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Video Game Shows the Economic Benefits of Legalizing Marijuana

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Video Game Shows the Economic Benefits of Legalizing Marijuana

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In a truly free society, individuals would be able to provide the products consumers are after without having to deal with the restrictions imposed by bureaucrats.

Hemp IncWhen analyzed closely, private regulatory practices promoted within the marketplace are often much more efficient than regulations imposed by government officials who often are responding to potential threats instead of responding to legitimate market demands, putting a strain on job creators and consumers, who end up paying more—sometimes with their lives—for the product they want or need.

But as states begin to accelerate the process to legalize marijuana, the debate is finally shifting. Now, we’re finally talking more about the health and financial benefits of marijuana legalization than the legalization’s downside.

That’s why Hemp Inc. matters.

According to VICE News, the video game produced by HKA Digital Studios allows users to grow and sell weed while interacting with smokers, who sometimes happen to be celebrities. As a result of their economic ventures, these pot entrepreneurs are able to build marijuana empires. Unfortunately, that’s only currently—and legally—possible in real life if you move to states like Colorado and Washington.

The app was launched on April 26, but few news outlets covered the story.

Regardless of how popular the app becomes, the message it conveys is a powerful one. Despite the drug war, demands will always be met, no matter how many laws Congressmen pass. Once you lift barriers, however, industries flourish—including health industries—and consumer safety becomes a priority. Instead of assaulting people’s freedoms under the guise of safety, lawmakers are being increasingly reminded that they don’t know what is best for everyone. And that’s OK. Leaving it up to the individual is the only moral alternative.

So instead of logical arguments alone, anti-drug war advocates now have a new tool that demonstrates just how easily individuals are able to benefit themselves while benefitting others once marijuana is legal.

Instead of violent, bloody wars between gangs over street territory, the relationship between marijuana producers, sellers, and consumers is slowly becoming more like the relationship between the farmer, grocer, and the consumer—and that’s a positive development.

Unlike a real war, the drug war is an effort that targets a behavior seen as immoral, not a real enemy. But we have a modern historical example of how that type of war doesn’t lead us anywhere. Why are we still hesitant to put an end to this madness?

Better Economic Prospects, Not Incarceration, Behind US Crime Decline

in Criminal Justice, Economic Liberty, Economics, Liberator Online, News You Can Use, Personal Liberty, Taxes by Advocates HQ Comments are off

Better Economic Prospects, Not Incarceration, Behind US Crime Decline

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For the past two decades, crime in the United States has declined considerably. Compared to the crime rate of the early 1990s, US crime rates have fallen about half while violent crime has fallen by 51 percent. Between 1991 and now, property crime has fallen by 43 percent.

Sign But while many understand that better economic prospects tend to help keep the crime rate low, many tend to attribute the considerable reduction to a series of factors that, when closely reviewed, have little to do with safety.

Some of the most common arguments brought up by experts include the expansion of enforcement agencies, “tough on crime” policies, and increasing incarceration rates. Some have even gone as far as claiming that legalized abortions had helped to boost safety, ignoring the fact that abortion rates have declined over the past decades.

But according to research on the subject by New York University School of Law’s Brennan Center for Justice, socio-economic factors, not mass incarceration, has helped reduce the crime rates across the country.

According to the paper, increasing incarceration has had no effect on the drop in crime rates since 2000. When it comes to violent crime, the rate is also close to zero. States like Texas, California, Michigan, New Jersey, and New York have all seen a drop in crime as incarceration rates have also dropped.

Between 2000 and 2013, the study concludes, growth in income and decreased alcohol consumption have been the top factors responsible for the drop in crime, along with a boost in consumer confidence. Between 1990 and 1999, factors that helped to push crime rates down included decreased unemployment, growth in income, decreased alcohol consumption, and increased incarceration and police numbers.

But as the number of police officers increases, the number of low-level offenders behind bars shoots up. According to Brennan Center for Justice, the fact we have more low-level offenders in jail now than before impacts the crime reduction effect.

From the study:

“The incarceration rate jumped by more than 60 percent from 1990 to 1999, while the rate of violent crime dropped by 28 percent. In the next decade, the rate of incarceration increased by just 1 percent, while the violent crime rate fell by 27 percent.”

During a recent justice reform event organized by the grassroots organization FreedomWorks, Molly M. Gill, a former prosecutor who’s now the Director of Federal Legislative Affairs for Families Against Mandatory Minimums Foundation (FAMM), pointed out that “very few violent offenders end up in federal prisons.” Instead of violent criminals, federal prisons hold a great number of non-violent drug offenders, who account for more than 25 percent of the federal budget every year. Instead of rehabilitating them once they are inside the system, U.S. Justice Action Network Deputy Director Jenna Moll told attendees, prisons are often seen as the easy way out. During the FreedomWorks event, Moll also talked to attendees. She pointed out that a “national survey found prisoners prefer one year in prison versus five years probation,” adding that “if even prisoners know” prison is “the easy way out,” it proves that the system is not working.

