Bastiat Reference in Chicago Tribune

"[In Chicago] the 5 percent sales tax forgiveness on back-to-school purchases last month, as study after study confirms, only shifts spending from other time frames with no net gain in sales. Ditto for last year's dollop — cash for clunkers — and this year's homebuyer tax credit.

In each of these examples, a politician or legislative body was either seeking to do good — reduce energy consumption, make something more affordable or put more money in workers' pockets — or was perhaps duped by, or just pandering to, a special-interest group or constituency.

As 19th century French economist Frederic Bastiat put it, "There is only one difference between a bad economist and a good one: The bad economist confines himself to the 'visible' effect; the good economist takes into account both the effect that can be seen and those effects that must be 'foreseen.'

The same bad vs. good demarcation holds for political candidates, city halls, lawmakers and public agencies."

Allen R. Sanderson of the University of Chicago, Chicago Tribune

Labor (verb):

1a : expenditure of physical or mental effort especially when difficult or compulsory

b (1) : human activity that provides the goods or services in an economy (2) : the services performed by workers for wages as distinguished from those rendered by entrepreneurs for profits
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A thought on labor:

Your labor is your most valuable asset: Capitalism compensates you for it, and socialism steals it from you.

Enemies of freedom and liberty often accuse entrepreneurs and capitalists of "exploiting" the working-class. Profits and greed, they argue, inevitably pit the employer and employee against each other. Nothing could be farther from the truth. Yet, contempt for the employer and fear are the tools socialists use to spread their own ideals. Once the workers are convinced that capitalism is evil, they then look to the government for the wealth and security that capitalism once provided.

Below are some various quotes regarding labor, wages, and profit. As you read them, ask yourself which group (capitalists or socialists) truly value the worker, the product of their labor, and the entrepreneurial spirit:
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"On the basis of political economy itself, in its own words, we have shown that the worker sinks to the level of a commodity and becomes indeed the most wretched of commodities; that the wretchedness of the worker is in inverse proportion to the power and magnitude of his production..."
- Karl Marx (1844) on the Political Economy

"We have stopped thinking in terms of a minimum wage. That belongs to yesterday, before we quite knew what paying high wages meant. Now so few people get the minimum wage that we do not bother about it at all. We try to pay a man what he is worth and we are not inclined to keep a man who is not worth more than the minimum wage."
- Henry Ford (1912) on Minimum Wages

"To establish, that in cases of even one unexcused day's absence from work, the worker should be fired from the enterprise or establishment, with loss of the right to use ration and commodity cards issued to him as a worker in said enterprise or establishment, and likewise with loss of the right to use an apartment given him in the housing of said enterprise or establishment."
- Resolution of the Central Executive Committee and the Council of People's Commissars of the USSR (1932)

“We do want more, and when it becomes more, we shall still want more. And we shall never cease to demand more until we have received the results of our labor.”
- Samuel Gompers, leader and first President of the American Federation of Labor (AFL) (1850-1924)

"Rather, it has been the risk-takers, the doers, the makers of things -- some celebrated, but more often men and women obscure in their labor -- who have carried us up the long rugged path towards prosperity and freedom."
- Barrak Obama (Jan 8th, 2009)

"Reckless greed and risk taking … must never endanger our prosperity again"
- Barrak Obama (Jan 20th, 2009) (Notice the contradiction...?)

"I think myself that we have more machinery of government than is necessary, too many parasites living on the labor of the industrious."
- Thomas Jefferson (1743-1826) on the role of government

"These capitalists generally act harmoniously and in concert, to fleece the people."
- Abraham Lincoln (1809-1865)

"Opportunity is missed by most people because it is dressed in overalls and looks like work."
- Thomas Edison (1847-1931) on hard work and commitment

"The people who are doing the work are the moving force behind the Macintosh. My job is to create a space for them, to clear out the rest of the organization and keep it at bay.
- Steve Jobs, CEO of Apple (1955- )

