Who Said It?

1. "Every man holds his property subject to the general right of the community to regulate its use to whatever degree the public welfare may require."

2. "All rights are derived from the purposes of the society in which they exist."

3. "True individual freedom can't exist without economic security...the right to a useful and remunerative job...a decent home...good health...and a good education."

4. "In a country where the sole employer is the state, opposition means death by slow starvation. The old principle, 'Who does not work shall not eat,' has been replaced by a new one: 'Who does not obey shall not eat.'"

5. "Property doesn't have rights, and people don't either."

6. "The fundamental principle of Socialism, which would make all possessions public property, is to be utterly rejected because it injures the very ones whom it seeks to help."

7. "The Soviet growth rate generally exceeded that of the United States in the post-World War II period as a whole."

8. "In 1989, per capita income was higher in East Germany than in West Germany."

9. "In 1980, East Germany's GDP per capita was higher than Japan's."

10. "A constitution is not intended to embody a particular economic theory, whether of paternalism and the organic relation of the citizen to the State, or of laissez faire."

Answers:

1. President Theodore Roosevelt, 1910.

2. Justice Louis Brandeis of the Supreme Court of the United States, 1921.

3. President Franklin D. Roosevelt's State of the Union Address, 1944.

4. Leon Trotsky, one of the leaders of the Russian October 1917 Communist Revolution.

5. Nadine Strossen of the NYU School of Law and the ACLU, 1993, pointing out that if people don't have property rights, they don't have any rights.

6. Pope Leo XIII in Rerum Novarum, 1891.

7. America's best-selling economics textbook, 1987.

8. The Statistical Abstract of the United States, 1989.

9. The Statistical Abstract of the United States, 1989.

10. Justice Oliver Wendell Holmes of the Supreme Court of the United States in the 1905 Lochner case, where he wrote a dissenting opinion that property rights -- a mere "economic theory" -- were not protected by the Constitution.

Source: The Noblest Triumph: Property and Prosperity Throughout the Ages, by Tom Bethell

The Private Property Solution

"Normally it is said that if population trends continue, starvation will result, resources will be depleted, and the environment ravaged. But private property solves all these problems. It is in the thinly populated countries, where property is communal by custom or controlled by the state -- Somalia, Ethiopia and Sudan, for example -- that we have seen the worst of famine and environmental destruction. Countries that do not enjoy secure and transferable private property will certainly remain backward, however. That is because human nature is everywhere the same."

From The Noblest Triumph: Property and Prosperity through the Ages, by Tom Bethell

History and Humiliation

Historians used to search through piles of dry facts looking for a grand underlying law of history, one that could shape years, even centuries of human action and make the future as predictable as the sum of two numbers. They failed.

Not only did they fail, but they ended up contributing to some of humanity's darkest chapters. Fascism and Communism were both products of the attempt to create a "science of history."

Perhaps historians have finally learned that history is simply the record of the way people react to their surroundings. Any apparent cycles in history have less to do with predictable laws and more to do with universal human nature. Consider how three once proud and mighty civilizations responded after suffering a humiliating military defeat.

From the 8th century AD to the middle of the 13th, the Arab world enjoyed the world's most successful civilization. It was the center of learning, art, commerce and religious tolerance. Over the next eight hundred years, it suffered one stunning defeat after another, first at the hands of the Mongols, then at the hands of European colonial powers, and finally at the hands of the tiny state of Israel, carved out of Arab land and created by the Western powers.

How did Arab civilization respond? It institutionalized violence, xenophobia, and racism.

In the late 19th and early 20th century, many Western intellectuals pointed to the new German state as an example of a progressive, scientific government. Then came its crushing defeat in WWI and the humiliating Treaty of Versailles.

How did Germany respond? It elected Adolph Hitler.

In 1820, China was the largest economy in the world. Trade with Britain left the British with a huge trade deficit, and the British decided to solve that problem by selling Indian opium in China.

The Chinese responded with their own version of the Boston Tea Party: they sank some of the British ships. Britain retaliated with the First Opium War, which ended in a humiliating Chinese defeat. The Chinese army was simply no match for modern weapons.

China tried to rebel again, and it lost the Second Opium War. Over the next forty years, two more Chinese rebellions were unsuccessful, leaving China at Britain's mercy.

Then came the Japanese, a nation China had long considered inferior, but one that had made the decision to modernize its industry and military after its own string of European colonial humiliations. After the end of WWII and the end of its own civil war, China finally regained control of its destiny under the Communist leader Mao Tse Tung, "the Great Helmsman," who promised to restore China to its greatness with a planned economy. It didn't work.

After the death of Mao, Deng Xiao Peng abandoned a planned economy in favor of old-fashioned capitalism with a Chinese twist. He said, "I don't care if the cat is black or white, only that it catches mice."

Deng was a pragmatist, not an ideologue like Hitler or Mao, nor a zealot bent on revenge like Osama Bin Laden. Deng correctly reasoned that the best way to recover from China's humiliation at the hands of the West was to unleash the talent, energy, and self-interest of the Chinese people. Make money, not war.

In two of the three cases, the desire for revenge led to war and more suffering. In one, the desire for respect led to a dramatic increase in wealth and peaceful world trade.

Both desires reside in all human hearts. The question for all of us is, which one shall we satisfy?

"Give Me Liberty"

The picture below is of an engraved stone on the exterior base of the Chicago Tribune Tower on Michigan Avenue. It is a quotation from Areopagitica by John Milton (1608-1674), one of the most famous arguments for freedom of speech.

Although some say Milton composed his tract in response to the severe criticism he received for his publications arguing in favor of the freedom get a divorce, his plea for freedom of speech still resonates today, especially when we attempt to discuss the most contentious issues of our day: global warming, globalization, health care, wealth creation, wealth distribution, and the social responsibilities of business.

The Ghost of 1969

In 1969, the United States enacted the Alternative Minimum Tax (AMT). The AMT was a rapid-fire political response to a newspaper story that 155 high income individuals legally paid no income taxes.

Since 1969, the US has had not one, but two income tax codes: the regular tax and the AMT. A taxpayer has to calculate his or her income taxes twice, and pay the greater of the two taxes.

The AMT was built and deployed to catch just a handful of people. These people were not criminals. They had complied with the law as it was. They were just very good at legally avoiding the income tax.

In 1969, they discovered that their success had made them a political target. But the target was small, and no one else cared. Today, that target is much bigger.

According to Ira Weiss of the University of Chicago, the AMT will affect 30% of American taxpayers this year. These taxpayers will find themselves in a Kafkaesque world of English language sentences that make no sense. These modern taxpayers are paying the price for the class warfare, envy and political expediency of 30 years ago. If ever there was a case for why we should be cautious before letting the government fight all our fights, right all our wrongs (both real and imagined), and pander to our most selfish instincts, the AMT is it.

Crusading for justice, the government created greater injustice. In the name of fairness, it destroyed what is fair. In the name of the people, it loots the property of an ever larger number.

