Fortitudine Vincimus

Jerry Seinfeld's New Super Bowl Ad

2012-02-01T12:58:00.001-08:00

A&G - President Misuses the Term "Safety Net"

2012-02-01T12:37:00.001-08:00

A&G - The Next Facebook?

2012-02-01T12:30:00.001-08:00

Hilarious Bit on Recycling Absurdities

2012-01-31T09:30:00.000-08:00

Thomas Sowell on Visions of the Anointed

2012-01-30T12:46:00.000-08:00

Education: More Spending Is Not the Answer

2012-01-29T09:30:00.000-08:00

Armstrong and Getty: What Is a Fair Tax Rate for the Wealthy?

2012-01-28T09:30:00.000-08:00

CATO Institute Responds to the State of the Union

2012-01-27T12:39:00.000-08:00

ReasonTV: 3 Reasons Not to Worry About SuperPACs

2012-01-27T09:30:00.000-08:00

What is Human Dignity?

2012-01-26T13:04:00.000-08:00

Many statists argue that they want government action to preserve human dignity. But human dignity is allowing independence of the individual. It is allowing the individual to live a life that they define with a minimum of government intervention. What statists propose does not respect human dignity, it looks down on it.

The Wealthy Aren't Paying Their Fair Share...Oh, Wait

2012-01-26T08:26:00.000-08:00

Teachers Unions Fight Progress, Not Surprisingly

2012-01-25T12:56:00.001-08:00

Annie Leonard's Answer to Gov't Waste: Waste it Differently

2012-01-24T09:30:00.000-08:00

Formerly Socialist Estonia: Better At Freedom Than the US Now?

2012-01-21T09:30:00.000-08:00

Will the Supreme Court End Rent Control? Cross Your Fingers!

2012-01-20T09:30:00.000-08:00

I Need To Raise My Debt Limit

2012-01-19T09:30:00.000-08:00

I laugh to keep from crying.

Man Tortured, Murdered by Police, No Criminal Charges

2012-01-18T09:30:00.000-08:00

This man was tortured and murdered by police while in jail and 2 1/2 years later no officer has been charged and the department has been cleared of wrongdoing so there will be no criminal charges. Outrageous!

Photo shows pepper-sprayed prisoner: MyFoxTAMPABAY.com

The Truth About Rich vs. Poor

2012-01-17T09:30:00.000-08:00

Veronique de Rugy recently wrote an article highlighting the problem with the Occupy argument that the wealthiest 1% are getting richer at the expense of the 99% of the rest of us. The problem with that argument is that the 1% is a group that is constantly in flux. It's not the same people year to year and decade to decade. I recently listened to an interview with Niall Ferguson, a history professor at Harvard, in which he said that he was much more concerned about income mobility that income inequality. As long as society allows for people to make advances through hard work and perseverence, income inequality is just a temporary and meaningless measure. Here are a couple of the highlights from the article.

But even if the top 1 percent were still pulling down one-fifthof national income, this doesn’t mean that the remaining 99 percentare worse off, contrary to popular belief. Rather, as Kaplancorrectly observed, “Income is not a zero-sum game. Somebody else’sincome does not come at your expense. It could…but in general thesenumbers don’t have automatic implications for the 99 percent.”These kinds of comparisons don’t tell us anything about theabsolute conditions of lower income earners.
For instance, even though the lower earners have a smaller shareof income today than they did in 1990, their absolute income ishigher. A smaller share of a larger national pie can still meanmore income than the bigger slice of a smaller pie. This is trueeven after you consider growth in population. According toIRS statistics, in 1990, the bottom 50 percent of incomeearners reported 15 percent of real adjusted gross income,some $517 billion in pre-tax income. In 2007, they reported only 12percent of AGI, but this percentage amounted to more absolutedollars—some $1.1 trillion in pre-tax income.

But even these figures miss a more fundamental point. The top 1percent in 1990 are not necessarily the same people as thetop 1 percent in 2012. Data describing comparative incomeperformance generally do not take into account the movement ofindividual households through time. There is no accurate assessmentof the income gap without accounting for income mobility. The morethe mobility, the less the significance of widening incomedisparities.

So what does that mobility look like? Take the top earners inAmerica. Using IRS data, the Tax Foundation has shown that ofthe 675,000 taxpayers who reported $1 million in pre-taxincome at some point between 1999 and 2007, only about halfremained millionaires just one year later (see figure). A tiny6 percent, or 38,000 people, retained their millionaire status forall nine years. In other words, most top earners are likely to losetheir membership in the millionaires club.

And things look rosier at the bottom of income distribution,too. The same Tax Foundation analysis showed that about 60 percentof households that were in the lowest income quintile in 1999 hadmoved to a higher quintile by 2007. And about one-third ofthose in the lowest quintile moved to the middle quintile orhigher. While it may be difficult to rise literally from rags toriches, there is still plenty of opportunity for Americans to climbup the income ladder.

I Love Margaret Thatcher!

2012-01-16T09:30:00.000-08:00

What If...

2012-01-15T09:30:00.000-08:00

Andrew Napolitano went off about the lack of difference between the two political parties and the media snubbing of Ron Paul.

Court Rebukes Police Tactics

2012-01-14T09:30:00.001-08:00

Tim Lynch at the Cato Institute posted this story a little while back.

It does not happen in the suburbs, but in the city, the police will sometimes just pounce on people who are not doing anything wrong and if you complain or ‘mouth off,’ things can get much worse. Here is an excerpt from a ruling handed down today in DC.
What is most disturbing about this case is the result: a young man in the community . . . who was engaged in peaceful activities (mowing the lawn, smoking a cigarette) and who the police knew at the time they stopped him was not doing anything unlawful, is approached by aggressive officers engaged in aggressive unconstitutional patrols, and this young man ends up being punched in the face with such force that he receives a black eye, kicked numerous times in the back, thrown on the ground, sprayed in the eyes with pepper spray, and finally, he receives two convictions on his record for assault on a police officer. . . . But for this unconstitutional police policy, appellant Crossland would not have suffered a physical attack on his person and would not have had these convictions on his record. Instead, he would have had a rather ordinary day in his community mowing the lawn and smoking a cigarette, a day he probably wouldn’t even have cause to remember, and it is very disturbing that the police in this case are essentially being rewarded for their unconstitutional behavior and aggressive unconstitutional police policy which was the direct cause of a highly volatile situation which led to this young man’s eventual convictions for assaulting them.
The full opinion can be found here [pdf]. One judge says he hopes the police will be admonished for violating the rights of individuals–aggressively confronting people who are not doing anything wrong–and wonders whether he is being naive and unrealistic. Sorry to say that he is being naive and that’s part of the problem. If the young man had gone along with the illegal stop and frisk and the officer left the scene after ten minutes, there would have been no real legal remedy available and that’s why these tactics are used over and over again.

A Couple of Quotes About Debt

2012-01-14T09:30:00.000-08:00

I heard both of these quotes recently and liked them.

Debt signifies that tomorrow's spending was done yesterday, and we must spend less sometime in the future. - Arnab Chakrabarti, Barron's, Jan 2, 2012

If you live above your means today, at some point you'll have to live under them. - Tom McClintock, US Congressman

Outrageous Abuse of Government

2012-01-13T15:24:00.000-08:00

Tim Sandefur of the Pacific Legal Foundation is one of my favorite legal-meisters. He did an interview with Armstrong and Getty about the case at the Supreme Court right now about a couple who has been so blatantly abused by the EPA that the justices have made disparaging comments about it during the questioning. This is a VERY interesting interview. Take your blood pressure medication before you listen.

David Deming: Why I Deny Global Warming

2012-01-13T09:30:00.000-08:00

Lew Rockwell recently posted this article by David Deming regarding the anti-scientific, faith-based behavior of global warming advocates. I thought it was a great article and so I'm reprinting it here.