"Particular obstructive workers who refuse to submit to disciplinary measures will be subject, as non-workers, to discharge and confinement in concentration camps."
- Article 9 of a decree, signed by Lenin (14 November 1919)

"No one would have any argument with government, 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. "
- Frederic Bastiat (1850) The Law

Trade Makes Us Less Likely to Kill

Michael Shermer writes in the Huffington Post:

"Trade makes us less likely to kill our potential trading partners. As Jared Diamond once told me about his research on Papua New Guinea hunter-gatherers: "Should you happen to meet an unfamiliar person in the forest, of course you try to kill him or else to run away. Our modern custom of just saying hello and starting a friendly chat would be suicidal." And yet something happened in the 1960s to bring about more peaceful interactions. Initially, peace was imposed upon the native New Guineans by fiat from the Western colonial government that ruled over the territory, but officials then insured continued peace by providing goods that the people needed, as well as the technologies to enable them to continue producing more resources on their own. In less than one generation, New Guinean hunter-gatherers who were fighting each other with stone tools were suddenly New Guinean consumer-traders operating computers, flying planes, and running their own small businesses. Where goods crossed New Guinea frontiers, New Guinea armies did not.

This is an example from my book of what I call Bastiat's Principle, from an observation by the 19th-century French economist Frédéric Bastiat: "Where goods do not cross frontiers, armies will." Although trade is not a sure-fire prophylactic against between-group conflict (there are exceptions to Thomas Friedman's observation that two countries with MacDonalds don't fight, but as a first order approximation it is accurate), it is an integral component to establishing trust between strangers that lessens the potential volatility that naturally exists whenever groups come into contact with one another, especially over the allocation of scare resources that have alternative uses, the very definition of economics.

And that brings us back full circle to trade, markets, and morality."

How to Help the "Bottom Billion"

Government Organization

When the government supports you, the government owns you...

Matt Ridley on Rational Optimism

Anniversary of Bastiat's Birth

The Quotable Bastiat

"The State is also subject to Malthus’s Law. It tends to exceed the level of its means of existence, it expands in line with its means and what keeps it in existence is the substance of the people. Misfortune thus afflicts those peoples who cannot limit the sphere of action of the State. Freedom, private activity, wealth, well-being, independence and dignity will all disappear."

Via http://bastiat.net/en/

A Radical Obesity Hypothesis

Part One: Where food is hard to get, expensive, and it tastes bad, very few people get fat.

Part Two: Where food is plentiful, affordable, and it tastes good, lots of people get fat.

What Went Wrong at BP

"BP put form over substance and took their eye off the ball. Beyond Petroleum was a failed corporate strategy that resulted in heedless, dumb cost-cutting that put profits losses ahead of people and the environment.

Reality can be a harsh mistress. BP went after an environmental fad, basked in the glow of the Left environmental movement, and now may have destoyed itself in the process. As with Enron, another ‘progressive’ ‘green’ company, the Left environmentalists got what they deserved.

If only John Browne had given a Lee Raymond-type speech and had conducted BP’s business in the manner of its more reality-grounded brethren. The blame for the fatal attraction goes deep, and it lands at the doorstep of the mainstream environmental movement that got BP into greenwashing."

Rob Bradley, at MasterResource, a free-market energy blog.

Markets Are Like Wives

Markets are like wives. They will tell you what to do, but you won't always like what you hear.

The Conversation by Henri Matisse, 1908-1912. Source: State Hermitage Museum

The Free Dictionary

Organized Crime noun [awr-guh-nahyzd krahym]

1. Interstate theft that occurs within a centrally controlled formal structure.

2. The people and the groups involved in such criminal activities; e.g., the Mafia in Sicily and the Legislature in the United States.

Cutting Communism - One Head at a Time

Cuba continues to be in the news. It appears that Raul Castro understands the pitfalls of communism more than his brother. First, Raul lifted restrictions on Cuban farmers, now he is letting Cuban barbershops work for profit.