The ghost of 1969 haunts us today, no longer imaginable as the face of justice. We can see it for what it really is.

George Will on Government

According to George Will, conservatives understand that the government's job is to deliver the mail, defend the shores, and get out of the way.

And, in a priceless quip, the lungs are not the seat of wisdom.

The Flat Tax,

The US tax code is horribly complex, needlessly wasteful, socially unfair and economically destructive.

What's the alternative? Around the world, some of the fastest growing small economies owe their prosperity to a flat tax. In this video, Dan Mitchell of the Cato Institute presents a quick survey of the global flat tax revolution.

The Quotable Frédéric Bastiat

"When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe."

The Ministry of Happiness

In his book The Moral Economy of Labor, Dartmouth professor James Bernard Murphy argues that business, as it is currently practiced, is an obstacle to human happiness. His solution is to reorganize everything, from the division of labor to ownership and control.

Who should spearhead the grand redesign of our economy? Why, a government agency, of course. Murphy writes:

"Government should be concerned with the distribution of meaningful work not because of a putative right to such work but simply because meaningful work is so fundamental to human happiness and well-being. How should government go about the business of enhancing the opportunities for self-realization in work? The obstacles to self-realization are so deeply rooted in the institutions of our economy that only profound changes in the ownership and control of industry can create the opportunity for greater access to meaningful work. Government can play a significant though indirect role supporting institutional change in our economy -- change that might well be desirable even apart from its role in helping to create meaningful jobs."

He should just call it what he wants it to be: The Ministry of Happiness.

This is a prime example of the intellectual threat to business. This is not the scribbling of some isolated philosopher. He teaches students at one of the most prestigious colleges in the world. His ideas influence the teaching of business and business ethics in many more universities around the world.

Here, a man who has never run a business presumes to recreate not just one business, but the whole social order.

A Threat to Freedom

President of the Czech Republic Vaclav Klaus criticizes modern environmentalism as a dangerous threat to freedom and prosperity.

Nobel Laureate James Buchanan on Change

At a time when "Change" seems to be everyone's political slogan, it is a healthy exercise to listen to James Buchanan, a man who truly changed the world for the better.

In this lecture, you will find neither inspiring but vague promises nor soaring rhetoric, but you will find a brilliant mind expressing itself in an authentic Tennessee voice.

Nobel laureate Buchanan speaks at the 2007 Social Change Workshop hosted by the Institute for Humane Studies.

Wasting Money

In his novel Anna Karenina, Leo Tolstoy (1828-1910) said wasting money is like drink to a drunkard. The first time it might hurt, the second time is easier, and the third time...well, you should read it yourself.

In this passage, the character Levin realizes that he and his wife are spending money they do not have. Perhaps this experience is common in capital cities everywhere.

"Only during the first days of his stay in Moscow Levin had been struck by the expenditure, strange to one living in the country, unproductive but inevitable, that was expected of him on every side. But by now he had grown used to it. That had happened to him in this matter which is said to happen to drunkards--the first glass sticks in the throat, the second flies down like a hawk, but after the third they're like tiny little birds. "

June 2008 Meeting

"Beyond Incentives Matter: Ideas and Institutions in the New Economics of Politics"

Professor Ed Lopez
Wednesday, June 4th

Imaging Arts Gallery

175 King Street

Charleston, SC

843-577-7501

5:00 pm Reception 6:00 pm Speaker

RSVP to Megan Rock

Professor Lopez's presentation will focus on the power and the limitations of incentives in bringing about beneficial political change. Economists have done a masterful job communicating to mass audiences the central idea that "incentives matter". But policies designed to incorporate this idea present two kinds of problems.

First, certain trends suggest policymakers can badly apply the idea or take it too far, resulting in ineffectual policies that increase tax burdens or decrease individual liberties. Many types of "nanny state" policies fall into this problem. Also, some policies that would be beneficial by the use monetary incentives are prohibited because people find them repugnant. An extremely important example is monetary compensation for vital organ donation. Both sorts of problems suggest examining the institutional context within which incentives take shape, as well as the popular beliefs and values that constrain institutions.

Incentives matter in politics, yes, but in limited ways. Understanding the contours of those limitations is critical to bringing about beneficial political change.

About the Speaker:

Edward J. López is Associate Professor of Law and Economics at San Jose State University, and currently Scholar in Residence at Liberty Fund in Indianapolis. He earned a B.S. in economics from Texas A&M University, and an M.A. and Ph.D in economics at George Mason University in 1997. He previously taught economics at the University of North Texas and George Mason University, and he served as staff economist on the Joint Economic Committee of Congress. Professor López's main area of research is in public choice and law and economics, with emphases on entrepreneurship, creative expression, voting, political ideology, and political institutions. He has also published articles on antitrust regulation, property rights, campaign finance, term limits, and fiscal policy. Currently Professor Lopez is editing one book on the application of public choice theory to the legal system, titled Law without Romance, and is also co-authoring a book, with Dr. Wayne Leighton, about public choice and social change for a popular audience.

Human Dignity

Biomedicine -- like business -- is often criticized as a dehumanizing enterprise. Indeed, the two fields often overlap, with biomedical products researched, produced and distributed by for-profit companies.

The arguments against biomedicine rest on a campaign for human dignity. But behind those noble-sounding words stands an effort to control a stunning variety of peaceful human behaviors.

In The New Republic, psychologist Stephen Pinker of Harvard explains how political attempts to limit biomedical research in the name of human dignity have taken a bizarre and authoritarian turn. Who knew licking an ice cream cone in public was beneath human dignity?

Two excerpts:

"The price of freedom is tolerating behavior by others that may be undignified by our own lights. I would be happy if Britney Spears and "American Idol" would go away, but I put up with them in return for not having to worry about being arrested by the ice-cream police. This trade-off is very much in America's DNA and is one of its great contributions to civilization: my country 'tis of thee, sweet land of liberty."

And:

"In a free society, one cannot empower the government to outlaw any behavior that offends someone just because the offendee can pull a hypothetical future injury out of the air. No doubt Mao, Savonarola, and Cotton Mather could provide plenty of reasons why letting people do what they wanted would lead to the breakdown of society."

Tolstoy on Wealth and Justice

From Anna Karenina by Leo Tolstoy (1828–1910), a dialogue on wealth and justice between three aristocratic Russians. It takes place in a barn at the end of a day of hunting. The characters are Stepan Arkadyevitch Oblonsky, a married playboy; Levin, an intellectual with socialist inclinations and brother-in-law of Oblonsky; and Vassenka Veslovsky, a new acquaintance of the other two men.

The text is from Literature Network.

Malthus was a well-known capitalist, who had made his money by speculation in railway shares. Stepan Arkadyevitch described what grouse moors this Malthus had bought in the Tver province, and how they were preserved, and of the carriages and dogcarts in which the shooting party had been driven, and the luncheon pavilion that had been rigged up at the marsh.