Why I Deny Global Warming

by David Deming

Recently by David Deming: Doubting Darwin

I'm a denier for several reasons. There is no substantive evidence that the planet has warmed significantly or that any significant warming will occur in the future. If any warming does occur, it likely will be concentrated at higher latitudes and therefore be beneficial. Climate research has largely degenerated into pathological science, and the coverage of global warming in the media is tendentious to the point of being fraudulent. Anyone who is an honest and competent scientist must be a denier.
Have you ever considered how difficult it is to take the temperature of the planet Earth? What temperature will you measure? The air? The surface of the Earth absorbs more than twice as much incident heat from the Sun than the air. But if you measure the temperature of the surface, what surface are you going to measure? The solid Earth or the oceans? There is twice as much water as land on Earth. If you decide to measure water temperature, at what depth will you take the measurements? How will the time scale on which the deep ocean mixes with the shallow affect your measurements? And how, pray tell, will you determine what the average water temperature was for the South Pacific Ocean a hundred years ago? How will you combine air, land, and sea temperature measurements? Even if you use only meteorological measurements of air temperature, how will you compensate for changes in latitude, elevation, and land use?
Determining a mean planetary temperature is not straightforward, but an extremely complicated problem. Even the best data are suspect. Anthony Watts and his colleagues have surveyed 82.5 percent of stations in the U.S. Historical Climatology Network. They have found – shockingly – that over 70 percent of these stations are likely to be contaminated by errors greater than 2 deg C [3.6 deg F]. Of the remaining stations, 21.5 percent have inherent errors greater than 1 deg C. The alleged degree of global warming over the past 150 years is less than 1 deg C. Yet even in a technologically advanced country like the US, the inherent error in over 90 percent of the surveyed meteorological stations is greater than the putative signal. And these errors are not random, but systematically reflect a warming bias related to urbanization. Watts has documented countless instances of air temperature sensors located next to air conditioning vents or in the middle of asphalt parking lots. A typical scenario is that a temperature sensor that was in the middle of a pasture a hundred years ago is now surrounded by a concrete jungle. Urbanization has been a unidirectional process. It is entirely plausible – even likely – that all of the temperature rise that has been inferred from the data is an artifact that reflects the growth of urban heat islands.
The "denier" is portrayed as a person who refuses to accept the plain evidence of his senses. But in fact it is the alarmist who doesn't know what they are talking about. The temperature of the Earth and how it has varied over the past 150 years is poorly constrained. The person who thinks otherwise does so largely because they have no comprehension of the science. Most of these people have never done science or thought about the inherent difficulties and uncertainties involved.
And what is "global warming" anyway? As long ago as the fifth century BC, Socrates pointed out that intelligible definitions are a necessary precursor to meaningful discussions. The definition of the term "global warming" shifts with the context of the discussion. If you deny global warming, then you have denied the existence of the greenhouse effect, a reproducible phenomenon that can be studied analytically in the laboratory. But if you oppose political action, then global warming metamorphoses into a nightmarish and speculative planetary catastrophe. Coastal cities sink beneath a rising sea, species suffer from wholesale extinctions, and green pastures are turned into deserts of choking hot sand.
In fact, so-called "deniers" are not "deniers" but skeptics. Skeptics do not deny the existence of the greenhouse effect. Holding all other factors constant, the mean planetary air temperature ought to rise as the atmosphere accumulates more anthropogenic CO2. Christopher Monckton recently reviewed the pertinent science and concluded that a doubling of CO2 should result in a temperature increase of about 1 deg C. If this temperature increase mirrors those in the geologic past, most of it will occur at high latitudes. These areas will become more habitable for man, plants, and other animals. Biodiversity will increase. Growing seasons will lengthen. Why is this a bad thing?
Any temperature increase over 1 deg C for a doubling of CO2 must come from a positive feedback from water vapor. Water vapor is the dominant greenhouse gas in Earth's atmosphere, and warm air holds more water than cold air. The theory is that an increased concentration of water vapor in the atmosphere will lead to a positive feedback that amplifies the warming from CO2 by as much as a factor of three to five. But this is nothing more that speculation. Water vapor also leads to cloud formation. Clouds have a cooling effect. At the current time, no one knows if the feedback from water vapor will be positive or negative.
Global warming predictions cannot be tested with mathematical models. It is impossible to validate computer models of complex natural systems. The only way to corroborate such models is to compare model predictions with what will happen in a hundred years. And one such result by itself won't be significant because of the possible compounding effects of other variables in the climate system. The experiment will have to repeated over several one-hundred year cycles. In other words, the theory of catastrophic global warming cannot be tested or empirically corroborated in a human time frame.
It is hardly conclusive to argue that models are correct because they have reproduced past temperatures. I'm sure they have. General circulation models have so many degrees of freedom that it is possible to endlessly tweak them until the desired result is obtained. Hindsight is always 20-20. This tells us exactly nothing about a model's ability to accurately predict what will happen in the future.
The entire field of climate science and its coverage in the media is tendentious to the point of being outright fraudulent. Why is it that every media report on CO2 – an invisible gas – is invariably accompanied by a photograph of a smokestack emitting particulate matter? Even the cover of Al Gore's movie, An Inconvenient Truth, shows a smokestack. Could it be that its difficult to get people worked up about an invisible, odorless gas that is an integral component of the photosynthetic cycle? A gas that is essential to most animal and plant life on Earth? A gas that is emitted by their own bodies through respiration? So you have to deliberately mislead people by showing pictures of smoke to them. Showing one thing when you're talking about another is fraud. If the case for global warming alarmism is so settled, so conclusive, so irrefutable...why is it necessary to repeatedly resort to fraud?
A few years ago it was widely reported that the increased concentration of carbon dioxide in the atmosphere would cause poison ivy to grow faster. But of course carbon dioxide causes almost all plants to grow faster. And nearly all of these plants have beneficial human uses. Carbon dioxide fertilizes hundreds or thousands of human food sources. More CO2 means trees grow faster. So carbon dioxide promotes reforestation and biodiversity. Its good for the environment. But none of this was reported. Instead, the media only reported that global warming makes poison ivy grow faster. And this is but one example of hundreds or thousands of such misleading reports. If sea ice in the Arctic diminishes, it is cited as irrefutable proof of global warming. But if sea ice in the Antarctic increases, it is ignored. Even cold weather events are commonly invoked as evidence for global warming. People living in the future will look back and wonder how we could have been so delusional.

For the past few years I have remained silent concerning the Climategate emails. But what they revealed is what many of us already knew was going on: global warming research has largely degenerated into what is known as pathological science, a "process of wishful data interpretation." When I testified before the US Senate in 2006, I stated that a major climate researcher told me in 1995 that "we have to get rid of the Medieval Warm Period." The existence and global nature of the Medieval Warm Period had been substantiated by literally hundreds of research articles published over decades. But it had to be erased from history for ideological reasons. A few years later the infamous "hockey stick" appeared. The "hockey stick" was a revisionist attempt to rewrite the temperature history of the last thousand years. It has been discredited as being deeply flawed.
In one Climategate email, a supposed climate scientist admitted to "hiding the decline." In other words, hiding data that tended to disprove his ideological agenda. Another email described how alarmists would try to keep critical manuscripts from being published in the peer-reviewed scientific literature. One of them wrote, we'll "keep them out somehow – even if we have to redefine what the peer-review literature is!" Gee. If the climate science that validates global warming is so unequivocal, why is it necessary to work behind the scenes to suppress dissent? You "doth protest too much."
As described in my book, Science and Technology in World History: The Ancient World and Classical Civilization, systematic science began with the invocation of naturalism by Greek philosophers and Hippocratic physicians c. 600-400 BC. But the critical attitude adopted by the Greeks was as important as naturalism. Students were not only allowed to criticize their teachers, but were encouraged to do so. From its beginnings in Greek natural philosophy, science has been an idealistic and dispassionate search for truth. As Plato explained, anyone who could point out a mistake "shall carry off the palm, not as an enemy, but as a friend." This is one reason that scientists enjoy so much respect. The public assumes that a scientist's pursuit of truth is unencumbered by political agendas.

But science does not come easy to men. "Science," George Sarton reminded us, "is a joykiller." The proper conduct of science requires a high degree of intellectual discipline and rigor. Scientists are supposed to use multiple working hypotheses and sort through these by the processes of corroboration and falsification. The most valuable evidence is that which tends to falsify or disprove a theory. A scientist, by the very definition of his activity, must be skeptical. A scientist engaged in a dispassionate search for truth elevates the critical – he does not suppress it. Knowledge begins with skepticism and ends with conceit.
Finally, I'm happy to be known as a "denier" because the label of "denier" says nothing about me, but everything about the person making the charge. Scientific theories are never denied or believed, they are only corroborated or falsified. Scientific knowledge, by its very nature, is provisional and subject to revision. The provisional nature of scientific knowledge is a necessary consequence of the epistemological basis of science. Science is based on observation. We never have all the data. As our body of data grows, our theories and ideas must necessarily evolve. Anyone who thinks scientific knowledge is final and complete must necessarily endorse as a corollary the absurd proposition that the process of history has stopped.
A scientific theory cannot be "denied." Only a belief can be denied. The person who uses the word "denier" thus reveals that they hold global warming as a belief, not a scientific theory. Beliefs are the basis of revealed religion. Revelations cannot be corroborated or studied in the laboratory, so religions are based on dogmatic beliefs conservatively held. Religions tend to be closed systems of belief that reject criticism. But the sciences are open systems of knowledge that welcome criticism. I'm a scientist, and therefore I must happily confess to being a denier.