Questions:

Can the U.S. re-learn the benefits of a free market from Cuba? Or will the lessons learned there fall on deaf ears?

Why does the media portray capitalism as evil in free societies, yet celebrate when communist countries turn capitalistic?

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By Michael Voss BBC News, Havana

Cuba is turning over hundreds of state-run barber shops and beauty salons to employees in what may be the start of a long-expected privatisation drive.

All barbers and hairdressers in shops with three seats or fewer will be allowed to rent the space and pay taxes instead of getting a monthly wage.

The retail sector has long been derided for poor service and rampant theft.

The country's former President, Fidel Castro, nationalised all small businesses in 1968.

'Slow and cautious'

Now his younger brother and successor Raul Castro is trying to modernise the system without jumping to full-scale capitalism.

Other communist countries such as China and Vietnam have long since pushed through market reforms while maintaining political control.

President Castro's first economic reforms involved giving unproductive state-owned land to private farmers.

Some taxi drivers are allowed to work for themselves.

This is his first attempt to deal with shops in the retail and service sector.

It is likely to be a gradual process, though.

These beauty salon changes have not been officially announced or mentioned in the state-controlled press.

In a recent speech to the Young Communist League, Raul Castro acknowledged that people were impatient for change but warned that he planned to move slowly and cautiously.

See the BBC Video here.

Destruction as Development

How could anyone confuse the violence and destruction of war and natural catastrophe with economic development? Because they concentrate only on what they can see, and they ignore what they cannot...



From the Atlas Network

Haven't We Learned Anything?

In a recent op-ed piece, Fritz Hollings (former senator from South Carolina), touted that we should stop trying to save money in order to pay for Medicare. Instead, his brilliant solution is to create a VAT tax. Just 1% tax - what could be the harm...? Oh, and another 2% to pay down the debt.

History lesson - Our first income tax was only 7% (top bracket). Forty years later it was 92%.

Economics lesson - VAT taxes, tariffs, etc, do in fact increase the price of imported goods. It is not a "free lunch."

A 3% VAT tax would only open up yet another floodgate of government spending at our expense. Instead, I have a nifty idea: Cut government spending.

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"We shouldn't be wasting time waiting to see whether we can save $500 billion from Medicare. The 1 percent VAT can guarantee that health care reform can either be paid for or the extra money used to pay down the debt. Then the other 2 percent VAT should be dedicated to paying down the debt.

For those nervous about taxes, let's vote. Any voting against this approach will be voting against paying for health care, against paying down the debt, against relieving Corporate America of income taxes, against promoting exports by 32 percent, against stemming the flow of off-shoring jobs, and voting against middle-class jobs and saving the economy of the United States."

- Ernest "Fritz" Hollings

Read the entire op-ed here.

Che Guevara - Killer Chic

From Reason.TV

“We’re rightly horrified by fascist murderers like Adolph Hitler,” says reason.tv’s Nick Gillespie. “Why aren’t we also horrified by communist killers?” Certainly, Che’s body count isn’t anywhere near Hitler’s. But what about someone Che idolized, someone whom he might have liked to wear on his chest?

“Che, Castro, all the communist regimes idolized only one thing that Mao personifies—violence.” Kai Chen grew up in China under the reign of Mao Zedong. Although he won gold medals for China’s national basketball team, Chen’s was far from the celebrity life of an NBA star. Says Chen, “You have no right to talk, and you have no right to think.”

And yet, like Che, Mao’s image is becoming an increasingly popular way to move merchandise. You can buy Mao t-shirts, mugs, caps—you name it. Near Chen’s Los Angeles home there’s even a restaurant called Mao’s Kitchen. “Can you imagine a restaurant called Hitler’s Kitchen?” asks Gillespie.