"I don't understand you," said Levin, sitting up in the hay; "how is it such people don't disgust you? I can understand a lunch with Lafitte is all very pleasant, but don't you dislike just that very sumptuousness? All these people, just like our spirit monopolists in old days, get their money in a way that gains them the contempt of everyone. They don't care for their contempt, and then they use their dishonest gains to buy off the contempt they have deserved."

"Perfectly true!" chimed in Vassenka Veslovsky. "Perfectly! Oblonsky, of course, goes out of bonhomie, but other people say: 'Well, Oblonsky stays with them.'..."

"Not a bit of it." Levin could hear that Oblonsky was smiling as he spoke. "I simply don't consider him more dishonest than any other wealthy merchant or nobleman. They've all made their money alike--by their work and their intelligence."

"Oh, by what work? Do you call it work to get hold of concessions and speculate with them?"

"Of course it's work. Work in this sense, that if it were not for him and others like him, there would have been no railways."

"But that's not work, like the work of a peasant or a learned profession."

"Granted, but it's work in the sense that his activity produces a result--the railways. But of course you think the railways useless."

"No, that's another question; I am prepared to admit that they're useful. But all profit that is out of proportion to the labor expended is dishonest."

"But who is to define what is proportionate?"

"Making profit by dishonest means, by trickery," said Levin, conscious that he could not draw a distinct line between honesty and dishonesty. "Such as banking, for instance," he went on. "It's an evil--the amassing of huge fortunes without labor, just the same thing as with the spirit monopolies, it's only the form that's changed. Le roi est mort, vive le roi. No sooner were the spirit monopolies abolished than the railways came up, and banking companies; that, too, is profit without work."

"Yes, that may all be very true and clever.... Lie down, Krak!" Stepan Arkadyevitch called to his dog, who was scratching and turning over all the hay. He was obviously convinced of the correctness of his position, and so talked serenely and without haste. "But you have not drawn the line between honest and dishonest work. That I receive a bigger salary than my chief clerk, though he knows more about the work than I do--that's dishonest, I suppose?"

"I can't say."

"Well, but I can tell you: your receiving some five thousand, let's say, for your work on the land, while our host, the peasant here, however hard he works, can never get more than fifty roubles, is just as dishonest as my earning more than my chief clerk, and Malthus getting more than a station-master. No, quite the contrary; I see that society takes up a sort of antagonistic attitude to these people, which is utterly baseless, and I fancy there's envy at the bottom of it...."

"No, that's unfair," said Veslovsky; "how could envy come in? There is something not nice about that sort of business."

"You say," Levin went on, "that it's unjust for me to receive five thousand, while the peasant has fifty; that's true. It is unfair, and I feel it, but..."

"It really is. Why is it we spend our time riding, drinking, shooting, doing nothing, while they are forever at work?" said Vassenka Veslovsky, obviously for the first time in his life reflecting on the question, and consequently considering it with perfect sincerity.

"Yes, you feel it, but you don't give him your property," said Stepan Arkadyevitch, intentionally, as it seemed, provoking Levin.

There had arisen of late something like a secret antagonism between the two brothers-in-law; as though, since they had married sisters, a kind of rivalry had sprung up between them as to which was ordering his life best, and now this hostility showed itself in the conversation, as it began to take a personal note.

"I don't give it away, because no one demands that from me, and if I wanted to, I could not give it away," answered Levin, "and have no one to give it to."

"Give it to this peasant, he would not refuse it."

"Yes, but how am I to give it up? Am I to go to him and make a deed of conveyance?"

"I don't know; but if you are convinced that you have no right..."

"I'm not at all convinced. On the contrary, I feel I have no right to give it up, that I have duties both to the land and to my family."

"No, excuse me, but if you consider this inequality is unjust, why is it you don't act accordingly?..."

"Well, I do act negatively on that idea, so far as not trying to increase the difference of position existing between him and me."

"No, excuse me, that's a paradox."

"Yes, there's something of a sophistry about that," Veslovsky agreed. "Ah! our host; so you're not asleep yet?" he said to the peasant who came into the barn, opening the creaking door. "How is it you're not asleep?"

"No, how's one to sleep! I thought our gentlemen would be asleep, but I heard them chattering. I want to get a hook from here. She won't bite?" he added, stepping cautiously with his bare feet.

"And where are you going to sleep?"

"We are going out for the night with the beasts."

"Ah, what a night!" said Veslovsky, looking out at the edge of the hut and the unharnessed wagonette that could be seen in the faint light of the evening glow in the great frame of the open doors. "But listen, there are women's voices singing, and, on my word, not badly too. Who's that singing, my friend?"

"That's the maids from hard by here."

"Let's go, let's have a walk! We shan't go to sleep, you know. Oblonsky, come along!"

"If one could only do both, lie here and go," answered Oblonsky, stretching. "It's capital lying here."

"Well, I shall go by myself," said Veslovsky, getting up eagerly, and putting on his shoes and stockings. "Good-bye, gentlemen. If it's fun, I'll fetch you. You've treated me to some good sport, and I won't forget you."

"He really is a capital fellow, isn't he?" said Stepan Arkadyevitch, when Veslovsky had gone out and the peasant had closed the door after him.

"Yes, capital," answered Levin, still thinking of the subject of their conversation just before. It seemed to him that he had clearly expressed his thoughts and feelings to the best of his capacity, and yet both of them, straightforward men and not fools, had said with one voice that he was comforting himself with sophistries. This disconcerted him.

"It's just this, my dear boy. One must do one of two things: either admit that the existing order of society is just, and then stick up for one's rights in it; or acknowledge that you are enjoying unjust privileges, as I do, and then enjoy them and be satisfied."

"No, if it were unjust, you could not enjoy these advantages and be satisfied--at least I could not. The great thing for me is to feel that I'm not to blame."

"What do you say, why not go after all?" said Stepan Arkadyevitch, evidently weary of the strain of thought. "We shan't go to sleep, you know. Come, let's go!"

Levin did not answer. What they had said in the conversation, that he acted justly only in a negative sense, absorbed his thoughts. "Can it be that it's only possible to be just negatively?" he was asking himself.

The Edifice Complex

Are publicly financed stadiums and other sports subsidies really worth the cost to taxpayers?



From Reason.tv

Hayek's Liberalism

From Philosophy Bites...

Friedrich Hayek, though much admired by Margaret Thatcher, distanced himself from conservativism. He was a liberal philosopher. In this episode of Philosophy Bites, Chandran Kukathas of the London School of Economics, explains the key features of Hayek's liberalism.

Listen to Chandran Kukathas on Hayek's Liberalism

Central Planning

Central planning of any large, complex, and adaptable human enterprise is a daunting task. This is not to say that it is impossible or that it cannot yield useful results. There are times when central planning is absolutely essential; war, for example.

The question is can central planning produce results as efficiently and in a comparable variety as can dispersed, decentralized efforts.

The answer is a resounding "No." Consider Ron Bailey's review of Sex, Science and Profits: How People Evolved to Make Money, by Terence Kealey. Kealey is a well-known critic of massive government funding of basic scientific research.