In a 2000 article for the Foundation for Economic Education (FEE), economics professor Bruce Benson explained that, while few studies on the matter have been carried out, “Private security employment has accelerated since 1970,” leading him to believe that the “private security market … the second fastest growing industry in the United States” may have something to do with the drop in crime rates. To the economist, private-sector responses to crime should be studied as a major factor behind crime decline.

After Brexit, Is Amexit Next? This ​Libertarian Congressman Says Yes

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After Brexit, Is Amexit Next? This Libertarian Congressman Says Yes

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After Britons voted to leave the European Union on June 23, libertarian-leaning Rep. Thomas Massie (R-KY) decided to lead the charge to get the United States out of the United Nations, attaching the term “Amexit” to the endeavor.

ThomasMassieIn a post on his official Facebook page, Massie shared the full text of HR 1205, the American Sovereignty Restoration Act, which was introduced in 2013 but died in the previous Congress.

The bill was cosponsored by Massie, and according to the congressman, it would effectively keep the United States from spending taxpayer money on the organization, prevent US Armed Forces from serving under UN command, put an end to diplomatic immunity for foreign UN members in the country, close the UN headquarters in New York, and terminate the country’s membership with other organizations such as UNESCO and WHO. The bill would also repeal the United Nations Environment Program Participation Act.

​Mentioning the fact many of the countries involved with the UN are run by dictators, Massie said that binding US citizens to decisions made by tyrants goes against the US Constitution, which is the “supreme law” of the land.

Massie went on to say that the UN gives “cover to corrupt governments” while preventing “citizens from owning guns.” In the “best case,” Massie responded in a comment, “the UN is a bureaucratic waste of American taxpayers’ money.”

Dr. Ron Paul has recently written a column for the Ron Paul Institute for Peace and Prosperity calling for a US exit from NATO.

According to the former congressman, NATO is a “Cold War relic” that “survives only by stirring up conflict and then selling itself as the only option to confront the conflict it churned up.”

Shortly after the Brexit vote, the head of the Texas Nationalist Movement used Twitter to call on Texas Gov. Greg Abbott asking him to schedule a statewide referendum on the independence of the Lone Star state.

Last year, the Texas Republican Party rejected an initiative that would give voters the opportunity to vote to leave the union. If the measure had become a non-binding ballot initiative, it would have stated that the state of Texas would “reassert the prior status as an independent nation” if “the federal government continues to disregard the Constitution.”

When talking secession in his book Omnipotent Government, economist and philosopher Ludwig von Mises said that a nation doesn’t have the right to tell a province that it belongs to a large body of power. “A province consists of its inhabitants. If anybody has a right to be heard in this case it is these inhabitants,” he added. “Boundary disputes should be settled by plebiscite.”

In the book Liberalism, Mises goes further, stating that if there’s a way to grant the individual with the right of self-determination, “it would have to be done.”

Did the Government Offer a Contract to New Balance in Exchange for TPP Support?

in Business and Economy, Economic Liberty, Economics, Liberator Online, News You Can Use, Trade & Tarrifs by Comments are off

Did the Government Offer a Contract to New Balance in Exchange for TPP Support?

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Government has a way of selling incredibly bad economic deals by calling them free trade agreements. Haven’t you noticed?

ShoesThe Trans-Pacific Partnership, or TPP, is a trade agreement between Pacific Rim countries, including the United States, that hopes to “promote economic growth; support the creation and retention of jobs; enhance innovation, productivity and competitiveness; raise living standards; reduce poverty in our countries; and promote transparency, good governance, and enhanced labor and environmental protections.” But according to information released by WikiLeaks, only five of TPP’s 29 sections deal with trade.

At the time, WikiLeaks’ Julian Assange claimed that many of the other sections dealt with Internet regulations, which includes details on what specific type of information Internet service providers will be required to collect once TPP is enacted.

To former congressman Ron Paul, TPP is dangerous because of the several items listed in its sections that benefit special interest groups. Instead of opening up the market, Paul argues, TPP would boost “world government,” meaning that international nations would unite for all the wrong reasons, such as spying on its citizens. Opening up the trade among individuals in different parts of the globe, Paul explains, has little to do with the effort.

To folks at Tech Dirt, TPP has always been bad, mostly because of the issues mentioned previously. But as reports claiming the US government has allegedly pressured a shoe company to back TPP in exchange for exclusive contracts hit the news, we learn that power players behind the TPP might be just as corrupt as the politicians under fire in South America over one of Brazil’s largest embezzlement schemes in recent history.