View the REAL Che Guevara HERE

Down on the Farm in Cuba

Free Market or Bust


From the Economist Online Edition:

What has gone wrong? Cuba’s state-owned farms are massively inefficient, and rarely provide more than 20% of the country’s food needs. Three hurricanes in 2008 made matters worse. Raúl Castro has acknowledged the problem, and introduced some changes. Idle state land has been leased to private farmers. The government has raised the guaranteed prices it pays for produce. Farmers can now legally buy their own basic equipment such as shovels and boots, without having to wait for government handouts.



READ the entire story here

I.M.F. Warns Wealthy Nations on Debt

From the New York Times - March 21, 2010

The global economic crisis has left “deep scars” in the fiscal balances of the world’s advanced economies, which should begin to rein in spending next year as the recovery continues, the No.2 official at the International Monetary Fund said Sunday in Beijing.

In a speech at the China Development Forum in Beijing, the I.M.F. official, John Lipsky, who is the deputy managing director, offered a grim prognosis for the world’s wealthiest countries, which are at a level of indebtedness not seen since the aftermath of World War II.

The ratio is expected to be close to or to exceed 100 percent for five members of the Group of 7 countries — Britain, France, Italy, Japan and the United States — by 2014. Canada and Germany are the other G-7 members.

Click here to see the entire article


Click here for our "Debt Clock" ... (Warning- This is scary)

John Stossel - March 25th

We will be partnering with the Initiative for Public Choice and Market Process (IPCMP) for our next meeting. As part of the IPCMP's Adam Smith week, we welcome John Stossel of the Fox Business Network to Charleston.

His lecture, "Freedom and its Enemies" will take place on March 25th at 7pm at the Physicians Auditorium.

For more information on this event, and to see the entire schedule for Adam Smith Week, click here.

All events are free and open to the public.

The Physicians Auditorium is located at the corner of Glebe St and George St on the College of Charleston's Campus.

The House That Uncle Sam Built

Please join us in welcoming Dr. Peter Boettke. Peter is a professor for the Study of Capitalism at the Mercatus Center & Professor of Economics at George Mason University.

His topic for us will be:

"The House That Uncle Sam Built"

When:
February 16th
Reception begins at 6pm
Speaker at 7pm

Where:
The Harbor Club
35 Prioleau Street
Charleston, SC

Please RSVP by emailing us here: bastiatsociety@gmail.com


About Dr. Peter Boettke:

Peter J. Boettke is the Deputy Director of the James M. Buchanan Center for Political Economy, a Senior Research Fellow at the Mercatus Center, and a professor in the economics department at George Mason University. Boettke was born and raised in New Jersey. He received his BA in economics from Grove City College and his PhD in economics from George Mason University. Before joining the faculty at George Mason University in 1998, he held faculty positions at Oakland University, Manhattan College and New York University. In addition, Boettke was a National Fellow at the Hoover Institution for War, Revolution and Peace at Stanford University during the 1992-1993 academic year. He has been a visiting professor or scholar at the Russian Academy of Sciences in Moscow, the Max Planck Institute for Research into Economic Systems in Jena, Germany, the Stockholm School of Economics, Central European University in Prague and Charles University in Prague.

In 1998, Boettke assumed the editorship of the Review of Austrian Economics (Kluwer Academic Publishers). The Review of Austrian Economics was founded by late Murray Rothbard in mid-1980s to promote research and the further development of the Austrian School of Economics. Prior to assuming that editorship, Boettke was the editor of Advances in Austrian Economics. Since the mid-1990s, Boettke has also been the Director of the Advanced Summer Seminar in Austrian Economics, a post he took over from Israel Kirzner. Boettke is a former President of the Society for the Development of Austrian Economics.

Boettke is currently involved with the Global Prosperity Initiative, which is part of the Social Change Project at the Mercatus Center at George Mason University. GPI was founded with the purpose of encouraging an analytical narrative approach to the institutional analysis of development and transition studies. This research seeks to combine an ethnographic style of field research with the analytical structure of economic reasoning to explore the fundamental questions of why some nations are rich and others are poor, and the broad implications of globalization for the liberation of humanity from poverty.