Libertarian News

As professor Salerno notes below, he was recently interviewed on C-SPAN, fielding questions from both a neutral commentator and a dozen phone-ins.

It is arguably one of the most concise discussions on the money supply, inflation, expansion of credit, the gold standard and the Federal Reserve.

As an extra bonus, Larry Sechrest, who spoke at the latest Austrian Scholars Conference, also called in to discuss plans of denationalizing currencies.

Here is the perma link to the Adobe Flash version.

It's here at last. Yes, today is Tax Freedom Day - that wonderful point in the year when the average taxpayer has finally earned enough to cover all their taxes and at last can start earning for themselves. 

It may come as a shock that the average UK resident has spent the last 155 days working solely to support government expenditures, but that is the reality of it. More than two-fifths of an average earner's wages is taken from them in taxes. So when people joke that they spend as much time working for the taxman as they do for themselves, it is very nearly true.

Of course, it wasn't always like this. When Gordon Brown became chancellor in 1997, Tax Freedom Day was May 26 – a whole week earlier. And if you go back to 1965, Tax Freedom Day came on April 27!

Unfortunately, the true picture could be even worse than our figures suggest. Last year Tax Freedom Day actually came three days later than forecast, because the economy grew more slowly than the government expected. The signs are that 2008 could be no different. And if government borrowing is factored in, Tax Freedom Day does not come until June 14.
 
Government spending will reach £600bn in 2008. That's £10,000 for every man, woman and child in the UK  – and twice as much as when Gordon Brown became Chancellor. If he had only raised public spending in line with inflation, he could have abolished income tax, corporation tax, capital gains tax and inheritance tax by now – leaving the taxpayer some £200bn better off. Something to think about, perhaps...

Anyway, a Happy Tax Freedom Day to you all!
 

The other day I took a tour of the area where Jack the Ripper killed five women. The tour guide began by saying, “The City of London was the seat of the largest empire the world had ever seen and the richest square mile in the world. The East End was the polar opposite, with those exploited by unchecked capitalism crammed into the worst conditions imaginable.”

Say what? Unchecked capitalism to blame? There were plenty of problems with the government at that time, but why are so many quick to blame capitalism for poverty?

French President Nicolas Sarkozy is driven to “moralise capitalism.” Seems France has been at it for decades by instituting 35 hour work weeks, creating useless projects, high taxes, and building the Concorde. The result? Low GDP growth, a low GDP per capita, and unemployment at almost 8%.

In a new development, the French government is now threatening to pass legislation to curb the pay of company executives and use its EU presidency to clamp down across the EU. Business executives are paid well because of what is at stake. Companies have to compete and the companies that invest the most will get the best. Executives that fail will be fired or demoted.

If Sarkozy really wants to moralise capitalism, he should leave it be. 
 

This is unashamedly another plug for Junk Medicine: Doctors, Lies and the Addiction Bureaucracy by iconoclastic doc Theodore Dalrymple, which I first reviewed back in January, and which our medi-blogger Dr Fred Hanson mentioned in his piece a few days ago.

Almost everything you know about heroin addiction is wrong, Dalrymple says. Heroin is not highly addictive; withdrawal from it is not medically serious; addicts do not become criminals to feed their habit; addicts do not need any medical assistance to stop taking heroin; and heroin addiction is more about mentality than biology. It's great stuff. And we've got it on special offer, well below the sticker price, for Adam Smith blog readers. You save nearly £4 off the bookshop price if you buy it from our online bookstore.

New green, clean low-carbon transportation between China and Hong. Sadly it is a 300-metre long zip line and illegal.

Here is my interview on the gold standard on C-Span.

Would those campaigning against vaccines please ask themselves, quite seriously, whether they would really like to return to this world?

As so often happens, the best retorts occur to you after the retortee is no longer listening.

My word, this is a turn up for the books! Variations in exchange rates affect trade deficits. Have to rewrite all the textbooks.

An extremely harsh measure but who knows, it might actually work.

Business advice to those running Yahoo. Similarly harsh but again, it might work.

In the debate upon MPs pay there seems to be one politician at least who "gets it".

And finally, a quixotic quest concerning male secondary sexual characteristics.

Angela Phillips is concerned about the possibility that the cap on universtiy fees might be raised. 

Should our world-class universities be allowed to operate like football clubs and raise entry fees in order to pay the higher wages it takes to attract the Beckhams of the academic establishment?

I for one would welcome an influx of monosyllabic academics who were actually good at what they do, yes, and if raising tuition fees is the only way to achieve it then I'm all for that plan. A little more seriously:

Are we really ready to contemplate the possibility that education is not about social justice and that we should save the best minds in the world to educate a bunch of bankers and lawyers? Because that what we are talking about if we allow a market to develop in higher education.