According to New Balance, an American footwear company from Boston, Massachusetts, the US government allegedly promised the shoe company would get a “big government contract” if the company stood by TPP.

Unfortunately for New Balance, the deal never came through.

According to the Boston Globe story, It wasn’t until 2015 that New Balance chose to stop criticizing the deal. Until then, the company resisted supporting the pact for years. If what New Balance now alleges is true, executives only chose to change their tune after the Department of Defense claimed it would consider choosing New Balance for a contract to outfit recruits.

So far, New Balance hasn’t received any official contract proposal, and New Balance now say Pentagon officials are intentionally delaying the purchase.

While the US government claims that the contract problem is not associated with TPP in any way, the company is now renewing its battle against the TPP. For all the wrong reasons.

According to Tech Dirt, New Balance claims that while most of the uniform purchased for the military is made in the United States, sneakers are the exception. With that in mind, New Balance decided to offer its products to the government, hoping to obtain a contract. That’s when a representative for the current administration “more or less” asked New Balance to accept a compromise version of the trade deal in exchange for a pledge of help in pressuring the Department of Defense to expedite the government’s purchase of American-made shoes.

According to the Defense Department, New Balance didn’t get the contract because its sneakers aren’t durable or inexpensive enough. Regardless of what the government alleges, Tech Dirt claims, the idea that the government may have offered the company deal if it sided with its trade deal is “highly questionable.”

Want to Fight Income Inequality? Enact Extensive Regulatory Reforms

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Want to Fight Income Inequality? Enact Extensive Regulatory Reforms

This article was featured in our weekly newsletter, the Liberator Online. To receive it in your inbox, sign up here.

Many praised Vice President Joe Biden for talking about the “enormous concentration of wealth” in the hands of “a small group of people,” but to Mercatus Center’s economists and researchers Patrick A. McLaughlin and Laura Stanley, the comments seem out of touch.

BarberWhile politicians from both major political parties often refer to income inequality as an issue that must be combatted, anti-poverty policies are mostly ineffective. In order to further their agenda, many of the politicians who promise to “do something” about the inequality problem often resort to higher tax rates and higher minimum wage policies once they get elected, making it even harder for uneducated and inexperienced individuals to make a living.

Being oblivious about the unintended consequences tied to minimum wage policies and higher taxes, researchers and economists from the Mercatus Center say, is what keeps our economy growth sluggish, and our poor from lifting themselves out of poverty.

Instead of repeating the same mistakes by passing more inefficient policies, free market advocates believe that there’s only one policy that will solve the so-called “inequality” problem for good: regulatory reform.

According to a Mercatus study released recently, regulation can be related to income inequality.

Researches argue that erecting barriers to entry ends up discouraging entrepreneurs at the bottom rungs of the income ladder to start a business. What researchers also found is that countries with more restricting entry regulations have higher levels of measured income inequality. Restrictions to entry makes the higher share of income go directly to the top 10 percent of earners, which is why regulatory reform is so important.

Occupational licensing and other policies that prolong the permitting processes are great examples of barriers that increase the cost of doing business. As a result of the enactment of these policies, low-income earners find it hard to join the market.

According to another recent study, the quality of service provided in many areas seldom changes when licensing is introduced. Currently, all states require licenses from truck drivers, pest control applicators, and even cosmetologists, making it harder for individuals to enter the market without a permit. In some states, even florists need a license to do business. With so many barriers, it’s no wonder low-income individuals prefer to steer away from these occupations, mostly because the cost of entering the market is too high.

While workers in the United States face fewer restrictions to enter the market when compared to several other countries, the regulatory cost of doing business is still too high. If America is serious about putting an end to income inequality, researchers argue, we must put an end to entry regulations that keep entrepreneurs from entering the market legally, not enact more barriers whose unintended consequences are bound to create even more inequality.

Why aren’t free markets dominating in countries with weak or failed governments?

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Why aren’t free markets dominating in countries with weak or failed governments?

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Question: If a free market with no government oversight and protections for the People is a successful model, then how come countries with failed/weak governments are not mopping up all the worlds’ business?

Free Market

Short Answer: If by “failed/weak” governments you are referring to the Third World, some “mopping up” is indeed occurring. Since governments that exploit their people the most usually have the lowest wages, U.S. and European manufacturers are utilizing the “cheap labor” there. If by “failed/weak” governments you mean something else, please give me more detail and I’ll try to answer you.