October 19, 2011

David Deming [send him mail] is a geophysicist, associate professor of arts and sciences at the University of Oklahoma, and author of the books Science and Technology in World History, Vols. 1 & 2.

The Welfare States Creates Hoarders

2012-01-12T09:30:00.000-08:00

Jack is absolutely right in this clip. This kind of thing simply couldn't happen outside of a welfare state.

Squatters Have Been Stealing Homes in Texas

2012-01-11T09:30:00.000-08:00

How mad would this make you?!

A&G Interview Niall Ferguson

2012-01-10T09:30:00.000-08:00

This was a really interesting interview with Niall Ferguson about his book on civilization. I found it fascinating that he said he is much more interested in social mobility than in income inequality. If your society allows people who work hard to get ahead then income inequality doesn't really matter.

A&G Interview Chris Reed on California High Speed Rail

2012-01-09T19:31:00.001-08:00

This is a great interview on the California high speed rail debacle.

Corporations Don't Pay Taxes: Round 2

2012-01-08T09:30:00.000-08:00

One of my first posts on this blog 4 years ago was about the fact that corporations don't pay any taxes. Only people pay taxes. One of my favorite economists, Walter Williams, backs me up on this.

Walter Williams at Hillsdale College

2012-01-07T09:30:00.000-08:00

Ideas Matter had this on their website. The whole thing is really good, but I particularly enjoyed the first 4 minutes or so when he explained money as "certificates of performance." Great explanation and it highlights the immorality of government income redistribution.

The Truth About Monopolies

2012-01-06T09:30:00.000-08:00

Ben Powell Explains the Boom and Bust of Housing

2012-01-05T09:30:00.000-08:00

Millionaires Willing to Make Other Millionaires Pay Higher Taxes

2012-01-04T09:30:00.000-08:00

I thought this was a clever bit of ambush journalism. They went around and spoke to some of the millionaires who say that their taxes should be raised and asked them if they would make a donation to the US Treasury (which you can do right on the Treasury website). I'll let you imagine their ~~hypocrisy~~ answer.

Washington D.C. Is More Important Than Your Customer

2012-01-03T09:30:00.000-08:00

Professor Regains His Right to Free Speech: Long Live Malcom Reynolds!

2012-01-01T09:30:00.000-08:00

As a huge fan of Firefly (my fandom is huge, I'm not huge) this story warmed my shriveled heart.

Chinese Revolt in Wukan Village

2011-12-31T12:40:00.000-08:00

Milton Friedman on "Unfair Competition"

2011-12-28T09:30:00.000-08:00

Short Film: Seconds

2011-12-27T09:30:00.000-08:00

This was a great little film about the choices and intersections on which our lives pivot.

2011-12-23T09:30:00.000-08:00

Walter Williams recently wrote an article on the poverty of persuasive evidence on the part of the overpopulation scare-mongers. I enjoyed the article and thought you might too.

Population Control Nonsense

by Walter E. Williams • December 2011 • Vol. 61/Issue 10

According to an American Dream article ^[1], “Al Gore, Agenda 21 and Population Control,” there are too many of us and it has a negative impact on the earth. Here’s what the United Nations Population Fund said in its annual State of the World Population Report for 2009, “Facing a Changing World: Women, Population and Climate”: “Each birth results not only in the emissions attributable to that person in his or her lifetime, but also the emissions of all his or her descendants. Hence, the emissions savings from intended or planned births multiply with time. . . . No human is genuinely ‘carbon neutral,’ especially when all greenhouse gases are figured into the equation. Therefore, everyone is part of the problem, so everyone must be part of the solution in some way. . . . Strong family planning programmes are in the interests of all countries for greenhouse-gas concerns as well as for broader welfare concerns.”

Thomas Friedman agrees in his New York Times column “The Earth is Full” (June 8, 2008), in which he says, “[P]opulation growth and global warming push up food prices, which leads to political instability, which leads to higher oil prices, which leads to higher food prices, and so on in a vicious circle.”

In his article “What Nobody Wants to Hear, But Everyone Needs to Know ^[2],” University of Texas at Austin biology professor Eric R. Pianka wrote, “I do not bear any ill will toward people. However, I am convinced that the world, including all humanity, WOULD clearly be much better off without so many of us.”

However, there is absolutely no relationship between high populations, disaster, and poverty. Population-control advocates might consider the Democratic Republic of Congo’s meager 75 people per square mile to be ideal while Hong Kong’s 6,500 people per square mile is problematic. Yet Hong Kong’s citizens enjoy a per capita income of $43,000 while the Democratic Republic of Congo, one of the world’s poorest countries, has a per capita income of $300. It’s no anomaly. Some of the world’s poorest countries have the lowest population densities.

Planet earth is loaded with room. We could put the world’s entire population into the United States, yielding a density of 1,713 people per square mile. That’s far lower than what now exists in all major U.S. cities. The entire U.S. population could move to Texas, and each family of four would enjoy more than 2.1 acres of land. Likewise, if the entire world’s population moved to Texas, California, Colorado, and Pennsylvania, each family of four would enjoy a bit over two acres. Nobody’s suggesting that the entire earth’s population be put in the United States or that the entire U.S. population move to Texas. I cite these figures to help put the matter into perspective.

Let’s look at some other population density evidence. Before the collapse of the Soviet Union, West Germany had a higher population density than East Germany. The same is true of South Korea versus North Korea; Taiwan, Hong Kong, and Singapore versus China; the United States versus the Soviet Union; and Japan versus India. Despite more crowding, West Germany, South Korea, Taiwan, Hong Kong, Singapore, the United States, and Japan experienced far greater economic growth, higher standards of living, and greater access to resources than their counterparts with lower population densities. By the way, Hong Kong has virtually no agriculture sector, but its citizens eat well.

One wonders why anyone listens to doomsayers who have been consistently wrong in their predictions—not a little off, but way off. Professor Paul Ehrlich, author of the 1968 bestseller The Population Bomb, predicted major food shortages in the United States and that by “the 1970s . . . hundreds of millions of people are going to starve to death.” Ehrlich forecasted the starvation of 65 million Americans between 1980 and 1989 and a decline in U.S. population to 22.6 million by 1999. He saw England in more desperate straits: “If I were a gambler, I would take even money that England will not exist in the year 2000.”

Expert Poverty

By a considerable measure, poverty in underdeveloped nations is directly attributable to their leaders heeding the advice of western “experts.” Nobel laureate and Swedish economist Gunnar Myrdal said (1956), “The special advisors to underdeveloped countries who have taken the time and trouble to acquaint themselves with the problem . . . all recommend central planning as the first condition of progress.” In 1957 Stanford University economist Paul A. Baran advised, “The establishment of a socialist planned economy is an essential, indeed indispensable, condition for the attainment of economic and social progress in underdeveloped countries.”

Topping off this bad advice, underdeveloped countries sent their brightest to the London School of Economics, Berkeley, Harvard, and Yale to be taught socialist nonsense about economic growth. Nobel laureate economist Paul Samuelson taught them that underdeveloped countries “cannot get their heads above water because their production is so low that they can spare nothing for capital formation by which the standard of living could be raised.” Economist Ranger Nurkse describes the “vicious circle of poverty” as the basic cause of the underdevelopment of poor countries. According to him, a country is poor because it is poor. On its face this theory is ludicrous. If it had validity, all mankind would still be cave dwellers because we all were poor at one time and poverty is inescapable.

