker's Petition

We are suffering from the ruinous competition of a foreign rival who apparently works under conditions so far superior to our own for the production of light that he is flooding the domestic market with it at an incredibly low price; for the moment he appears, our sales cease, all the consumers turn to him, and a branch of French industry whose ramifications are innumerable is all at once reduced to complete stagnation. This rival, which is none other than the sun, is waging war on us so mercilessly that we suspect he is being stirred up against us by perfidious Albion (excellent diplomacy nowadays!), particularly because he has for that haughty island a respect that he does not show for us.

We ask you to be so good as to pass a law requiring the closing of all windows, dormers, skylights, inside and outside shutters, curtains, casements, bull’s-eyes, deadlights, and blinds—in short, all openings, holes, chinks, and fissures through which the light of the sun is wont to enter houses, to the detriment of the fair industries with which, we are proud to say, we have endowed the country, a country that cannot, without betraying ingratitude, abandon us today to so unequal a combat.

Be good enough, honorable deputies, to take our request seriously, and do not reject it without at least hearing the reasons that we have to advance in its support.

If France consumes more tallow, there will have to be more cattle and sheep, and, consequently, we shall see an increase in cleared fields, meat, wool, leather, and especially manure, the basis of all agricultural wealth.

Read the entire petition HERE

A real world example of rent-seeking HERE

States by GDP

"North Dakota wins the bragging rights for growing the most last year, up 7.1% from in 2009."

States by GDP: How North Dakota outpaced the U.S. economy - Jun. 16, 2011

America's Ticking Bankruptcy Bomb

"Defusing the ticking bankruptcy bomb that is threatening to explode American prosperity will require first creating another economic boom to restore traditional American prosperity. Only surging economic growth will produce the booming revenue base essential to avoiding national bankruptcy, and reduce dependency sufficiently to enable the necessary slashing of government spending."

The American Spectator : America's Ticking Bankruptcy Bomb

The Petition of the Blogmakers

"You can love the new reality or hate it, but it seems perverse to blame it on Arianna Huffington, who’s been among the few to find a viable model for turning a profit by fusing amateur contributions and paid professional content."

The Petition of the Blogmakers | Cato @ Liberty

The True Cost of 'Climate Change'

"Heavy industry in Europe faces a crippling bill for global warming, says Christopher Booker."

Industry begins to count the true cost of 'climate change' - Telegraph

Beware the Erosion of Competition

"Competition is a fact of life-the driving force of biological evolution and a constant presence in all human interactions."

Articles & Commentary

“Capture” of Regulators

"Political economists describe the process whereby government officials end up being the servants rather than the masters of the firms they are regulating as the “capture” by the industry of their regulators"

“Capture” of Regulators by Fannie Mae and Freddie Mac-Becker - The Becker-Posner Blog

Warning to America

"You’re behind us on this road, fortunately from your point of view, but government by decree, trampling on state’s rights, appointment of federal czars, shift in power from elected representatives to the unelected functionaries, you’re doing the same thing."

In the Green Room: British MEP Daniel Hannan on His Warning to America | The Foundry

The Failure Tour

"Success always starts with failure."

The Failure Tour Of New York : Planet Money : NPR

Free Trade Agreements

"Free trade is the framework upon which American prosperity rests."

Free Trade Agreements: Heritage Foundation Recommendations | The Heritage Foundation

Government “Waste” Is the Least of Our Problems

Government is destructive. Most of what it does is harmful. Being an agency of violence and the threat of violence, the institution of government runs counter to economic progress as a general principle. Even worse, its coercive grip strangles the freedom out of people as a matter of course, and, far more often than Americans seem accustomed to recognizing, it kills people.

Silent Killer

"One German organic farm has killed twice as many people as the Fukushima nuclear disaster and the Gulf Oil spill combined."

The silence of the media and activists is deafening | The Rational Optimist…

Competition, Stress, and the Rat Race

"Todd Buchholz argues that competition and striving for excellence is part of our evolutionary inheritance. He criticizes attempts to remake human beings into gentle creatures who long to return to an Eden-like serenity."

EconTalk | Library of Economics and Liberty

Scrutinize the President, not Palin

"When is this journalistic scrutiny going to be applied to politicians who wield actual power?"

Scrutinize the president, not Palin - CNN.com

Unleash the Job Creators

The Trojan Horse of 'Happiness Research'

"Now that governments supposedly know with 'scientific certainty' what constitutes 'happiness,' there can be no argument (or so they think) against virtually unlimited government intervention in the name of creating happiness."