No, education isn't about social justice: it might be a means of achieving some but that's a by product. The aim of education is, as the very word itself implies, to educate people, no, not just for the economic value of their subsequent output, but in the sense of aiding in the development of the full and rounded personality. The liberation of the whole human being if you wish. However, before I get accused of being a little too New Age in my outlook, this doesn't mean that fees should not be uncapped.

The people who benefit from the higher education system are those who go through it: not just in the higher rewards that some of them get in the jobs market, but in that greater appreciation of life which a rounded education will aid. Just as it should be the polluter who pays, so should it be those who benefit who pay. In this case the soon-to-be graduates should pay for the costs of the system which provides then with the benefits that graduation will bring.

The only alternative is that higher education be paid for from the tax system - and it's very difficult to see a moral argument that those who do not benefit from having graduated should have to pay the costs of the system which benefits those who do.

Free the fees and not just allow but encourage a market to develop in higher education. As I've said before, there are things which are simply to important for them to be excluded from the market.

There are a lot of smug faces in Frankfurt right now. Shortly after the Euro was launched, it pitched into the sand, down to US$0.90, and some economists thought it was on the way out. But political economists knew that too much political capital had been invested in the Euro for the EU to let it fail. And, indeed, now it seems to be riding high.

A lot of that is of course because the dollar is languishing due the effects of terrorism, wars, China and the inevitable hangover that follows a credit-led boom. The pound too, if less so. The Euro has become the currency of choice for all those who are nervous about leaving their money in America. And while America and Britain's prospects look grim, the European economies in general seem to be doing OK.

Europe and the Euro may be on the up, but the fundamental problems of the Euro remain. A single currency, along with a single exchange rate, can never be right for all the peoples of Europe all the time. Inflation in Ireland is now 5%, well outside the European Central Bank's 2% target, and inflation in Spain is not far behind. Meanwhile, these economies are not doing well. They got a huge boost from low Euro interest rates during the early years of this decade, and how they too are suffering a hangover. Property prices in Dublin are off by 20% and more, unemployment is creeping back, and people are talking again of stagflation.

The strong Euro does Ireland, in particular, no favours. Its main customers are the UK and America after all, with whom it has strong cultural, linguistic and ethnic ties. A lot of people presume that Ireland's boom was due to its membership of the EU, of EU subsidies and cheap credit thanks to Euro membership. In fact, Ireland's real growth was pushed off by an enlightened tax policy that drew business to Ireland, and certainly, access to the wider European market and some infrastructure grants certainly helped, as did changing social patterns and the participation of more women in the workforce. But that real boom was compounded by an inflationary boom that was down to Euro membership. In the long term, the Irish would have been better without it. And that hasn't changed.
 

A YouGov poll taken out between 27 and 29 May shows that Labour and Gordon Brown’s popularity has hit a record low since polling began. The Conservatives are ahead on 47 points, Labour on 23 points, with the Liberal Democrats on 18 points.

The poll showed that people regard David Cameron to be a better candidate for prime minister than Mr Brown and that the Conservatives would be better at running the economy than Labour. Crucially the poll shows that 72 per cent of those surveyed felt that the tax burden was too much.

Gordon Brown should take these results as a sharp slap from the electorate. A warning that if he does not cut taxes he will not only be defeated in 2010, but utterly trounced. His MPs know this. According to the Independent, a group of MPs (including five former ministers) have told him that he needs to cut taxes. As Sally Keeble, Labour MP for Northampton North, remarks: "The tax system provides the most powerful means of convincing this new electorate we're on their side."

However, even if Gordon Brown wanted to move to the right, he is being pulled in the opposite direction by the unions. The Labour Party is £24 million in debt. They have five weeks to find almost £7.5m or be declared bankrupt. A number of unions have promised to bail them out if their policies take a turn to the left.

It’s a catch 22 for Brown. Turn right and go bust, turn left and fail.

Rare offerings by Garet Garrett, Raymond de Roover, Jerry Kirkpatrick, and Wilhelm Roepke (one with an intro by Hayek!), all in free literature.

Yes, more on that sea temperature drop in the 1940s. Turns out it was just a data collection error and yes, that news is now spreading. But the much more important question is, what other errors are there in the temperature records? More here again.

On slightly different matters environmental: yes, the profit motive is a very powerful incentive for people to reduce resource consumption, even WalMart.

And Oxford Colleges, those forcing houses for the intellectually gifted, seem to have problems with environmental matters.

Who can take seriously a political journalist who knows nothing of (or at least ignores) public choice economics?

Of course, not all economics is quite so important. The professor who worked out the economics of scrabble, for example, was consistently beaten at the game by his wife, who cared nothing for such abstractions.

The perils of blogging....sometimes the message escapes.