An excerpt:

"Kealey shows in nearly every case the crucial inventions of the past two and half centuries were called forth by markets, not invented by scientists working from ivory towers. These include the steam engine, cotton gin, textile mills, railroad engines, the revolver, the electric motor, telegraph, telephone, incandescent light bulb, radio, the airplane—the list is nearly endless."

Read the rest here

Check out an interview with Kealey here

The Race

Generation E(ntrepreneur)

From the WSJ, a reason to be optimistic about the future of the United States...

"Half of all new college graduates now believe that self-employment is more secure than a full-time job. Today, 80% of the colleges and universities in the U.S. now offer courses on entrepreneurship; 60% of Gen Y business owners consider themselves to be serial entrepreneurs, according to Inc. magazine. Tellingly, 18 to 24-year-olds are starting companies at a faster rate than 35 to 44-year-olds. And 70% of today's high schoolers intend to start their own companies, according to a Gallup poll.

An upcoming wave of new workers in our society will never work for an established company if they can help it. To them, having a traditional job is one of the biggest career failures they can imagine."

The Quotable Frédéric Bastiat

"Away with the whims of governmental administrators, their socialized projects, their centralization, their tariffs, their government schools, their state religions, their free credit, their bank monopolies, their regulations, their restrictions, their equalization by taxation, and their pious moralizations!

And now that the legislators and do-gooders have so futilely inflicted so many systems upon society, may they finally end where they should have begun: May they reject all systems, and try liberty; for liberty is an acknowledgment of faith in God and His works."

How Should We Think About Climate Change?

Once upon a time, central planning of the economy was the greatest threat to freedom and prosperity. Now, it's environmentalism. Having failed in their attempts to manage the economy, large numbers of intellectuals, politicians, and sentimental Gaiaists now want to manage the Earth's climate.

No one ever accused these people of modest ambitions. Hubris, maybe, but never modesty.

What's a thinking person to do? Bjorn Lomborg gives John McCain some advice about global warming at National Review Online. Lomborg says:

"McCain strikes some of the right notes — he says he recognizes the need for clean, affordable alternatives to fossil fuels; he acknowledges that climate change is real (although there are very few leaders these days who don’t) and he says that we need to deal with the central facts.

But then he doesn’t stay focused on the central facts himself, and ends up reaching some conclusions that are not so sound: he pushes for a cap-and-trade scheme which will do very little good while imposing very high costs. In his speech notes, McCain planned to call for punitive tariffs on China and India, but he omitted that from his delivered speech: hopefully because he realized that protectionism for green reasons can be just as harmful as protectionism for plain old economic reasons."

More Lomborg...

In the following video, taken at an "Authors @ Google" presentation, Lomborg makes his case in 30 minutes.

Bastiat in The Online Library of Liberty

For those of you who would like to know more about Frédéric Bastiat and his work, the Online Library of Liberty offers a nice collection of his works in a variety of formats, in either English or French, some downloadable. The collection is also searchable.

Here is the Library's introduction to Bastiat:

Claude Frédéric Bastiat was a French economist, legislator, and writer who championed private property, free markets, and limited government. Perhaps the main underlying theme of Bastiat’s writings was that the free market was inherently a source of “economic harmony” among individuals, as long as government was restricted to the function of protecting the lives, liberties, and property of citizens from theft or aggression. To Bastiat, governmental coercion was only legitimate if it served “to guarantee security of person, liberty, and property rights, to cause justice to reign over all.” [The image comes from “The Warren J. Samuels Portrait Collection at Duke University.”]

To Serve Mankind

"Utopians no longer reject the market; rather, they now seek to geld and harness it 'to serve mankind.'"
From the forward by Steve Forbes, in The Role of Business in the Modern World by David Henderson

Henderson on Corporate Social Responsibility

British economist David Henderson is a well-known skeptic of corporate social responsibility ("CSR"), at least as it is popularly formulated. In this interview with the Italian free-market Bruno Leoni Institute, Henderson briefly makes his case.

He says companies should act responsibly, of course. But that does not mean they should swallow CSR whole. The popular version of CSR is based on a misleading view of the world. Followed blindly, that kind of CSR is more likely to do more harm than good.

Pirate Treasure

Business people are often accused of acting like pirates. After a new look at pirate history, it turns out that might not be so bad.

Peter Leeson, an economics professor at George Mason University, argues that pirate ships were actually some of the world's earliest democracies. His new book is "The Invisible Hook: The Hidden Economics of Pirates."

An excerpt from a review in the Boston Globe:

In one successful cruise, a pirate could take home what a merchant sailor earned in 50 years. Yet a business enterprise made up of the violent and lawless was clearly problematic: piracy required common action and mutual trust. And pirates couldn't rely on a government to set the rules. Some think that "without government, where would we be?" Leeson says. "But what pirates really show is, no, it's just common sense. You have an incentive to try to create rules to make society get along. And that's just as important to pirates as it is to anybody else."

Science as High Priest

Modern science is, unquestionably, one of mankind's greatest intellectual achievements. Unfortunately, success breeds arrogance, nowhere more apparent than in the following headline in Scientific American:

Scientists Know Better Than You -- Even When They're Wrong

As F. A. Hayek pointed out in his book, The Counter-Revolution of Science, scientific methods have their limits. Asking science to research the physical world is a wonderful thing. Asking it to correct the errors of the entire human race is a terrible mistake.

The headline of this article is completely misleading. It implies that the work of Harry Collins --the sociologist whose work it reviews-- tells us that non-scientists should kowtow to scientists, even when scientists make incorrect declarations outside of their narrow field of specialization.

That is clearly not Mr. Collins position. What he does say is that the tacit knowledge of a group is as important as explicit knowledge, and that without tacit knowledge, you can "talk the walk" but you can't do the job. Rather than aggrandizing the opinions of scientists, I believe his message is to respect the views of specialists, but to also be skeptical of those specialists when they offer themselves as definitive authorities on topics outside of their training and professional network.

Anything more than that is not respect; it comes dangerously close to worship, and I can hardly think of anything less worthy of that than a bunch of irredeemably fallible humans.

New Links

Check out what's new in the Bastiat Society's Free Market Links.

First, you'll find a link to Laissez-faire Books. LFB is a venerable institution that began in the dark ages when book catalogs were hard-copy publications; when they arrived only via US Mail; a time when a toll free number was high-tech; a time when people actually dialed a telephone; a time called 1972.

Second, you'll find a link to TV Liberty, a collection of videos including Walter Williams discussing "The Entrepreneur as American Hero."

Advice to Grads: "Make a Bunch of Money!"

P.J. O'Rourke has written the commencement address every newly-minted college graduate should hear, but won't.

Among his advice:

"Go out and make a bunch of money!

Here we are living in the world's most prosperous country, surrounded by all the comforts, conveniences and security that money can provide. Yet no American political, intellectual or cultural leader ever says to young people, "Go out and make a bunch of money." Instead, they tell you that money can't buy happiness. Maybe, but money can rent it.