The Trojan Horse of 'Happiness Research' by Thomas DiLorenzo

Empty Trash. Buy Milk. Forge History.

"A household list might seem a fairly modest starting point upon which to build a whole theory of economic development."

Empty trash. Buy milk. Forge history. - The Boston Globe

Absurd Energy Policy

"As the great 19th-century French economist Frédéric Bastiat pointed out, if jobs are your yardstick, you might as well go round breaking windows so as to create jobs for glaziers."

Nigel Lawson says the Coalition's absurd energy policy is damaging industry | Mail Online

Other People's Money

"Politicians don't spend your money as carefully as they'd spend their own."

Other People's Money - Stossel's Take Blog - FOXBusiness.com

In Defense of Free Market Fundamentalism

"While the vast majority of business people, who run smaller enterprises, are honest and support a civil society (and generate the majority of jobs), the captains of the largest corporations often take actions antithetical to a democratic society and their shareholders."

Christopher Whalen | Analysis & Opinion | Reuters.com

Right to Work (and to Prosper)

As Arthur B. Laffer and Stephen Moore recently noted in the Wall Street Journal, from 2000 to 2009 right-to-work states “grew faster in nearly every respect than their union-shop counterparts: 54.6% versus 41.1% in gross state product, 53.3% versus 40.6% in personal income, 11.9% versus 6.1% in population, and 4.1% versus -0.6% in payrolls.”

Full article HERE

Affording It All

"We live in a world of scarcity. Individually and collectively we want more than available resources can yield. That will remain true even as the supply of resources expands."

Affording It All | The Freeman | Ideas On Liberty

Bastiat on Business - June 10, 2011

** NEW FEATURE **

Look for a new "Bastiat on Business" post here every Friday. These posts will consist of Bastiat works, references, and quotes dealing with business, management and entrepreneurship.

We start things off with one of Frederic Bastiat's more famous, and more timeless observations - The Broken Windows fallacy. In this example, Bastiat explains away the idea that government stimulus programs or wars help employment and the economy as a whole. Think "Cash for Clunkers"...

The Broken Window

excerpt from:
Seymour Cain, trans. / George B. de Huszar, ed.
Publisher - Irvington-on-Hudson, NY: The Foundation for Economic Education, Inc. 1848

Have you ever been witness to the fury of that solid citizen, James Goodfellow, when his incorrigible son has happened to break a pane of glass? If you have been present at this spectacle, certainly you must also have observed that the onlookers, even if there are as many as thirty of them, seem with one accord to offer the unfortunate owner the selfsame consolation: "It's an ill wind that blows nobody some good. Such accidents keep industry going. Everybody has to make a living. What would become of the glaziers if no one ever broke a window?"

Now, this formula of condolence contains a whole theory that it is a good idea for us to expose, flagrante delicto, in this very simple case, since it is exactly the same as that which, unfortunately, underlies most of our economic institutions.

Suppose that it will cost six francs to repair the damage. If you mean that the accident gives six francs' worth of encouragement to the aforesaid industry, I agree. I do not contest it in any way; your reasoning is correct. The glazier will come, do his job, receive six francs, congratulate himself, and bless in his heart the careless child. That is what is seen.

But if, by way of deduction, you conclude, as happens only too often, that it is good to break windows, that it helps to circulate money, that it results in encouraging industry in general, I am obliged to cry out: That will never do! Your theory stops at what is seen. It does not take account of what is not seen.

It is not seen that, since our citizen has spent six francs for one thing, he will not be able to spend them for another. It is not seen that if he had not had a windowpane to replace, he would have replaced, for example, his worn-out shoes or added another book to his library. In brief, he would have put his six francs to some use or other for which he will not now have them.
Let us next consider industry in general. The window having been broken, the glass industry gets six francs' worth of encouragement; that is what is seen.

If the window had not been broken, the shoe industry (or some other) would have received six francs' worth of encouragement; that is what is not seen.

And if we were to take into consideration what is not seen, because it is a negative factor, as well as what is seen, because it is a positive factor, we should understand that there is no benefit to industry in general or to national employment as a whole, whether windows are broken or not broken.

Freedom in the 50 States

"This study comprehensively ranks the American states on their public policies that affect individual freedoms in the economic, social, and personal spheres."