Population controllers have a Malthusian vision of the world that sees population growth outpacing the means for people to care for themselves. Mankind’s ingenuity has proven the Malthusians dead wrong. As a result we can grow increasingly larger quantities of food on less and less land. The energy used to produce food, per dollar of GDP, has been in steep decline. We’re getting more with less, and that applies to most other inputs we use for goods and services.
Ponder the following question: Why is it that mankind today enjoys cell phones, computers, and airplanes but did not when King Louis XIV was alive? After all, the necessary physical resources to make cell phones, computers, and airplanes have always been around, even when cavemen walked the earth. There is only one reason we enjoy these goodies today but did not in past eras. It’s the growth in human knowledge, ingenuity, and specialization and trade—coupled with personal liberty and private property rights—that led to industrialization and betterment. In other words human beings are immensely valuable resources.

What are called overpopulation problems result from socialistic government practices that reduce the capacity of people to educate, clothe, house, and feed themselves. Underdeveloped nations are rife with farm controls, export and import restrictions, restrictive licensing, price controls, plus gross human rights violations that encourage their most productive people to emigrate and stifle the productivity of those who remain. The true antipoverty lesson for poor nations is that the most promising route out of poverty to greater wealth is personal liberty and its main ingredient, limited government.

Article printed from The Freeman | Ideas On Liberty: http://www.thefreemanonline.org
URL to article: http://www.thefreemanonline.org/columns/pursuit-of-happiness/population-control-nonsense/
URLs in this post:

[1] an American Dream article: http://tinyurl.com/63em794

[2] What Nobody Wants to Hear, But Everyone Needs to Know: http://tinyurl.com/6jlzysu

Memo to Harry Reid: Government Doesn't Create Jobs

2011-12-22T09:30:00.001-08:00

John Stossel recently wrote an article about politicians claiming that their job is to create jobs. Several CEOs are tired of that lie and have decided that they're going to start speaking out about the fact that government has no money of its own to create jobs with. They only have what they take from others first. If politicians would have the humility to recognize that one simple fact we would have a much better society.

Here is the article in full:

Job Creators Fight Back

Tired of being pushed around, a group of CEOs are speaking out.

John Stossel | December 15, 2011

Some politicians claim that politicians create jobs.

Senate Majority Leader Harry Reid says, “My job is to createjobs.”

What hubris! Government has no money of its own. All it does istake from some people and give to others. That may create somejobs, but only by leaving less money in the private sector for jobcreation.

Actually, it’s worse than that. Since government commandeersscarce resources by force and doesn’t have to peddle its so-calledservices on the market to consenting buyers, there’s no feedbackmechanism to indicate if those services are worth more to peoplethan what they were forced to go without.

The only people who create real, sustainable jobs are in privatebusinesses—if they’re unsubsidized.
Some CEOs are upset that people don’t appreciate what they do.So they formed a group called the Job Creators Alliance.

Brad Anderson, former CEO of Best Buy, joined because he wantsto counter the image of businesspeople as evil. When he was young,Anderson himself thought they were evil. But then he “stumbled intoa business career” by going to work in a stereo store.

“I watched what happens in building a business. (My store,) TheSound of Music, which became Best Buy, was 11 years (old) before Imade a dollar of profit.”

In 36 years, he turned that store into a $50 billioncompany.

Tom Stemberg, founder of Staples, got involved with the JobCreators Alliance because he’s annoyed that the government makes atough job much tougher.

He complains that government mostly creates jobs—that killjobs.

“They’re creating $300 million worth of jobs in the new consumerfinancial protection bureau,” Stemberg said, “which I don’t thinkis going to do much for productivity in America. We’re creating allkinds of jobs trying to live up to Dodd-Frank...and those jobsdon’t create much productivity.

Now, Stemberg runs a venture capital business. “I helped createover 100,000 jobs myself," he said. "Pinkberry and City Sports andJ. McLaughlin are growing and adding employment.”
To do that, he had to overcome hurdles placed in the way bygovernment.

“All that we get is grief and more hoops to jump through andmore forms to fill out and more regulations to comply with,”complained Stemberg. “Fastest-growing investment segment in venturecapitalism: compliance software.”

Compliance is the big word in business today. Every business hasto have a compliance department. But resources are scarce, so thesedepartments suck away creativity. It’s one reason that thesesuccessful businesspeople don’t think they could do today what theydid in the past.

Mike Whalen, CEO of Heart of America Group, said he got startedwith loans from banks that took a chance on an unknown: “It is notan underwriting standard that can be dictated by Dodd-Frank with 55pages. It’s kind of a gut instinct.”

But John Allison, who built BB&T Corp. into the 12th biggestbank in America, says that “gut instinct” is now illegal.

“It would be very difficult to do what we did then today. It wassemi-venture capital thing. The government regulations (today) areso tight, including setting credit standards, particularly sincethe so-called financial crisis and since they ... changed thecredit standards in the banking industry, making it very hard forthe banks to finance small businesses.”

These successful businessmen realize that in one way, theyprofit from the regulatory burden. They can absorb the costs. Thatgives them an advantage over smaller competitors.

“Somebody who wants to compete with us can’t because we canafford to hire the guys that can read this stuff and to keep us incompliance with the law. They can’t,” Anderson said.

Politicians rarely understand this. One who learned it too latewas Sen. George McGovern. After he left office, he started a smallbed-and-breakfast and hit the regulatory wall he helped create.Later, he wrote, “I wish during the years I was in public office Ihad this firsthand experience about the difficulties businesspeopleface....We are choking off business opportunity.”

Wish they learned that before leaving office.

COPYRIGHT 2011 BY JFS PRODUCTIONS, INC.
DISTRIBUTED BY CREATORS.COM

The True Nature of Fortune Cookies

2011-12-22T09:30:00.000-08:00

Superintendent Whines: But Now We Have To Compete!

2011-12-21T09:30:00.000-08:00

Katherine Mangu-Ward of Reason points out a recent complaint by the Michigan superintendent, Rob Glass. Michigan is on track to allow unlimited charter schools by 2015. He whines:

"We might see a fundamental shift that takes us where we maynever see where we are today again," he said at a well-attendedschool board meeting Thursday night at the Doyle Center. "We haveto think about how we're going to compete in this newlandscape."

Um, I think that might be the point...

Term Limits Talk Between Walter Williams and James Buchanan

2011-12-20T09:30:00.000-08:00

I have generally been in favor of term limits, but I think Walter Williams makes some good points about the possible ineffectiveness of term limits.

The Problem is Crony Capitalism

2011-12-18T09:30:00.000-08:00

Tea Party vs. Occupy: A Fierce Dichotomy

2011-12-17T09:30:00.000-08:00

Armstrong and Getty: Name That Trombone Christmas Song!

2011-12-16T13:08:00.000-08:00

For years, Joe Getty has been treating us to his once-a-year trombone playing by doing a Name That Tune with Christmas songs. It is easily one of my favorite parts of the year and announces the beginning of the Christmas season. Merry Christmas and to all a New Eardrum!

Armstrong and Getty Band Names for 2011

2011-12-16T13:05:00.000-08:00

Armstrong and Getty have a tradition of creating band names from tidbits of conversations. The names are hilarious and listener Mary in San Jose collected all the names they invented during 2011. This is a part of that list.

Drug Policy Recommendations

2011-12-16T09:30:00.000-08:00

The Cato Institute recently did a conference on the failed US drug policy. ReasonTV interviewed quite a few of those who participated about their opinions.

ReasonTV Interviews Susan Herman, President of the ACLU

2011-12-15T09:30:00.000-08:00

I don't agree with every position that the ACLU has taken but I found this interview fascinating and I agree with Ms. Herman that people of all political stripes need to be communicating to their elected officials that government has gotten too large and too powerful.

Help Aggregate Demand This Christmas

2011-12-14T18:00:00.000-08:00

If you haven't seen the Keynes v. Hayek videos you need to do that NOW! (Also, if you're spending your evenings wondering to yourself how you can surprise me this Christmas, this video gives you a couple of ideas.) ;-)

Lawrence Reed on Humility

2011-12-14T09:30:00.000-08:00

The December issue of The Freeman had the following article. I really enjoy Lawrence Reed's writings because he gives me hope when I get upset with the world. This article is on the need for humility.

Wanted: A Healthy Dose of Humility

by Lawrence W. Reed • December 2011 • Vol. 61/Issue 10

An awful lot of people in this world are really puffed up about themselves. One of the character traits I wish were much more widely practiced these days is good old-fashioned humility.

T. S. Eliot said, “Humility is the most difficult of all virtues to achieve; nothing dies harder than the desire to think well of oneself.”