And finally, well, and finally really.

In this lost essay Louis Spadaro, the economist writes that "If the part played by profits in the economy is found to be misrepresented for purposes of analytical tidiness, the need for correction is all the more urgent in an age of increasing recourse to government action. Inasmuch as realism in our economics points to the same need, it would be unwise to cling to any theory -- no matter what its other attributes -- which sacrifices this need for reasons of arbitrary neatness; more, it would be scientifically indefensible."FULL ARTICLE

Michelle Malkin, nå har du drete deg ut.

Every year it seems that sending your kid to college is going to take one more sack full of hundreds than last year. One of the biggest reasons for this, ironically, is student aid. When government gives students more money for college, it lets schools inflate prices. But it's not primarily students or their parents who are paying the difference. Rather, it's taxpayers who have to hand over the bag.

• "Every University a Junkie," by Neal McCluskey
• "Making College More Expensive: The Unintended Consequences of Federal Tuition Aid," by Gary Wolfram

The "Climate Security Act", sponsored by Joe Lieberman (I-CT) and John Warner (R-VA) will be debated by the Senate next week. The bill would establish a cap-and-trade system for greenhouse gases from the manufacturing, transportation and electric power sectors. Cato scholar Patrick J. Michaels says of the bill, "It's going to cost trillions and do nothing measurable about climate change in the foreseeable future."

• Full statement on Warner-Lieberman from Patrick J. Michaels
• "Carbon Copies," by Patrick J. Michaels
• "Combating Global Warming," by Ian W.H. Parry and William A. Pizer

De fleste forbinder grådighet med noe negativt, men innen for fredelige rammer, dvs. i en fri markedsøkonomi, har grådighet en utjevnende effekt i samfunnet! Nå ser ikke jeg på utjevning som noe poeng i seg selv, men det er mange som gjør det. Derfor er det interessant å se at kapitalismen på sikt skaper større grad av utjevning enn sosialismen.

Dette er ikke særlig intuitivt for de fleste. Derfor skal jeg forklare mekanismen som ligger til grunn for dette. Grådighet i et fritt marked betyr at kapitalister søker seg inn i marked med størst profittmargin, og de søker seg ut av markeder med lav profittmargin.

Men hva skjer når kapital strømmer inn i et marked? Jo, det bygges flere maskiner og fabrikker, flere butikker, ansettes flere mennesker innenfor dette markedet. Dette har flere effekter: lønnsnivået drives oppover samtidig som kapitalistene forsøker å underby hverandre med lavere priser. Resultatet er to ting: varen blir billigere og profittmarginen synker.

Nøyaktig det motsatte skjer i et marked med lave profittmarginer. De som har lavest marginer gir opp eller går konkurs og forsvinner ut av markedet. Dermed blir det færre aktører igjen i markedet og disse kan nå sette opp prisen og ta seg bedre betalt. Resultatet er at varen blir dyrere og profittmarginen øker.

Over tid vil det altså bli en utjevning i profittmarginen mellom forskjellige markeder. Det vil være en sterk tendens til at profittmarginen er noenlunde like stor i alle markeder, noe som også viser seg å være tilfelle i praksis.

Til å begynne med var kapital noe kun de aller rikeste hadde, og da var profitten forholdsvis stor. Men i dag har alle kapital, også arbeidere. Dermed spares det mer kapital. Investeringene fører til at lønningene presses oppover og profittmarginene nedover. Med andre ord, i dag er det blitt langt mer lønnsomt å arbeide sammenlignet med for 200 år siden. For 200 år siden var det flust med arbeidskraft, men veldig lite kapital. I dag er det flust med kapital, men mangel på arbeidskraft.

Jo mer kapital det blir i verden, jo større blir altså utjevningen mellom kapitalister og arbeidere. Under kapitalismen fungerer altså grådighet som en mekanisme for å redusere forskjeller mellom kapitalister og lønnsmottakere, og mellom rike og fattige.

A recent Brookings Institution study suggests that cities should build more transit lines and promote more compact development to reduce their carbon footprints. However, Cato scholar Randal O'Toole argues that these recommendations are not supported by the data. O'Toole notes, "Actual numbers reveal that most transit systems produce more greenhouse gas emissions per passenger mile than the average automobile, and nearly all produce more than a hybrid such as the Toyota Prius. ...Encouraging people to drive smaller cars will do more to reduce carbon footprints at a lower cost than building new transit lines."

• Full statement on the Brookings report from Randal O'Toole
• "Does Rail Transit Save Energy or Reduce Greenhouse Gas Emissions?," by Randal O'Toole
• "Roadmap to Gridlock: The Failure of Long-Range Metropolitan Transportation Planning," by Randal O'Toole

I've updated my advice here.