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.