Freedom in the 50 States | Mercatus

David Mamet Turns Right

"Mamet reevaluated his own heroes, starting with the playwright Bertolt Brecht, whom he now describes as “a show dog of communism,” who theatrically criticized capitalism even as his royalties allowed him to live comfortably on capital deposited in a Swiss bank account."

FIELDS: David Mamet turns right - Washington Times

Reaffirm Economic Freedom

"According to The Heritage Foundation’s Index of Economic Freedom, an annual data-driven economic policy analysis, sub-Saharan African economies, as a group, have gradually moved toward greater economic freedom over the past decade."

African Growth and Opportunity Act Forum: Reaffirm Economic Freedom | The Heritage Foundation

Assault On Private Property

"Your property is guilty until you prove it innocent."

Civil Forfeiture Laws And The Continued Assault On Private Property - Forbes.com

Firms to Cut Health Plans as Reform Starts

"Once provisions of the Affordable Care Act start to kick in during 2014, at least three of every 10 employers will probably stop offering health coverage, a survey released Monday shows."

Firms to cut health plans as reform starts: survey - MarketWatch

The Untouchable Case for Indian Capitalism

"The plight of the Dalits, those whom the Hindu caste system considers outcastes and hence Untouchables, was a rallying cry of Hindu reformers and Indian leftists for half a century. But today these victims of the caste system are finding that free markets and development bring advancement faster than government programs."

B. Chandrasekaran: The Untouchable Case for Indian Capitalism - WSJ.com

Protectionism: The Wolf in Sheep's Clothing

"If the cheaper producers were home-grown, we'd call it competition and judge it a good thing. Is it any different, just because they happen to come from another country?"

Protectionism: the wolf in sheep's clothing

Different Decisions

"Why are teachers so bold when banks are so cautious? The banks pay a price for being wrong. Teachers don't."

Different Decisions - HUMAN EVENTS

Economic Analysis and the Great Society

"In short, the Great Society amounted to social engineering—or worse, to sheer, groping social experimentation—on a grand scale. People ought not to have been surprised when its attainments failed to match its pretensions."

Economic Analysis and the Great Society: Newsroom: The Independent Institute

Mind Boggling Chart of the Day

"Yes, it really is saying that the bottom 5% in the USA have a higher income, a higher standard of living, than the top 5% of Indians."

Mind boggling chart of the day

Housing Stats Don’t Tell Full Story

"...we think it’s time for the main focus of economic policy to shift from an emphasis on government intervention via stimulus spending, bailouts and artificial incentives to an emphasis on the fundamentals of promoting free markets, free trade and a regulatory and tax system that is friendly to entrepreneurs, innovation and risk-taking."

Housing stats don’t tell full story - SignOnSanDiego.com:

The Vanguard of the Universities Revolution?

"As Ivor Roberts recently explained in a Spectator cover piece, the idea is catching that our best universities should go it alone and sever their connections with the state and its demands."

The vanguard of the universities revolution? | The Spectator

Goodbye Jobs, Hello QE3?

"It's official: Most economists have been way too optimistic about pace of the economic recovery. Will the latest jobs numbers spur the Fed to act again?"

Goodbye jobs, hello QE3? - The Term Sheet: Fortune's deals blog Term Sheet

The Bourgeois Virtues and Disaster Relief

"Well P&G is at it again, this time in the aftermath of the recent tornadoes."

The Bourgeois Virtues and Disaster Relief, Joplin Version - Coordination Problem

Why Success Always Starts With Failure

Forbes.com Video Network | Booked: Why Success Always Starts With Failure

Any Way You Stack It

"If you stack up 14.3 trillion dollar bills, the pile would stretch to the moon and back twice."

Any Way You Stack It, $14.3 Trillion Is A Mind-Bender : NPR

What Is a College Education Really Worth?

"Did Peter Thiel pop the bubble? That was the question on the minds of parents, taxpayers and higher education leaders late last month when the co-founder of PayPalannounced that he was offering $100,000 to young people who would stay out of college for two years and work instead on scientific and technological innovations."

What is a college education really worth? - The Washington Post

Bastiat Quote of the Week

Provided that his person was respected, his labor was free, and the fruits of his labor were protected against all unjust attack. When successful, we would not have to thank the state for our success. And, conversely, when unsuccessful, we would no more think of blaming the state for our misfortune than would the farmers blame the state because of hail or frost.

- Frederic Bastiat, The Law

An island of economic sanity in a sea of socialism

So You Think You Can Dance?

See the full video HERE