If you’re not sure what humility is, these lyrics from an old Mac Davis tune will at least remind you of what it’s not:

Oh Lord it’s hard to be humble when you’re perfect in every way.
I can’t wait to look in the mirror ‘cause I get better looking every day.
I guess you could say I’m a loner, a cowboy outlaw tough and proud.
I could have lots of friends if I want to, but then
I wouldn’t stand out from the crowd.
Oh Lord, it’s hard to be humble!

I couldn’t disagree more with those words. It’s not hard to be humble if you stop comparing yourself to others. It’s not hard to be humble if your focus is building your own character. It’s not hard to be humble if you first come to grips with how little you really know. “The wise person possesses humility. He knows that his small island of knowledge is surrounded by a vast sea of the unknown,” noted Harold C. Chase.

One of the greatest teachers and theologians of our day, Pastor Timothy Keller of Redeemer Presbyterian Church in New York City, makes this keen observation: “Until the twentieth century most cultures, including ours, held that having too high an opinion of oneself was the root of most of the world’s troubles. Misbehavior from drug addiction to cruelty to wars resulted from hubris or pride—a haughtiness of spirit that needed to be deterred or disciplined. The idea that you were bigger or better, or more self-righteous, or somehow immune from the rules that govern others—the absence of humility, in other words—gave you license to do unto others what you would never allow them to do unto you.”

These days, however, it’s a different story. Being humble rubs against what millions have been taught under the banner of “self-esteem.” Even as our schools fail to teach us elemental facts and skills, they somehow manage to teach us to feel good in our ignorance. We explain away bad behavior as the result of the guilty feeling bad about themselves. We manufacture excuses for them, form support groups for them, and resist making moral judgments lest we hurt their feelings. We don’t demand repentance and self-discipline as much as we pump up their egos.

Don’t get me wrong. Humility doesn’t mean thinking less of yourself. It means thinking of yourself less. It means putting yourself in proper perspective. It means cultivating a healthy sense of your limitations and the vast room you have to grow and improve. It means you don’t presume to know more than you do.
Fifty-three years ago this month (December 1958) Leonard Read’s essay “I, Pencil” ^[1] made its debut. Let me summarize it for you here: No one person—repeat, no one, no matter how smart or how many degrees follow his name—could create from scratch, entirely by himself, a small, everyday pencil, let alone a car or an airplane.

A mere pencil—a simple thing, yet beyond any one person’s complete comprehension. Think of all that went into it, the countless people and skills assembled miraculously in the marketplace without a single mastermind—indeed, without anyone knowing more than a corner of the whole process. It’s impossible not to think of the huge implications of this lesson for the economy and the role of government.

It is in fact a message that humbles the high and mighty. It pricks the inflated egos of those who think they know how to mind everybody else’s business. It explains in plain language why central planning of society or an economy is an exercise in arrogance and futility. If I can’t make a pencil, holy cow, I’d better be careful about how smart I think I am.

Big Plans, Broken Shells

Maximilian Robespierre blessed the horrific French Revolution with this chilling declaration: “On ne saurait faire une omelette sans casser des oeufs.” Translation: “One can’t expect to make an omelet without breaking eggs.” He worked tirelessly to plan the lives of others and became the architect of the Revolution’s bloodiest phase: the Reign of Terror. Robespierre and his guillotine broke eggs by the thousands in a vain effort to impose a utopian society with government planners at the top and everybody else at the bottom.
That French experience is one example in a disturbingly familiar pattern. Call them what you will—socialist, interventionist, collectivist, statist—history is littered with their presumptuous plans for rearranging society to fit their vision of the common good, plans that always fail as they kill or impoverish people in the process. I’ve said it in this magazine before but I’m happy to say it again: If big government ever earns a final epitaph, it will be, “Here lies a contrivance engineered by know-it-alls who broke eggs with abandon but never, ever created an omelet.”

None of the Robespierres of the world knew how to make a pencil, yet they wanted to remake entire societies. How utterly preposterous and mournfully tragic!

The destructive acts of pride don’t always come from brash and fiery revolutionaries or egotistical tyrants full of pompous and hateful rhetoric. More often they come cloaked in benevolence and disguised as the wisdom of the elders, who have only the best of intentions for the whole community. An outstanding example of this type of hubris is the political philosophy in Plato’s Republic, in which he maintains, with breathtaking vanity, that the world would be a harmonious and prosperous place if only philosophers like himself were given absolute authority to run it as they saw fit!

We would miss a large implication of Leonard Read’s message if we assume it aims only at the tyrants whose names we all know. The lesson of “I, Pencil” is not that error begins when the planners plan big. It begins the moment one tosses humility aside, assumes he knows the unknowable, and employs the force of government to control more and more of other people’s lives. That’s not just a national disease. It can be very local indeed.

In our midst are people who think that if only they had government power on their side, they could pick tomorrow’s winners and losers in the marketplace, set prices or rents where they ought to be, decide which forms of energy should power our homes and cars, and choose which industries should survive and which should die. They make grandiose promises they can’t possibly keep without bankrupting us all. They should stop for a few moments and learn a little humility from a lowly writing implement.

So humility, in my book, is pretty important stuff. It may well be the one virtue of strong character that is a precondition of all the others.

Article printed from The Freeman | Ideas On Liberty: http://www.thefreemanonline.org

The Obama Administration vs. California Marijuana Policy

2011-12-13T09:30:00.000-08:00

Dear Occupy: Don't Confuse Capitalism and Crony Capitalism

2011-12-11T09:30:00.000-08:00

Democracy Requires Boundaries

2011-12-10T09:30:00.000-08:00

This is a great 2 1/2 minute explanation on a couple of the dangers of democracy.

Book to Read: The Rights of the People

2011-12-09T09:30:00.000-08:00

I just reviewed a book by Tim Sandefur and today read a review he wrote about another book I'm going to have to read. Sounds like I'll need to take my blood pressure meds before I read it though. Here is an excerpt from Tim's review:

The Rights of the People: How Our Search for Safety Invades Our Liberties
By: David K. Shipler
Times Books, $27.95, 400 pages

....
Shipler surveys — with exceptional accuracy for a nonlawyer — the sad state of the law regarding searches and seizures, interrogations, and confessions; he also reports from the scene, riding the rough neighborhoods of Washington, D.C., with police officers who are quite conscious of what pressures they can exert, and what half-truths they can employ, to circumvent the spirit, while staying within the letter, of the law. In fact, by exploiting Fourth Amendment precedents, police officers can now search more or less at will. In Atwater v. City of Lago Vista (532 U.S. 318 (2001)), for example, the Supreme Court held the Constitution was not violated when a police officer handcuffed and arrested a Texas mother who was driving without wearing a seat belt. Because officers can search an arrested suspect and anyone in her immediate vicinity, the Atwater ruling gives police almost unlimited search powers. As then — Justice Janice Rogers Brown observed in People v. McKay (27 Cal. 4th 601, 632633 (2002) (concurring opn.)): "In the pervasively regulatory state, police are authorized to arrest for thousands of petty malum prohibitum 'crimes' — many too trivial even to be honestly labeled infractions.... Since this indiscriminate power to arrest brings with it a virtually limitless power to search, the result is the inevitable recrudescence of the general warrant."

Worse, the U.S. Supreme Court has held that warrants are not required when prosecutors seek to obtain information from third parties to whom a defendant voluntarily yields it. Since many people do not realize what information they are giving away — location information automatically beamed to their cell phone companies, for instance — they are far more vulnerable to snooping than they realize....

Due Process on the Chopping Block

2011-12-08T09:30:00.000-08:00

I frequently can't believe the complete disregard for the Constitution that our politicians seem to have, but this just leaves me speechless. The Senate wants the President to have the power to detain indefinitely American citizens that he declares enemy combatants? What happened to due process. Apparently that Bill of Rights thing is just a bunch of *!#(&%$.

Book: Property Rights in 21st Century America

2011-12-07T15:56:00.000-08:00

Cornerstone of Liberty: Property Rights in 21st Century America by Timothy Sandefur
My rating: 4 of 5 stars

This book is a very powerful indictment of the decline of property rights in the US. It starts with a valuable and concise history of the philosophical underpinnings of private property rights and then details some of the worst abuses of government power in taking property rights from Americans. I love Tim Sandefur and have heard him interviewed several time on the Armstrong and Getty Show, but I wish there had been more helpful suggestions on how to reverse this trend. One way to start would be to get everyone to read this book.