By the way, a free market is not one without “protections for the People.” Truly free markets usually require those who defraud or harm others to compensate their victims; this usually keeps them more honest than government oversight does. Indeed, the penalties for violating government regulations usually do little or nothing to restore victims and may even cost them more. For example, those polluting river water were usually successfully sued by those downstream for damages in both Great Britain and the western territories of the U.S. before they became states). Once the U.S. government took over the waterways, however, downstream landowners rarely got compensation, even from the fines imposed by government. They not only had to put up with the pollution, they had to pay taxes for the government oversight.

Makes you wonder who is being protected from whom, doesn’t it?

The Sharing Economy is Challenging Labor Laws, Are Lawmakers Paying Attention?

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The Sharing Economy is Challenging Labor Laws, Are Lawmakers Paying Attention?

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Ride-sharing apps are revolutionizing how people across the country commute. But with the growth in popularity, companies like Lyft and Uber become easy targets for regulators and lawmakers, mostly because laws already in place protect industries that are already losing their appeal due to competition.

Last month, Lyft settled a class-action lawsuit brought by its California drivers. With the settlement, Lyft upheld the freedom of drivers locally by avoiding to classify them as employees. By allowing participating motorists to remain as contractors, Lyft gave drivers the flexibility to control when, where, and for long they work through the platform.

Lyft To many, this was a step in the right direction. But to Christopher Koopman, a research fellow with the Project for the Study of American Capitalism at the Mercatus Center, this victory is not enough.

In an article for The Hill, Koopman says the settlement fails to resolve other issues tied to worker classification laws.

Since sharing economy apps like Uber and Lyft do not easily fit within current state and federal labor laws, Koopman explained, “challenges [to] the status quo of government regulation” will continue to present a legal headache to company executives—and drivers.

In places like New York City, Uber and Lyft stood up to taxi regulations. By doing so, sharing economy apps helped to boost transportation choices for low-income households. At the federal level, Koopman explained, Uber and Lyft are now challenging an 80-year-old law known as Fair Labor Standards Act of 1938, which defines what an employee is. According to Koopman, the Department of Labor’s own interpretations of the 80-year-old law do nothing to clarify the issue, making the lives of individuals relying on Lyft and Uber to pay their bills much more complicated in the long-term.

If this issue is not fixed at both federal and state levels, Koopman says, Uber and Lyft will continue to battle lawsuit after lawsuit. And leaving the decision to the courts, Koopman stated, is “far from ideal.”

As labor laws remain unchallenged by lawmakers, Koopman warns that the sharing economy is not the only one that will suffer.

Using IRS data, Koopman found that the growth in non-employment working arrangements “predates the advent of the sharing economy.” In 2010, the Government Accountability Office estimated, at least 40 percent of workers in America operated under “alternative arrangements.” If their choice had been questioned legally, they would have lost their arrangements, therefore making it hard for folks to make ends meet.

To loosen the restrictions by changing legal definitions could prove beneficial to workers across the country, so why rely on the courts? If that’s the case, Koopman warns, juries, or “ordinary folks simply working with square pegs and round holes” will be tasked with the duty of choosing who should be classified as employees.

Will they choose solutions that boost freedom instead of giving government even more power?

Is American Entrepreneurship Dead?

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Is American Entrepreneurship Dead?

This article was featured in our weekly newsletter, the Liberator Online. To receive it in your inbox, sign up here.

Promises of a better future post the 2008-2009 recession injected new confidence in the American economy. With the President Barack Obama administration’s push to use public money to stimulate the economy back to recovery, many believed that a full comeback was in order.

But years after the implementation of the stimulus plan, corporate debt continues to increase due to the federal reserve’s meddling, and the participation rate in the labor force continues to fall.

Entrepreneur

As the current administration claims falling unemployment rates prove the stimulus worked, it’s easy to see why so many believe that things are “back to normal.”

But according to Yonathan Amselem, an asset protection attorney in Washington, D.C., things are far from “normal.”

In an article published by the Mises Institute, Amselem explains that after a market crash, the unemployment rate eventually drops, naturally. He also reminds us that the Obama administration took over after the market crash. And that the so-called “recovery” may have just been a sign of a process that would have happened with or without the stimulus.

He also argues that a review of the type of industries that have been growing since the stimulus plan was put into action prove that the creation of jobs alone has nothing to do with economic recovery.

“We are pumping out an army of waiters, social workers, and associate professors with worthless six-figure degrees they have no hope of paying off in this life or the next,” Amselem argued. Instead of “high value, goods-producing workers,” America is producing workers who do not rely on innovation.

Individuals, Amselem argues, are not being encouraged to start businesses. Instead, they seem to believe that they are perfectly capable of turning “a six-year sociology degree into a job that doesn’t involve bringing people mimosas for brunch.”

But the workforce is not to blame for this shift in leading industries.

Instead, Amselen argues that the lack of incentives tied to entrepreneurship is forcing countless Americans to keep their dreams and aspirations locked away. As businesses now fail at a greater rate than they start, free market advocates like Amselen remind us that people are discouraged to try out on their own.