There's nothing the matter with honest moneymaking. Wealth is not a pizza, where if I have too many slices you have to eat the Domino's box. In a free society, with the rule of law and property rights, no one loses when someone else gets rich."

Read the rest here.

The Quotable Frédéric Bastiat

"Try to imagine a system of labor imposed by force that is not a violation of liberty; a transfer of wealth imposed by force that is not a violation of property rights. If you cannot do so, then you must agree that the law cannot organize labor and industry without organizing injustice."

The More Things Stay the Same

When a business is not successful in the marketplace, it may try its hand at politics. Tariffs, quotas, taxes, and other laws will enrich a politically successful firm, but only at the expense of competitors, customers and taxpayers, and against their will.

This is nothing new. On May 6, 1850, Bastiat heard this plea for such abusive laws in France from the General Council of Manufacturers, Agriculture, and Commerce, asking:

"That science no longer be taught exclusively from the point of view of free trade (of liberty, of property, and of justice) as has been the case until now, but also, in the future, science is to be especially taught from the viewpoint of the facts and laws that regulate French industry (facts and laws which are contrary to liberty, to property, and to justice). That, in government-endowed teaching positions, the professor rigorously refrain from endangering in the slightest degree the respect due to the laws now in force." (The Law)

In other words, stop teaching free trade and start teaching students to obey the laws that favor French industry.

Plus ça change, plus c'est la même chose.

The Purpose of Business

What is the purpose of business? That is a simple question with many answers. Among them are:

To increase profits. (Friedman)

To balance the competing interests of stakeholders. (Freeman)

The purpose is unique to each firm; it is specialized and evolving. (Mackey)

To maximize owner value by selling goods and services. (Sternberg)

To create and keep a customer. (Drucker)

To meet society's needs. (Brown)

To "serve the community skillfully as well as faithfully in offices of trust" and “aid in maintaining sound financial morality.” (Khurana & Gintis, quoting Wharton)

To improve society. (Ebertz)

To act as a vehicle of economic progress. (Henderson)

To "increase the general well-being of humankind through service, a creative invention and ethical philosophy." (Hawken)

To serve the state. (Mussolini)

To expropriate the worker. (Marx)

Friedman on Business and Government

Thirty years ago in Reason magazine, Milton Friedman wrote about business:

“How many businessmen have you heard in the past 10 years who have been willing to stand up on some public rostrum and take issue with governmental policies? Many a businessman gets up and expresses general sentiments in favor of free enterprise and of competition, but very few get up and criticize particular measures taken by government. And I don’t blame them. They would be fools to do it!”

—Milton Friedman, “Which Way for Capitalism?”

The Birth of Freedom

A new documentary from the Acton Institute, "The Birth of Freedom," examines an often overlooked fact: freedom in the modern world has deep roots in religion.

From the Acton Institute web site...

"The American founders said that all men are created equal and are endowed with certain unalienable rights. That among these are life, liberty, and the pursuit of happiness. They called this a self evident truth. 87 years later, Abraham Lincoln reaffirmed this idea on the Civil War battlefield of Gettysburg. And in 1963 these same words echoed from the steps of the Lincoln Memorial as Martin Luther King, Jr. urged America to fulfill the promise of its founding.

But humans are separated by enormous differences in talent and circumstance. Why would anyone believe that all men are created equal? That all should be free? That all deserve a voice in choosing their leaders? Why would any nation consider this a self-evident truth?

For the millions around the world who have never tasted liberty the question cries for an answer."

The Teaser...


The Trailer...

May 2008 Meeting

Please join us for hors d'oeuvres and insight at our upcoming Bastiat meeting on Wednesday, May 7th, with our featured speaker Marty Zupan of the Institute for Humane Studies at George Mason University.

Topic: "Will the Next Generation Defend Capitalism?"
Time: 5 pm to 7 pm
Location: 175 King Street, Charleston, SC

We look forward to seeing you, and would be delighted if you bring a friend or two who is also interested in ideas and stimulating dialogue.

Please RSVP to Megan Rock

About our speaker...

Marty Zupan is President and CEO of the Institute for Humane Studies, based at George Mason University in northern Virginia. She joined IHS in 1989 as a vice president and in the mid-1990s led an expansion of the Institute's educational programs. In 2001 she was appointed president of the Institute for Humane Studies.

Prior to her career with the Institute, Marty was editor-in-chief of the monthly opinion magazine Reason. She has been published in several academic journals as well as the New York Times Book Review and the op-ed pages of newspapers.

She majored in philosophy and psychology in her undergraduate studies and completed a year of graduate study in economics at the University of Rochester. She has served on the boards of several nonprofits, including a private school in the Washington, D.C., suburbs.

Marty has enormous experience in helping tomorrow's leaders - today's college students - understand the virtues of capitalism and markets. What is the prevailing view of capitalism on college campuses today? She says its not a pretty picture. Will she offer any hope? Come and find out!

McDonald's Boom

Few businesses are better known -- or more often criticized -- than McDonald's. We often hear that McDonald's makes us fat, or that it offers nothing but dead-end jobs, or that it is a symbol of American economic imperialism.

Of course, McDonald's reputation was not helped by its fiercely competitive founder, Ray Kroc. He once said that if his competitors were drowning, "I'd put a hose in their mouth."

Kroc also said that the corporate decision to own the real estate for a restaurant location and sublet it gave McDonald's a "club" it could use over franchisees, "and by God there will be no more pampering or fiddling with them."

No one ever said business is a gentleman's game. But it is most certainly not evil. In fact, a research paper from a professor at the Wharton School of Business says Ray Kroc's creation is an engine of economic development, spreading valuable business know-how around the world.

You could say McDonald's is not only a great business; it is also a great business school.

The paper, entitled "McDonald's -- Much Maligned, But an Engine of Economic Development," appeared in the Global Economy Journal. The author is Adrian E. Tschoegl, who notes he ate his first McDonald's hamburger in 1960, and still eats at McDonald's several times a year, but "unhappily never bought its shares."

The article's abstract appears below:

"Critics have excoriated the US fast-food industry in general, and McDonald's most particularly, both per se and as a symbol of the United States. However, examining McDonald's internationalization and development abroad suggests that McDonald's and the others of its ilk are sources of development for mid-range countries. McDonald's brings training in management, encourages entrepreneurship directly through franchises and indirectly through demonstration effects, creates backward linkages that develop local suppliers, fosters exports by their suppliers, and has positive external effects on productivity and standards of service, cleanliness, and quality in the host economies."

On a lighter note, Ray Kroc is probably one of only a few successful businessmen whose life and words inspired a pop-music hit song, "Boom Like That," by Mark Knopfler (formerly of the group Dire Straits).

The song made it to the Top 40 in the United Kingdom in 2004. The lyrics tell Kroc's story, often in his own words.

Business, Religion and Freedom

Business is based on human freedom , and does best when regulated more by the marketplace than politics.

In a society, the loss of any one freedom usually means another one is going soon. Witness what is happening in Vladimir Putin's Russia.