View all my reviews

Wall Street and Occupy Sitting In a Tree...

2011-12-07T09:30:00.000-08:00

This is a great indictment of both Wall Street crony capitalism and Occupy Wall Street greed. Share it with your friends!

Obama the Powerless?

2011-12-06T13:17:00.001-08:00

Gene Healy wrote a great op-ed on President Obama that is worth reading. Here is one of my favorite excerpts:

It isn't just that he's been a terrible president, it's that noearthly figure could deliver the miracles he promised: among otherthings, "a complete transformation of the economy, "care for thesick and good jobs to the jobless," to "end the age of oil in ourtime," begin to heal the very planet and, perhaps mostunrealistically, "fundamentally change the way Washingtonworks."

Like they say, though, it couldn't happen to a nicer guy. SinceObama has stoked irrational public expectations for presidentialsalvation in virtually every public policy area, it's hard to feelsorry for him.

Trade Is A Win For Both Parties

2011-12-04T09:30:00.000-08:00

This video is a good explanation of why trade doesn't involve one party having to lose in order for the other party to get what it wants.

The Trumping Resource: Innovation

2011-12-03T09:30:00.000-08:00

Julian Simon was an economist who boldly defied the Malthusian ethic that resources would eventually dwindle and mankind would suffer the consequences. His argument was that human ingenuity and innovation combined with free-market principles would come up with more efficient ways to use resources and alternative resources for those in decline. That's why I have a hard time worrying about "peak oil". Here is a great video on this topic.

New Job For UC Davis' Pepper-Spraying Cop?

2011-12-02T09:30:00.000-08:00

Chris Matthews on President Obama

2011-12-01T09:30:00.000-08:00

This is from a recent Armstrong and Getty show. It's clips of Chris Matthews talking about problems with President Obama. It's pretty interesting.

Congress, Less Popular Than Some Diseases

2011-11-30T11:06:00.001-08:00

Turns out that a recent poll shows that Congress is unpopular. Who'd a thunk it?

Nick Gillespie Interviews Judge Andrew Napolitano

2011-11-29T21:07:00.001-08:00

I try to keep the videos I post relatively short but this interview of Judge Andrew Napolitano was really good. I was really glad to hear a libertarian defense of the pro-life position in the interview also.

Carlos Gomar Represents the Worst Aspects of Entitlement Culture

2011-11-27T20:35:00.001-08:00

I blogged a couple of weeks ago about University of Utah student Carlos Gomar who was at the Occupy protests with a sign that read: "Throw me a bone, pay my tuition". I won't rehash my comments on how pathetic an activity that is, but I will post a video of Mr. Gomar being interviewed about that sign. He looks even more stupid in the interview. When asked why someone should pay his tuition, his response is essentially, "Because I want them to." Really?! How about you get a job rather than protest and then maybe you'll be able to pay your own bloody tuition? What a parasite. Here is the video:

I wanted to make sure that this was indeed the same guy mentioned in the Business Week article so I did a Google search for "Carlos Gomar Utah" and this story and photo came up with the heading "Utahns Hold Vigil For DREAM Act". Does the guy in the photo look familiar? It's the same guy in the video above so I feel pretty confident that it is the same Carlos Gomar mentioned in the Business Week article. Again, Mr. Gomar, why don't you get a freakin' job like the rest of us did to pay for our college educations? Ya lazy maggot.

(Djamila Grossman | The Salt Lake Tribune) Carlos Gomar leads supporters and community members in a prayer for passage of the DREAM Act, near Temple Square in Salt Lake City, Sunday, Nov. 28, 2010.

The DREAM Act would create a path to legalization and citizenship for immigrant youth who serve the country through education or the armed forces.

Utahns hold vigil for DREAM Act

By LESLEY MITCHELL

The Salt Lake Tribune

First published Nov 28 2010 07:09PM

Updated Mar 23, 2011 12:18AM

Supporters of a measure that would provide children of undocumented immigrants a path to legal status gathered Sunday in downtown Salt Lake City to raise awareness of a Senate vote expected this week on the DREAM Act.

The gathering of several dozen people along South Temple near Main Street was among many events held nationwide over the holiday weekend to help push for passage of the Development, Relief and Education for Alien Minors Act, or DREAM Act. The House and Senate are expected to vote on the act this week, with the toughest opposition expected in the Senate.

Forming a circle and weathering snowfall for more than an hour, those in attendance prayed for passage of the act. Alma Castrejon, an organizer of the event in Salt Lake City, also urged the public to call Utah Republican Sens. Bob Bennett and Orrin Hatch to ask for their support.

Bennett has said he supports the DREAM Act. Hatch, a longtime supporter of the measure, recently expressed reservations about it, saying the nation’s immigration debate may have more pressing issues to address first, such as national security and the border.

Critics of the measure have argued that it would provide amnesty to hundreds of thousands of people who are in the country illegally.

The act would offer conditional legal residency for those who entered the country illegally before age 16. To qualify for relief under the act, they would have to have lived in the United States for at least five years, earned a high school diploma or GED diploma and completed at least two years of college or military service. The measure is designed for those under 35 who do not have a criminal record.

“There are many people who have been in this country since they were 2 years old,” said Alonso Reyna, of Salt Lake City. “These are people who want to stay here and serve our country.”

Eduardo Reyes-Chavez, of Salt Lake City, said he attended the vigil Sunday to show his support for students in Utah who live in fear of being deported — and because the DREAM Act “is the right thing to do.”

“Education is important to everyone,” he said. “It doesn’t matter whether you are undocumented or not, you should have the right to an education.”

San Diego: A Model for Pension Reform?

2011-11-27T09:30:00.000-08:00

One of the gentleman interviewed in this video is Chris Reed who is one of my favorite writers for the San Diego Union-Tribune. I hope they are able to pull off this reform next summer.

The Real Thanksgiving Story

2011-11-26T21:25:00.001-08:00

A great explanation of the problem with communal property and the "tragedy of the commons".

Thanksgiving: What Are You Grateful For?

2011-11-22T11:50:00.001-08:00

The Top 5 Libertarian Books

2011-11-22T09:30:00.000-08:00

Stephen Davies gives here his Top 5 (6, really) Books on Libertarian thought. Here are the links and then the video.

John Stuart Mill, On Liberty
Wilhelm von Humboldt, The Sphere and Duties of Government
F.A. Hayek, The Use of Knowledge in Society
Randy Barnett, The Structure of Liberty
Douglas Rasmussen, Norms of Liberty
Mark Pennington, Robust Political Economy

If I Ever Kill You You'll Be Awake, You'll Be Facing Me and You'll Be Armed

2011-11-20T09:30:00.000-08:00

As a fan of Firefly, Nathan Fillion, free speech and fascism-fighters, this video made me swoon.

The Importance of Failure

2011-11-19T18:30:00.000-08:00

I recently read an article entitled "The Importance of Failure" by Steven Horwitz and Jack Knych in The Freeman. It was so well written and important for people to understand that I'm linking to it and posting the whole thing here. Fear of failure seems to be one of the defining characteristics of statists and Keynesians, and that just shows their ignorance of failure's role in human advancement.

The Importance of Failure

by Steven Horwitz and Jack Knych • November 2011 • Vol. 61/Issue 9

In today’s society failure has become something to fear, avoid, and therefore prevent at all costs. Whether it is unemployment compensation, farm subsidies, or bailouts for failing companies, the world seems to view failure as having no redeeming social value. If success is all good and failure is all bad, then it seems as though we should do everything we can to remedy or prevent failure.

But is that so? Without denying the value of perseverance, and recognizing that the slogan “never give up” can be useful in overcoming certain obstacles, we must keep in mind that failure can act as a guide to more worthwhile activities. For example, in 1921 Walt Disney started a company called the Laugh-O-Gram Corporation, which went bankrupt two years later. If a friend of Disney or the government hadn’t let him fail and move on, he might never have become the Walt Disney we know today.

More important than this individual learning process is the irreplaceable role failure plays in the social learning process of the competitive market. When we refuse to allow failure to happen, or we cushion its blow, we ultimately harm not only the person who failed but also all of society by denying ourselves a key way to learn how best to allocate resources. Without failure there’s no economic growth or improved human well-being.