To the D.C. attorney, America’s structure of production has been disrupted by the political class in a dramatic way, making workers less competitive and forcing the entire nation to carry a very heavy debt burden while keeping the entrepreneurial spirit stuck under a mountain of bureaucracy.

As free market advocates continue to make the case against overwhelming regulations, urging the public to look at government intervention as a means to hinder economic development, media outlets and influencers often accuse them of being against the poor.

But economic growth can only be accomplished when competition and freedom are reinstated. Being against the poor means being pro-government intervention in the economy, which forces those with pauper means to resort to the black market for their needs.

Aluminum Industry Wants Tax Deal, but Nobody Wants to Cut the Red Tape

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Aluminum Industry Wants Tax Deal, but Nobody Wants to Cut the Red Tape

This article was featured in our weekly newsletter, the Liberator Online. To receive it in your inbox, sign up here.

Many think of crony capitalism as the source of all problems we face as a nation. They are not entirely wrong.

Take the domestic aluminum industry for instance. Despite the taxpayer investment, producers are losing their share of the market. Without freedom to compete, members of the industry take part in political games, using their influence with state governments and Washington politicians to beg for privileges that no other aluminum producers enjoy. The result? Major trouble for the consumer, employer, and worker.

Aluminum

In America, there are three companies that produce primary aluminum. Alcoa is the largest producer, operating multiple primary plants in New York, Washington, Indiana, and Texas.

In early November 2015, Alcoa announced that it would have to permanently close its Massena West smelter in New York. At the time, town supervisor Joe Gray said that the jobs Alcoa would take away if the smelter closed would be “next to impossible to replace,” considering the aluminum giant has been the major employer in the region for quite some time.

By late November, however, a deal was reached and the upstate New York smelting plant was saved. What happened? New York Governor Andrew Cuomo unveiled a $69 million incentive package that benefited Alcoa. At least 600 jobs were saved.

The plan was backed by Cuomo and Sen. Charles Schumer (D-NY), who made the announcement at the Alcoa plant in Massena. As union bosses celebrated the special relationship between the New York government and industry leaders, the incentives weren’t widely criticized, mainly because tax incentives aren’t seen as handouts by many. Instead, people often believe that tax incentives are good.

During the announcement event, Cuomo claimed that the incentives plan “is the state’s way of stepping up.” Yet none of those present were able to criticize the existing red tape that makes it so hard for companies to function in America in the first place.

If the cost of doing business in the country was not an obstacle, more competitors would fill up the gap, and cheap aluminum coming from China would have a hard time staying relevant. Instead of working to remove red tape and help all entrepreneurs and existing businesses to flourish, the state decided to give one group access to privileges that others in the same industry simply do not enjoy.

But as Alcoa enjoys the $30 million it got from the New York incentive package, things continue to look bad for the aluminum producers and its employees. Except now, the issue is not New York, it’s Indiana.

According to IndyStar.com, southwestern Indiana residents are now concerned that the Alcoa smelter in their state will shut down, shedding 600 jobs in the process. Early in January 2016, Alcoa announced it would be closing its Warrick Operations smelter by the end of March. This is a “major economic event,” said Warrick County Chamber of Commerce director Shari Sherman. But to Alcoa, the shutdown makes sense because the Indiana facility is not “competitive.” Meaning the cost of keeping it open is a burden.

The facility has been operating in Indiana for the past 55 years. As the smelter closes, multiple families brace for the impact. As workers struggle, so do companies that are finding it much harder to compete. The issue? They have a hard time covering the costs of doing business in America.

If workers and consumers are serious about seeing fewer job losses in their states and more prosperity, they’d be urging lawmakers to cut the red tape, not backroom deals.

Charles Koch Blasts Corporate Welfare

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Charles Koch Blasts Corporate Welfare

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It’s amazing how Charles and David Koch have become the boogeymen of progressives. Democratic politicians, in their class warfare messaging, often reference the multi-billionaire brothers, who frequently contribute to free market causes and Republican candidates.

In reality, the Koch brothers, both of whom are libertarians, hold views that are overlap with progressive thought. They’re skeptical of the United States’ foreign policy, support same-sex marriage, and are critical of corporate welfare.

Free-Market

Writing in Time on Wednesday, Charles Koch repeated his criticism of corporate welfare. “According to a New York Times poll released earlier this year, most Americans believe only the wealthy and well-connected can get ahead these days, leaving everyone else to fall farther behind,” Koch wrote. “I find this very disturbing – because they are right.”

The difference between Koch and progressives is that he doesn’t see government regulation and mandates as the answer to this problem; he sees the government as the problem.