After steadily cutting away the economic freedoms of Russian citizens, he now has made the Russian Orthodox Church the de facto state religion. All other religions are subject to political control (read "harassment").

When religious leaders make deals like this one, they allow religion to be used as an instrument of nationalism and state control. The history of such state religions is a long and bloody one.

Free enterprise and freedom of religion are merely variations on a single theme, that of human freedom. Anyone concerned about freedom should be concerned with what is happening in Russia.

The NY Times reports.

"Just as the government has tightened control over political life, so, too, has it intruded in matters of faith. The Kremlin’s surrogates in many areas have turned the Russian Orthodox Church into a de facto official religion, warding off other Christian denominations that seem to offer the most significant competition for worshipers. They have all but banned proselytizing by Protestants and discouraged Protestant worship through a variety of harassing measures, according to dozens of interviews with government officials and religious leaders across Russia.

This close alliance between the government and the Russian Orthodox Church has become a defining characteristic of Mr. Putin’s tenure, a mutually reinforcing choreography that is usually described here as working “in symphony.”

Mr. Putin makes frequent appearances with the church’s leader, Patriarch Aleksei II, on the Kremlin-controlled national television networks. Last week, Mr. Putin was shown prominently accepting an invitation from Aleksei II to attend services for Russian Orthodox Easter, which is this Sunday.

The relationship is grounded in part in a common nationalistic ideology dedicated to restoring Russia’s might after the disarray that followed the end of the Soviet Union. The church’s hostility toward Protestant groups, many of which are based in the United States or have large followings there, is tinged with the same anti-Western sentiment often voiced by Mr. Putin and other senior officials."

Taboo in the Boardroom

"This basic notion -- that it is ethical for businesses to uphold the free market and renounce the use of politics -- seems elementary, yet it is virtually impossible to overstate the degree to which the point is lost on, if not altogether taboo for, those who sit in corporate boardrooms, no less today than in 1980. Even lip service is rarely paid to the idea."

Richard W. Wilcke, "An Appropriate Ethical Model for Business and a Critique of Milton Friedman's Thesis," The Independent Review IX, Fall 2004.

An Illegal Hot Dog?

From reason.tv, the story of a small business versus the health department, and the unintended consequences of high-minded public policy.

Elizabeth Palacios sells hot dogs in LA. She also spent 45 days in jail for selling an illegal hot dog. Yes, that's right. An illegal hot dog.

The Quotable Frédéric Bastiat

"The state is that great fiction through which everyone tries to live at the expense of everyone else."

Frédéric Bastiat
1801-1850

Boudreaux on "Cleaned by Capitalism"

"Before refrigeration, people ran enormous risks of ingesting deadly bacteria whenever they ate meat or dairy products. Refrigeration has dramatically reduced the bacteria pollution that constantly haunted our pre-twentieth-century forebears.

We wear clean clothes; our ancestors wore foul clothes. Pre-industrial humans had no washers, dryers, or sanitary laundry detergent. Clothes were worn day after day without being washed. And when they were washed, the detergent was often made of urine.

Our bodies today are much cleaner. Sanitary soap is dirt cheap (so to speak), as is clean water from household taps. The result is that, unlike our ancestors, we moderns bathe frequently. Not only was soap a luxury until just a few generations ago, but because nearly all of our pre-industrial ancestors could afford nothing larger than minuscule cottages, there were no bathrooms (and certainly no running water). Baths, when taken, were taken in nearby streams, rivers, or ponds, often the same bodies of water used by the farm animals. Forget about shampoo, clean towels, toothpaste, mouthwash, and toilet tissue.

The interiors of our homes are immaculate compared to the squalid interiors of almost all pre-industrial dwellings. These dwellings’ floors were typically just dirt, which made the farm animals feel right at home when they wintered in the house with humans. Of course, there was no indoor plumbing. Nor were there household disinfectants, save sunlight. Unfortunately, because pre-industrial window panes were too expensive for ordinary families and because screens are an invention of the industrial age, sunlight and fresh air could be let into these cottages only by letting in insects too. Also, bizarre as it sounds to us today, the roofs of these dwellings were polluted with all manner of filthy or dangerous things. Here’s the description by historians Frances and Joseph Gies, in Life in a Medieval Village, of the roofs of pre-industrial cottages:

"Roofs were thatched, as from ancient times, with straw, broom or heather, or in marsh country reeds or rushes. . . . Thatched roofs had formidable drawbacks; they rotted from alternations of wet and dry, and harbored a menagerie of mice, rats, hornets, wasps, spiders, and birds; and above all they caught fire. Yet even in London they prevailed.""

From "Cleaned by Capitalism" by Don Boudreaux.

Need a Speaker? Try Bastiat!

Do you need a speaker for your next event?

Are you looking for a speaker who can entertain and inform your audience?

Want to hear some good news?

Consider inviting the Bastiat Society to provide a speaker for your next event!

The Bastiat Society is a non-profit organization created to spread the message that business is an inherently moral as well as uniquely productive form of social organization.

The Society may be able to provide a speaker for your next convention or trade show. It may also help arrange speakers for civic, fraternal and social organizations. Our favorite topics include:

* Business People: Heroes of the Modern World
* The Engine of Progress
* Business and Society
* Why Politics is Not the Answer (Usually)
* Business, Faith, and Reason
* The Merchant Ape

Why use the Bastiat Society?

* We deliver a unique message: the world is getting better, and business is the key
* You work directly with your speaker, not a bureau
* We are experienced
* We are very affordable

As a non-profit organization, our message is more important than collecting a fee. If you can make a contribution to the Bastiat Society, we will gratefully accept it, but a contribution is not required. However, we do ask you to cover travel and lodging, if necessary.

To check available dates or request more information, click here to email Ben Rast, President of the Bastiat Society.

Business and the Human Order

How can we end poverty and human suffering? We cannot just "eat the rich." There aren’t enough of them.

How can we spread tolerance and peace? We cannot spread them by imposing speech codes, threats and intimidation. That is the very opposite of tolerance.

How can we promote the dignity of every human being over the privileges of a favored few? We cannot promote it by humanizing some more than others.

How can we protect the environment? We cannot protect it by binding our neighbor with chains and seizing his property.

These are among the most important questions in history. But too often, they are answered with well-intentioned political attempts to create a perfect human order. We yearn for a better world, and are easily tempted by a political promise of immediate results. We try to end poverty by taking money from those who earn it, and giving it to those who do not. We try to create tolerance and peace by accusing people of thought crimes. We try to promote human dignity by making some more equal than others. We try to protect the environment by restricting personal freedom and private property. Yet we stumble from one political failure to another.

There are better answers – ideas which emerged in the West just a few hundred years ago. Not Utopian ideas, but inspiring and effective ideas, the ideas of freedom. Ideas which proclaim freedom is a process, not a result. Ideas which proclaim individuals are better qualified to run their lives than bureaucrats; political power is better dispersed than concentrated in the hands of a few; and happiness is an individual pursuit, not a collective one. Ideas which promote individual liberty, free trade, private property rights, and the rule of law. Ideas so powerful that they lifted millions out of poverty, overthrew kings, freed slaves and eroded ancient privilege.