Economists, especially those of the Austrian school, often emphasize how entrepreneurs discover new knowledge and better ways of producing things. But entrepreneurial endeavors frequently fail and the profits thought to be in hand often don’t materialize. According to the U.S. Small Business Administration, over half of small businesses fail within the first five years. But failed entrepreneurial activity is just as important as successful entrepreneurial activity. Markets are desirable not because they lead smoothly to improved knowledge and better coordination, but because they provide a process for learning from our mistakes and the incentive to correct them. It’s not that entrepreneurs are just good at getting it right; it’s also that they (like all of us) can know when they’ve got it wrong and can obtain the information necessary to get it right next time.

On this view failure drives change. While success is the engine that accelerates us toward our goals, it is failure that steers us toward the most valuable goals possible. Once failure is recognized as being just as important as success in the market process, it should be clear that the goal of a society should be to create an environment that not only allows people to succeed freely but to fail freely as well.

The Knowledge Problem

Understanding this point requires a broader vision of the market process. For Austrian economists the fundamental economic problem is not the efficient allocation of given resources to our most valued ends at a given time, but rather how we overcome the “knowledge problem”—the division of knowledge that characterizes the social world. It is more important to figure this out than to master the problem of resource allocation because new knowledge drives economic growth and creates prosperity. If the main task of the market were merely to allocate known resources to their most efficient uses, economic growth would seem impossible, since we would be stuck in a primitive world. Where is there any room for the innovation or change that drives progress and improves our lives? If a plow is deemed the most efficient use of iron and all iron is constantly allocated to making plows, how could iron ever be allocated for a new invention such as a tractor? The answer is that entrepreneurs change the most efficient use of resources by discovering new uses. By understanding the economic problem posed by limited, unique, and dispersed knowledge, we can better understand the role failure plays in coping with this problem.

Competition figures prominently in this system. Competition promotes entrepreneurial activity and the discovery of knowledge by empowering a variety of decision-makers to try to find new and better ways of using resources as well as new ends to achieve. This decentralization ensures that what F. A. Hayek called the local knowledge of time and place will be best used. Centralized planning, like other forms of government allocation, necessarily relies on the knowledge of fewer people, limiting discovery and restricting knowledge-dissemination to fewer channels. Competition is a better way to overcome the knowledge problem.

Failure and Opportunity

We can understand the role of failure if we recognize, as Ludwig von Mises did, that all human action intends to “remove felt uneasiness.” We are always striving to improve ourselves by achieving our highest valued ends as often as we can. On these terms, failure is all around us because no human ever achieves a complete lack of felt uneasiness. We always have unsatisfied ends. Israel Kirzner uses the term “alertness” to describe how the entrepreneurial element of human action identifies which ends to strive for and which means are available. Kirzner says that for market action to occur, entrepreneurs must first be alert to opportunities for profit. The possibility of profit keeps entrepreneurs alert to the ways people strive for ends or make use of means that fail to remove felt uneasiness. Once they’ve noticed this failure in human knowledge, the same opportunity for profit spurs entrepreneurial activity to find a new way to achieve those ends, or to find better ends themselves. So a failure in human knowledge becomes the catalyst for producing new knowledge via the entrepreneurial process.

When entrepreneurs attempt to correct a particular failure in knowledge, they often fail themselves and incur losses because of competition. Although bankruptcy is painful in the short term, such failure is an integral part of how entrepreneurial activity and the market function. Failure in a competitive society informs market participants about which activities or jobs to strive for and which to avoid, lest they waste time and money. Jobs that add value to society should be pursued, while those that fail to add value should be eliminated. Markets help guide market participants far better than any bureaucracy can because bureaucracies lack the market’s key components of competition, profit, and loss, which reveal failures and allow for their correction.

Because competition is a voyage into the unknown, we can only know after the fact what works and what does not. Thus economic failure is not “waste.” Calling entrepreneurial failure a “waste” implicitly assumes that one knew ahead of time what the best use of resources was. Such knowledge is not available to anyone, which is why failure is necessary to provide the needed signals.
The subsidies, bailouts, stimulus packages, and other interventions that now increasingly characterize the U.S. economy disrupt this process. Farm subsidies (including cheap water out west), for example, prevent entrepreneurs from finding and capitalizing on failures of knowledge in farming. While there may be new and better ways to grow food, it is difficult for entrepreneurs to find this out if farmers are kept afloat by the government. Perhaps decentralized, local farming would be discovered as more profitable if larger monoculture farms that are possibly damaging the environment were allowed to fail. By preventing inefficient methods of production from suffering losses, subsidies reduce the degree of failure in agricultural markets and make it harder to know that misallocation has taken place and to correct it.

Not letting Chrysler and General Motors fail during the Great Recession prevented an entrepreneurial response to this misuse of resources. The bailouts created two types of negative incentives. First, the companies were encouraged to keep making cars when their losses showed the resources and labor could better be used elsewhere. Second, the government deterred any new entrepreneur from entering the industry and doing things better. Many politicians defended the bailout because they did not want the hundreds of thousands of autoworkers to become unemployed. But when hundreds of thousands of workers become unemployed they do not disappear. They find different jobs that would contribute to society in a better way than working for a bankrupt auto company. The physical assets of bankrupt companies also get reallocated to alert entrepreneurs looking for bargains. Failure is necessary for learning and for success.

The Keynesian argument for government jobs programs is that any sort of work will restart spending in a recession, even hiring people to dig ditches and fill them up. But do a higher GDP and a job by themselves make society better off? Would it be better to have a 2 percent unemployment rate with 8 percent of the employed population doing jobs that don’t add real value (so around 10 percent of the labor force is not adding real value) or more unemployment with everyone who is working really adding value?

Unemployment

Unemployment is a form of failure, and it involves the same considerations as when businesses fail. If a job no longer contributes value this needs to be made clear so that those workers can find jobs that actually do. Imagine if the disemployment of farmers had been prevented during the transition to an industrial economy. In 1941, 41 percent of the U.S. workforce was in agriculture. In 2011 the portion was 3 percent. Where would industry be today if we had prevented the majority of the 41 percent from losing their jobs and finding new ones? It is right that this sort of “failure” was allowed to occur because the displaced farmers found new jobs in the cities and elsewhere. Those new jobs helped society transition from agriculture to industry to services, creating even newer jobs all along the way. This is strong evidence that learning from failure takes place in labor markets.

Autopoiesis (life’s continuous production of itself) is one of the principal characteristics of life, and constant change is its essence. This applies to the economy as well. For us to maintain or increase a high standard of living we must constantly change how we do things. This change won’t be fueled by lucky guesses or by bureaucratic decrees, but instead often by entrepreneurial activity in the face of failure in the market. Since that activity drives the train of progress, it is in society’s interest that the tracks be cleared of governmental obstacles.

Article printed from The Freeman | Ideas On Liberty: http://www.thefreemanonline.org
URL to article: http://www.thefreemanonline.org/featured/the-importance-of-failure/

ReasonTV: 3 Reasons Not to Forgive Student Loans

2011-11-19T09:30:00.000-08:00

Simply Astounding Musical Genius

2011-11-17T09:30:00.000-08:00

This 60 Minutes piece about a 12 year-old composer at Julliard is simply amazing.

Bad Lip Reading: Michell Bachmann

2011-11-16T09:30:00.000-08:00

You've probably seen some of these Bad Lip Reading videos, but they still crack me up so I thought I would share this one.

"One Jew Person" "I bring milk, not backyard meth. It's a prison party." "The sugar fountain fairy swore so hard"

Anti-Dumping = Job-Killing

2011-11-15T21:24:00.001-08:00

This is a great video on why "anti-dumping" laws actually hurt the Americans they're supposed to protect. If China wants to sell us their silicon for cheap we should let them. That means we keep our own supplies for future use if necessary. Dump away, China!

Liberty, Security and the TSA

2011-11-10T13:11:00.001-08:00

Great video on the "security theater" that is our TSA.

Too Big To Fail? Let's Make You Bigger!

2011-11-10T09:00:00.000-08:00

The Washington Post had an interesting article recently about Wall Street's quick recovery compared to the rest of the country. The thing that struck me though was pretty early on in the article.

The largest banks are larger than they were when Obama took office and are nearing the level of profits they were making before the depths of the financial crisis in 2008, according to government data.

Sooooo, what you're telling me is that we bailed out these banks because if they had failed it would have brought down Western Civilization as we know it and our solution to prevent that from happening again is to make them EVEN BIGGER?! Sure. Nothing bad could happen because of that.