“I have devoted most of my life to this cause. For more than 50 years, I have sought to understand the principles that make free societies the most successful at enabling widespread well-being for everyone – especially the least advantaged. These principles include dignity, respect, tolerance, equality before the law, free speech and free markets, and individual rights,” Koch explained. “If we want to create greater well-being and opportunity for all Americans, we must re-establish these principles. The benefits will be incalculable, flowing to people at every level of society – not just the politically connected.”

“To achieve this vision,” he continued, “we must undo decades of misguided policies that tend to fall into two broad categories: barriers to opportunity for the many and special treatment for the few.”

Koch said, “[T]he role of business is to provide products and services that make people’s lives better.” But, he notes, businesses often bring “harm” on people by taking handouts from the government. What Koch said may shock some.

“The tax code alone contains $1.5 trillion in exemptions and special-interest carve-outs. The federal government also uses direct subsidies, grants, loans, mandates, bailouts, loan guarantees, no-bid contracts and more to help the lucky few with the most lobbyists,” he wrote. “Overall, according to George Mason University’s Mercatus Center, corporate welfare in Washington, D.C. costs more than $11,000 per person in lost gross domestic product every year—$3.6 trillion lost to special favors for special interests.” He added that this doesn’t include regulations promulgated to benefit certain special interests.

Whether progressives like it or not, the Koch brothers are much more than they’ve been made out to be. Of course, as noted, they don’t believe government is the answer and, let’s be honest, it’s not. The problem is, far too few in Washington, including many self-identified progressives, aren’t interested in taking on special interests, largely because they’ve been bought and paid for by them.

Raising the Price of Milk: A Minimum Wage Metaphor

in Communicating Liberty, Economics, Liberator Online, Libertarian Answers on Issues, Libertarian Stances on Issues, One Minute Liberty Tip by Sharon Harris Comments are off

(From the One-Minute Liberty Tip section in Volume 19, No. 15 of the Liberator Online. Subscribe here!)

First, the bad news.

A strong majority of Americans favor increasing the minimum wage. A recent Reason-Rope poll asked Raising the Price of Milk1,003 American adults this question: “The federal minimum wage is $7.25 per hour. Do you favor or oppose raising the minimum wage to $10.10 per hour?”

Fully 67 percent supported raising the minimum wage.

But there’s more.

When the poll further asked: “What about if raising the minimum wage caused some employers to lay off workers or hire fewer workers? Would you favor or oppose raising the minimum wage?” the response changed dramatically. 58 percent opposed raising the minimum wage, and only 39 percent favored it.

And when asked: “What about if raising the minimum wage caused some employers to raise prices? Would you favor or oppose raising the minimum wage?” the vote was split almost evenly.

And that’s the good news. We can change minds and win the majority to our side on this issue — if we help people understand the true, terrible consequences of minimum wage laws.

How can we do that? It’s not easy. To many people, a higher minimum wage seems compassionate. It even seems to make economic sense. As one state representative said earlier this year: “Raising the minimum is a win-win. If you put an extra $700 or $800 in a worker’s pocket, that money is going to be spent. Everybody will benefit.”

One problem is that most people aren’t employers; they don’t “buy” labor. They don’t think in those terms.

But most people do buy milk. And that suggests a simple analogy that can cut through foggy thinking and help people understand why the minimum wage produces such bad results.

Ask your listeners: What if the government decided to mandate an increase in the retail price of milk? Suppose the price of a gallon of milk was doubled?

Would that help farmers, dairies, and grocery stores? Would it mean more money for them? After all, it would only be a small increase for most milk buyers, just a few dollars per week.

Ask your listener what they think would happen if the cost of milk doubled.

How would people react? Would people buy more milk, or less?

For some people, the price increase wouldn’t matter. They’d just keep on buying milk.

But for many consumers, the price increase would make a big difference. Struggling families would be hit especially hard.

Many people would start exploring milk substitutes. Instead of buying whole milk, they might switch to cheaper soy or almond or rice milk.

Others would simply cut back on the amount of milk they consume.

Still others might water down their milk after purchasing it, to make it stretch further.

Further, the cost of items that used milk — cheese, ice cream, butter, etc. — would also rise. Consumers would buy less of those items, too. And manufacturers, just like consumers, would switch to milk substitutes whenever possible, in order to keep the prices of their products as low as possible.

The bottom line? Consumers would buy less milk. And, ironically, many farmers — the very people the increase was supposed to help — would lose money or even go out of business.

Which brings us to the minimum wage.

Employers buy labor, not milk. But if you increase the cost of labor, employers will act in much the same way that our imaginary milk consumers did.