These ideas still animate the world. Today, they are called capitalism. And capitalism is so deeply ingrained in the culture of the West that we often take it for granted.

Taking capitalism for granted, we run the risk of losing it altogether.

The West grew rich believing in freedom. It will grow poor unless we believe again. The task facing us is to reignite wide-spread confidence in a social order based on freedom of the individual.

This task requires coordinated and long-term efforts in four key areas of human action:

• Intellectual – action in the world of ideas.
• Public Policy – action in the world of power.
• Cultural – action in the patterns of everyday life.
• Business – action that creates wealth.

On the intellectual front, there are already some great institutions committed to promoting human freedom – such as the Mont Pelerin Society, the Liberty Fund of Indianapolis, the Atlas Economic Research Foundation and the Institute for Humane Studies. But ideas change the world slowly, like slow currents in the ocean, and we humans are impatient. Today, the intellectual task of promoting freedom is made even more difficult because these institutions labor in a world that harbors the widespread belief that public policy is the immediate solution to every social challenge great and small, from terrorism to telemarketers.

In the public policy world, there are hugely effective bodies such as the Cato Institute, the Heritage Foundation, the Institute of Economic Affairs, and the Adam Smith Institute. But politics alone will never change the human order – at least not for very long. Public policy is the easiest thing to do and to undo: it happens with each election. Unless public policy is built around a cultural and intellectual insistence that individuals own themselves, public policy can never be a firm defense of the individual.

In the cultural sphere, organizations such as the Palmer R. Chitister Foundation and the Acton Institute promote a wider understanding of freedom in popular culture, what you might call the patterns of everyday life. These include, especially, entertainment and religion. Individuals such as John Stossel of ABC News bring the issue of personal freedom to the powerful medium of prime time television.

This leaves us only the area of business, the human activity of wealth creation. What is being done to promote confidence among business people in a human order based on freedom? The answer is, surprisingly, not much. Paradoxically, the people who make productive use of human freedom are left to find their own moral justification for their activities, a task made even more difficult by a culture and intellectual environment that overwhelmingly mistrusts businesses and the people who run them.

Not surprisingly, business people rarely hear the message that their business activity is inherently moral, socially beneficial, and economically necessary. With the notable exception of Forbes magazine, there are few institutions dedicated to promoting a principled case for freedom among business people – the wealth creator class. Business schools certainly do not. Business schools primarily license technicians, especially of the financial kind. When schools do talk about business ethics, morality or organizational behavior, it is usually in terms that make business sound more a homeless shelter than a wealth-creating adventure of liberty.

Successful business innovation is rooted in freedom. This is a conclusion so obvious that some of the most successful business people simply take freedom for granted. They mistakenly believe they can safely ignore the hostile ideas of intellectuals, public policy experts, and popular culture and simply concentrate on running their businesses as best they can. We believe this is a strategic mistake.

Some businesses go even further. Having created great wealth, they make well-intentioned, but disastrous philanthropic decisions. They hand over their wealth to individuals and institutions that then use that wealth to attack the integrity, morality and even the right to exist of businesses large and small. Unwittingly, these businesses are major contributors to their most dangerous opponents. We believe this could be fatal.

We created the Bastiat Society, a non-profit 501(c)3 foundation to be an organization of business people who are ready to publicly defend the productivity and morality of capitalism. We are not a chamber of commerce. We are a chamber of capitalists. We take our name from the great European statesman, economist and defender of freedom, Frederic Bastiat (1801-1850). We stand alongside the intellectuals, public policy experts, and cultural leaders who share our commitment to human freedom.

The Bastiat Society’s mission is to accomplish five socially important goals:

1. Defend business people as the most important agents of human material progress. They are the real anti-poverty heroes.
2. Defend the virtuous and moral role that business people serve in market economies. They are ethical leaders.
3. Improve the business community’s appreciation and understanding of the necessity for a large, international, and influential class of intellectuals sympathetic to capitalism. Ideas are capitalism’s main defense.
4. Redirect the philanthropic flow of business-created wealth to institutions that will defend and promote capitalism – rather than work to destroy it.
5. Promote our members’ self-interests, by building an international network of business relationships of the highest quality, integrity and mutual respect. The Society is a place to do first-class business.

The Society accomplishes its mission through monthly meetings, conferences, and the Bastiat Society Awards. The Bastiat Society Awards are given for accomplishments in the areas of Public Policy, Culture, Academics, and Business. These awards honor individuals who, in the course of their professional lives, have distinguished themselves in promoting free market ideas and a greater appreciation of peaceful commercial activity. They are awarded periodically by The Bastiat Society in the United States.

We believe the Bastiat Society fills an important but overlooked market, one where ideas and actions meet. It is a vital meeting point between the thinkers who defend capitalism in words, and the wealth creators who practice capitalism in deeds. Neither group can exist without the other. Our motto, “Those who work in freedom should know how freedom works,” reminds us that business people have a special responsibility in a free world.

We do not claim that business is perfect. Human beings are never perfect. But it would be a terrible tragedy for all mankind if we allowed capitalism’s detractors to focus on its failures, instead of proclaiming its success as the most moral, productive and humane form of social organization in history.

We do not believe in using public policy to grant special favors to business. We believe public policy should defend a free economy and free trade.

We do not want to preserve the status quo. A free and healthy economy must be dynamic. Companies will come and go, also, perhaps even entire industries. Competition is the world’s best economic development policy. The only unacceptable outcome of a free society is the loss of freedom itself.

We do care about environmental issues. We believe that wealth creation is a superior means of improving and protecting the environment, rather than centralized bureaucratic regulation.

The time has come for business people to arm themselves with the ideas that can protect the human progress of the last 300 years. Business people who ignore the force of intellectual ideas, or the power of public policy, or the influence of culture will one day – perhaps soon – wake up to discover their incomes, property and fortunes have been confiscated without mercy and to popular acclaim.

That has happened before. We must not let it happen again.

Yes, business fortunes depend on a renewed confidence in a human order based on freedom. But all humanity depends on business.

Bastiat vs Obama

From Neal Boortz...

THEN AND NOW

I found this in the regular Friday missive from the Georgia Public Policy Foundation. First we have a quote from one of my favorite books: "The Law," and then we have a quote from hyper-leftie Michelle Obama. Have fun.

Then: "The war against illegal plunder has been fought since the beginning of the world. But how is... legal plunder to be identified? Quite simply. 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. Then abolish this law without delay ... If such a law is not abolished immediately it will spread, multiply and develop into a system." - Frédéric Bastiat

Now: "The truth is, in order to get things like universal health care and a revamped education system, then someone is going to have to give up a piece of their pie so that someone else can have more." - Michelle Obama

Another Inquisition?

T. J. Rodgers, the CEO of Cypress Semiconductor Corp. — which owns solar-power manufacturer SunPower — says, “You serve people by making things people want.”