Some employers will no longer be able to afford to buy labor at the price mandated by the new minimum wage. As a result, some jobs will shrink (fewer bag boys, fewer check-out counters, fewer waiters, fewer warehouse workers, etc.). Some jobs will disappear altogether. (Remember movie ushers, and car attendants who pumped your gas and checked your oil for you?)

Further, as the price for labor is incorporated into the price of goods, prices will go up for some products, and others may simply disappear from store shelves.

Some employers will look for labor substitutes, just like our consumers above looked for milk substitutes. They will use technology. Check-yourself-out counters. Automation. Robots. When labor reaches a high enough price, substitutes suddenly become cost-effective. Even moving to a new country with cheaper labor costs may be feasible.

Still others will “water down” the work. They will hire fewer people, or fewer full time employees, and stretch the work out between them.

Most people understand that if you forcibly increase the cost of milk, less milk will be sold, and ultimately both consumers and farmers will be harmed.

This simple metaphor lets them see the same is true of labor, too. A mandated increase in the price of labor, via the minimum wage, brings fewer jobs, higher prices for goods and services, harder work loads, and other negative consequences.

That’s not what people want. When they learn such these things are consequences of the minimum wage, they will no longer support it.

(To learn more arguments against the minimum wage, see “Minimum Wage Maximum Damage” by economist Jim Cox, published by the Advocates. This short easy-to-understand booklet devastates every argument for the minimum wage.)

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Free Markets Nurture Empathy

in Communicating Liberty, Economic Liberty, Economics, Liberator Online by Michael Cloud Comments are off

Free markets(From the Persuasion Powerpoint section in Volume 19, No. 10 of the Liberator Online. Subscribe here!)

Would you like to live in a world where empathy is both virtuous and profitable?

A world where it pays to meet the wants and needs of others?

Look for it in the private sector. Private enterprises. Free markets.

Without empathy, private businesses and free markets wither and die. With empathy, they survive and thrive.

Each business must be guided by empathy for their customers’ wants and needs and budgets.

Or the customers will seek out and patronize a business that does.

Every retail business faces this truth each day.

What would attract customers to our store?

How do our shoppers want to be greeted and treated?

What store layout and merchandising would appeal most to our customers?

What kind of employees would our customers be most comfortable with?

What do our shoppers expect from our employees? Information? Guidance? Courtesy? Close assistance, or room to roam?

What prices and terms make it easiest for our customers to buy?

What do our shoppers think? What do they know? What do they need to know? What do they want? What are they looking for — that no one else has offered them?

Empathy guides businesses toward the right solutions. The answers that open the wallets and purses of their customers.

Private enterprises instill a deep and abiding empathy in each of us who work there.

Free markets nurture empathy.

The Piketty Challenge to Capitalism

in Economic Liberty, Economics, Liberator Online by James W. Harris Comments are off

(From the Intellectual Ammunition section in Volume 19, No. 8 of the Liberator Online. Subscribe here!)

Capital - Thomas PikettySeems like everybody is talking about French left-wing economist Thomas Piketty’s new book Capital in the Twenty-First Century.

It rocketed to the top of the New York Times bestseller list.

Lefty pundit Paul Krugman hails it as “the most important economics book of the year — and maybe the decade.”

An Esquire review was entitled “The Most Important Book of the Twenty-First Century.”

New York magazine described Piketty as a “Rock-Star Economist.”

The title of an article on Bill Moyers website crowed: “Piketty’s Bombshell Book Blows Up Libertarian Fantasies.”

Even the Pope tweeted a thumbs-up to the Piketty thesis: “Inequality is the source of social evil.”

No doubt about it: proponents of massive government intervention and coercive wealth distribution are praising Thomas Piketty’s new book to the skies.

Piketty’s tome is seen as a devastating criticism of the very fundamentals of capitalism. Basically, Piketty examines an enormous amount of historical economic data to conclude that capitalism inevitably, over time, promotes huge inequalities in wealth. This wealth becomes ever more concentrated in just a tiny percentage of the population, leaving the rest of us far poorer and far less powerful politically.

This inequality, Piketty believes, poses a serious threat to the people of the world (except the wealthy). The solution? Although he himself suggests it is probably unrealistic, at least for the moment, he urges a massive worldwide tax on wealth to radically reduce income inequality.

And what a tax it is! For the U.S. Piketty wants a steeply progressive income tax with a top rate of 80% on incomes starting at around $500,000 or $1 million, as well as a 50%-60% tax rate on incomes as low as $200,000, which he confidently asserts “would not reduce the growth of the US economy.” To make sure the beast of inequality remains slain, he suggests an annual wealth tax up to 10% on the largest fortunes, and grabbing up to 20% of lesser estates.

No, he’s not kidding. And the main purpose of this tax is not to flood governments with revenue — though it would, at least at first — but simply to reduce income inequality. Indeed, he has surprisingly little concern with how inefficiently or destructively government might use this money.