If people want green power and they are willing to pay for it, the private sector will make it. The politicians won't have to do a thing, except get out of the way.

What's the alternative to what we might call going green privately?

Going green publicly. And contrary to the feel-good propaganda, public green is not a comforting vision.

The scary thing about using government to engineer green power is the terrible naivety of those who advocate it. In the words of George Washington, government is not reason, it is not eloquence, it is force. The only issues we should turn over to government are those where we are convinced it is necessary to compel people to agree.

Here are the relevant questions anyone advocating government action should be prepared to answer:

Are you willing to fine those who do not agree with you?

Are you willing to send them to jail?

Are you willing to seize their property?

Are you willing to condemn them to death?

This is how government operates. This is the only way government engineers a social consensus.

The more we insist on political solutions to everything from our personal problems to the problems of the world, the greater we run the risk of another cruel inquisition and a persecution of the innocent.

Confused Social Responsibility

"What should worry us above all else, however, is a society that is confused about the difference between having a stake in something and being affected by it. That is the kind of society that cannot distinguish the moral from the beneficial, leadership from conformity, tyranny from liberty."

Doug Den Uyl, "Corporate Social Responsibility," in Business Ethics and Common Sense.

Human History in 60 Seconds

Got 60 seconds?

For the harried business person who says, "I would read more, if only I had the time," here is a remarkable lecture in its entirety by Alan Charles Kors, George H. Walker Endowed Term Professor of History at the University of Pennsylvania.

He covers all of human history in just 60 seconds. Notice his emphasis on trade. Business really is one of the great stories of history.

* First, tribes: tough life.
* The defaults beyond the intimate tribe were violence, aversion to difference, and slavery. Superstition: everywhere.
* Culture overcomes them partially.
* Rainfall agriculture, which allows loners.
* Irrigation agriculture, which favors community.
* Division of labor plus exchange in trade bring mutual cooperation, even outside the tribe.
* The impulse is always there, though: "Kill or enslave the outsider."
* Gradual science from Athens' compact with reason.
* Division of labor, trade, the mastery of knowledge, plus time brought surplus, sometimes a peaceful extended order and, rules diversely evolved and, the cooperation of strangers - always warring against the fierce defaults of tribalism, violence, and ignorance.
* No one who teaches you knows what will happen.

The Fallacy of the Broken Glass

Every year -- perhaps every day -- someone makes the claim that the destruction of valuable property is, on balance, a good thing for society. After all, destruction creates lots of new jobs rebuilding things, and it stimulates lots of new spending. Aren't we left visibly better off?

We heard this claim after Hurricane Hugo smashed into South Carolina. We heard it again when Hurricane Katrina smashed into New Orleans. We will, no doubt, hear it the next time Mother Nature reminds us who is boss.

Bastiat heard the same claim in the 19th century. He wrote about it in one of his most famous essays, "That Which is Seen, and That Which is Not Seen." There, he used the example of a broken window to illustrate the truth that breaking things is not the path to national prosperity. A broken window will create work for the window repairman, but someone else loses work because the money that would have been used to buy something else goes into repairing the window. The window repairman is better off, but society is not.

Now, through the magic of movies, we have the pleasure of seeing the same claim surface in the 24th century. The following video is from the movie "The Fifth Element," a 1997 science fantasy about a set of stones that will determine -- what else? -- the fate of the human race. Gary Oldman plays the bad-guy Jean-Baptiste Emanuel Zorg, who serves the Great Evil.

Of course, the film reflects 20th century Hollywood morality. Bad-guy Zorg is a wealthy industrialist who looks like a hip Adolph Hitler and speaks with a Texas accent.

Machiavelli on Men of Ability

"A prince ought to show himself an admirer of talent, giving recognition to men of ability and honoring those who excel in a particular art. Moreover, he should encourage his citizens to ply their callings in peace, whether in commerce, agriculture, or in any other business. The man who improves his holdings should not be made to fear that they will be taken away from him; the man who opens up a branch of trade should not have to fear that he will be taxed out of existence. Instead, the prince should bestow prizes on the men who do these things, and on anyone else who takes pains to enrich the city or state in some special way."

Niccolo Machiavelli, The Prince, 1513

The Revolutionist's Handbook

The art of government is the organization of idolatry.

Liberty means responsibility. That is why most men dread it.

Vice is waste of life. Poverty, obedience, and celibacy are the canonical vices.

Economy is the art of making the most of life.

The love of economy is the root of all virtue.

Political Economy and Social Economy are amusing intellectual games; but Vital Economy is the Philosopher's Stone.

If you injure your neighbor, better not do it by halves.

From "The Revolutionist's Handbook and Pocket Companion" by John Tanner, M.I.R.C. ("Member of the Idle Rich Class), an appendix to George Bernard Shaw's play Man and Superman.

Poverty

"On a world scale the risk, intensity and severity of poverty has fallen more sharply in the past fifty years than in the preceding thousand years."

Michael Lipton, University of Sussex, quoted in The Progress Paradox by Gregg Easterbrook

Fear and Faith in France

"Vaclac Klaus, the president of the Czech Republic, said that communism rested on two pillars : "fear and faith", and when at least one of those two pillars collapsed, the whole system collapsed. In France, we have not reached that stage yet. We are frightened, but of the unknown, of strikes, of socialists, of public opinion. And we still believe in State intervention. And yet we should trust ideas that are right. Bastiat said : "Unity should result from the universal feeling of free conviction and from the natural attraction that truth exercises on men's minds". Hayek was less optimistic. He said : "The day France becomes libertarian, to be sure the whole world will have become so before then"."

Pascal Salin holds a doctorate in economics and is professor of economics at the university of Paris-Dauphine. This paragraph came from a dinner-debate at the Bastiat Circle in France.

Unborrowed Vision

From The Fountainhead by Ayn Rand, Gary Cooper as Howard Roark defends "the men of unborrowed vision" who create everything that is new and glorious, in science, in art, and in business.

Social Justice

"Divide the gross domestic product of the world by the world's population, and everyone gets $7,200 per year. What kind of basketball are we going to have if Shaquille O'Neal has to take a $21,422,800 pay cut? And a family of four in Tanzania making $28,000 will buy a used Toyota, which brings us back to global warming."

P. J. O'Rourke, "Nobel Sentiments," in Peace Kills: America's Fun New Imperialism

Get Involved!

"It's a mistake to applaud greater involvement in politics as if such involvement is by its very nature the best use of people's time and effort. A more serious delusion is that politics is the only -- or, at least, the most noble -- venue for each of us to get "involved" with our fellow humans.

In fact, though, we are involved even when we pay no attention to politics. We care for our families, support our friends, work at jobs that produce goods and services for millions of people and are active members of churches and clubs.Each of us is intensely involved, daily.

Indeed, we are involved better and more fully when we act privately (that is, outside of government) than when we act politically."

Don Boudreaux, George Mason University, in The Pittsburg-Tribune Review

A Country of Starving Billionaires