These proposals may sound downright insane to libertarians and other market advocates, but at the moment Piketty’s book is sweeping the country. So libertarians will want to learn about this latest challenge to liberty and why Piketty’s arguments against economic liberty are dangerous and wrong.

Here are some good short, very readable places to start:

Piketty Gets It Wrong by Michael D. Tanner (Cato Institute), National Review (Online), April 23, 2014.

Excerpt: “Piketty’s solutions would undoubtedly yield a more equal society, but also one that was remarkably poorer.”

Fighting Inequality: Rule of Law Vs. Legal Plunder by James A. Dorn (Cato Institute), Investor’s Business Daily, April 29, 2014.

Excerpt: “The likely result of this utopian scheme would be to drive creative people out of high-tax countries, slow economic growth, and make societies poorer in the long run.”

Will 80% Income Taxes and a New 10% Wealth Tax Fix Our Economy? by Hunter Lewis, AgainstCronyCapitalism.org, May 2, 2014.

Excerpt: “Perhaps the most astonishing claim in Piketty’s book is that government bureaucracies need to be reformed so that they can make most efficient use of all the new income and wealth taxes that are recommended. The assumption is that almost complete government control of the economy would be best, but that the machinery needs some fine tuning.”

Who Is Thomas Piketty And Why Has The Obama White House Rolled Out The Red Carpet For Him? by Hunter Lewis, AgainstCronyCapitalism.org, April 19, 2014.

Excerpt: “This is all complete nonsense. Economic growth is produced when a society saves money and invests the savings wisely. It is not quantity of investment that matters most, but quality. Government is capable neither of saving nor investing, much less investing wisely.”

The Inequality Trap Distracts from the Real Issue of Freedom by Richard Ebeling, May 5, 2014.

Excerpt: “The only important and relevant ethical and political issue in a free society should be: How has the individual earned and accumulated his material wealth? Has he done so through peaceful production and exchange or through government-assisted plunder and privilege?

“Rather than asking the source or origin of that accumulated wealth — production or plunder — the egalitarians like Thomas Piketty merely see that some have more wealth than others and condemn such an ‘unequal distribution,’ in itself.”

Thomas Piketty’s bestselling post-crisis manifesto is horrendously flawed by Allister Heath, UK Telegraph, April 29, 2014.

Excerpt: “Parts of the US intelligentsia now advocate the same ideas that are to be found on Europe’s Left-wing fringes… Envy is back, disguised as a concern about ‘inequality,’ and the bail-outs and QE were merely a convenient excuse to bash the rich. It is shocking how many intelligent people now support seizing most of the wealth created by entrepreneurs…”

Smith, Marx, and Piketty by George Reisman, Reisman’s Blog, April 21, 2014.

Excerpt: “Contrary to Mr. Piketty, the fact that the rate of return on capital is higher than the rate of economic progress does not at all imply that the fortunes of the rich will increase more rapidly than the overall size of the economic system. … Our problems today result largely from government policies that serve to hold down saving and the demand for capital goods. Among these policies are the corporate and progressive personal income taxes, the estate tax, chronic budget deficits, the social security system, and inflation of the money supply. To the extent that these policies can be reduced, the demand for and production and supply of capital goods will increase, thereby restoring economic progress, and the aggregate amount and average rate of profit will fall.”

On the Piketty Welcome Party by Bas van der Vossen, Bleeding Heart Libertarians, April 21, 2014.

Excerpt: “…inequality per se need not bother us as much as it does the Piketty-acolytes. …What matters is that living standards keep rising, and keep rising for all. That has been the crucial engine of humanity’s greatest achievements in poverty reduction, increases of life expectancy, literacy, culture high and low, and so on.”

Liberal Pundits of the World Unite Over Thomas Piketty’s New Book: Democratic pundits have enthusiastically and unconditionally embraced a book that evokes Karl Marx and talks about tweaking the Soviet experiment“ by David Harsanyi, Reason.com, April 25, 2014.

Excerpt: “…it is worth pointing out that liberal pundits and writers have enthusiastically and unconditionally embraced not only a book on economics but a hard-left manifesto. …But how does a book that evokes Karl Marx and talks about tweaking the Soviet experiment find so much love from people who consider themselves rational, evidence-driven moderates?”

Obama: Wrong About Income Inequality; The problem is joblessness, not rich people by Ronald Bailey, Reason magazine, April 2014.

Excerpt: “Are the rich getting richer? Yes. Are the poor getting poorer? No. In fact, over the past 35 years most Americans got richer. Has income inequality increased in the United States? Yes. Does it matter? …No. …if most Americans’ incomes are rising, does it matter if some are getting a larger share?”