3 Things I Learned As My Plane Crashed

2011-11-09T17:30:00.000-08:00

What a powerful talk. We can take advantage of Ric's experience and apply some great life lessons because of it.

2011-11-09T09:00:00.000-08:00

A. Barton Hinkle recently wrote an interesting piece about how government is interfering with our lives medically. Here is an interesting excerpt.

Merely providing resources is no longer enough. See, for example,health care: To provide the uninsured with medical care, it doesnot suffice simply to pay taxes that fund social-welfare programs.Under the Romney/Obama individual mandate, everyone must buy healthinsurance for the sake of the common good.

The same rationale undergirds much of the campaign againstobesity—which, some say, costs society $270 billion a year. Part ofthat total comes from direct expenses such as medical care fordiabetics. An additional $73 billion allegedly comes from lostproductivity due to poor health—at least according to a ratherinexact study funded (surprise!) by Allergan, the maker of agastric-band system for obesity surgery.

The social cost of lost productivity is an interesting concept.It implies not only that you have a duty to avoid becoming a burdento others, but also that you have an affirmative duty to produceresources for others. (Because otherwise, society has "lost"something that, in truth, it never had in the first place: yourfuture exertions.)

I find it interesting that the underlying assumption is that I have a duty to provide my productive efforts to the common good. That whole way of thinking is repugnant to me. I voluntarily give my efforts to organizations that I believe in, but the assumption that my efforts are "deserved" by society, and particularly government, is ridiculous.

The Role of Incentives

2011-11-08T11:42:00.000-08:00

This is a great explanation on how economists try to evaluate the role of incentives in decision-making.

Military Reunion 9

2011-11-07T19:30:00.000-08:00

What Does Equality Mean?

2011-11-07T13:35:00.000-08:00

This is a great, instructive video on what the Founding Fathers meant when they used the term "equality".

Military Reunion 8

2011-11-05T19:30:00.000-07:00

Reason: Sexual Abuse Victim Forced To Pay Attacker

2011-11-05T08:35:00.000-07:00

Reason Magazine pointed this out the other day. It's appalling and I can't believe this judge would make a decision like this. Apparently justice is blind. And stupid.

Here is an excerpt from Reason:

A San Diego judge orderedCrystal Harris to pay $1,000 a month in spousal support to herex-husband -- just as soon as he finishes up his six year prisonsentence for sexually assaulting her. As 10News reports, "Theentire assault was caught on tape and what it captured was enoughto convict Shawn Harris of a felony -- forced oral copulation."
So why is a victim being forced to pay her attacker? Accordingto Judge Gregory Pollock, it's because Crystal Harris brought homesix figures worth of bacon while Shawn Harris was unemployed.

"I can't look at a 12-year marriage where one side is making$400 a month, the other side is making over $11,000 and say nospousal support," Pollock said in court. "That would be an abuse ofdiscretion."

Michael Moore Must Just Laugh At How Stupid People Are

2011-11-04T09:00:00.000-07:00

Shikha Dalmia wrote a quick piece on how disingenuous Michael Moore is. It's short so I'm just posting the whole thing here. He has to just laugh at night about how stupid people are for believing he's "one of them."

More on Michael Moore's Millions

Shikha Dalmia | November 3, 2011

When Michael Moore told Piers Morgan that he was not among the hated 1 percent, hewasn’t lying. That’s because with a net worth upwards of $50 million he’s among the top 0.1 percent.
He made a big deal about paying a third of his first $3 millionin taxes to this “great country," as I notedpreviously. But what has he been doing since then? Collectingsubsidies from Michigan taxpayers to make millions more, as itturns out, completely unlike the bailout money that evil WallStreet fat-cats received from federal taxpayers.
Henry Payne, my former colleague at The Detroit Newsreports that Moore took $1 million in film subsidies to make“Capitalism: A Love Story” from a state that has amega-billion dollar fiscal hole.
What’s more, he made $222 million at the box office whose DVDdistribution was handled by Sony, an evil corporation. What did hedo with the money? Give it all away in charity, buyingturkeys for Michigan’s poor on Thanksgiving? Errr….Not exactly:He bought a $5 million mansion in tony Torch Lake, Michigan.
But that doesn't mean he can't rally a crowd in front of OaklandCity Hall urging it to expand its protests to leafy suburbs likeOakland's middle-class Walnut Creek because that’s, you know,“where the money is,” as he put it.
Actually, as Payne notes, Torch Lake is where the money is. Somaybe after he is done with Oakland he can lead an Occupy TorchLake protest. Yes, Michael?
Full disclosure: I live in Oakland County that, I believe, couldreally use a protest to liven things up.

Military Reunion 7

2011-11-03T19:30:00.000-07:00

Freedom Matters

2011-11-03T13:26:00.001-07:00

Halloween Can Be an Opportunity to Teach About Taxes

2011-11-02T17:30:00.000-07:00

Military Reunion 6

2011-11-01T19:30:00.000-07:00

Pelosi: Boeing Plant Should Be Shut Down For Not Unionizing

2011-11-01T14:00:00.000-07:00

There are essentially two kinds of people when it comes to government: those that think that government should do little more than protect liberties and enforce contracts and those who think that government should step in wherever it feels like it. Which kind would you guess Nancy Pelosi is?

Hunger: Overpopulation is Not the Problem

2011-10-31T20:56:00.000-07:00

My brother pointed me to this video which is a quick explanation on why fretting about overpopulation's effect on world hunger is wasted energy.

Military Reunion 5

2011-10-30T19:30:00.000-07:00

Competition vs. Cooperation

2011-10-29T09:30:00.000-07:00

This is one of my favorite essays. David Boaz wrote it about 14 years ago for The Freeman (one of my favorite magazines). In it he explained that competition and cooperation were two sides of the same coin. He also demolishes the myth that libertarians are atomistic hermits who want to be left alone. Great essay!

The Freeman | Ideas On Liberty
http://www.thefreemanonline.org

Competition and Cooperation

by David Boaz • September 1997 • Vol. 47/Issue 9

David Boaz, executive vice president of the Cato Institute, is author of Libertarianism: A Primer and editor of The Libertarian Reader (both published by The Free Press, 1996).

Defenders of the market process often stress the benefits of competition. The competitive process allows for constant testing, experimenting, and adapting in response to changing situations. It keeps businesses constantly on their toes to serve consumers. Both analytically and empirically, we can see that competitive systems produce better results than centralized or monopoly systems. That’s why, in books, newspaper articles, and television appearances, advocates of free markets stress the importance of the competitive marketplace and oppose restrictions on competition.

But too many people listen to the praise for competition and hear words like hostile, cutthroat, or dog-eat-dog. They wonder whether cooperation wouldn’t be better than such an antagonistic posture toward the world. Billionaire investor George Soros, for instance, writes in the Atlantic Monthly, “Too much competition and too little cooperation can cause intolerable inequities and instability.” He goes on to say that his “main point . . . is that cooperation is as much a part of the system as competition, and the slogan ‘survival of the fittest’ distorts this fact.”

Now it should be noted that the phrase “survival of the fittest” is rarely used by advocates of freedom and free markets. It was coined to describe the process of biological evolution and to refer to the survival of the traits that were best suited to the environment; it may well be applicable to the competition of enterprises in the market, but it certainly is never intended to imply the survival of only the fittest individuals in a capitalist system. It is not the friends but the enemies of the market process who use the term “survival of the fittest” to describe economic competition.

What needs to be made clear is that those who say that human beings “are made for cooperation, not competition” fail to recognize that the market is cooperation. Indeed, as discussed below, it is people competing to cooperate.

Individualism and Community

Similarly, opponents of classical liberalism have been quick to accuse liberals of favoring “atomistic” individualism, in which each person is an island unto himself, out only for his own profit with no regard for the needs or wants of others. E. J. Dionne Jr. of the Washington Post has written that modern libertarians believe that “individuals come into the world as fully formed adults who should be held responsible for their actions from the moment of their birth.” Columnist Charles Krauthammer wrote in a review of Charles Murray’s What It Means to Be a Libertarian that until Murray came along the libertarian vision was “a race of rugged individualists each living in a mountaintop cabin with a barbed wire fence and a ‘No Trespassing’ sign outside.” How he neglected to include “each armed to the teeth” I can’t imagine.

Of course, nobody actually believes in the sort of “atomistic individualism” that professors and pundits like to deride. We do live together and work in groups. How one could be an atomistic individual in our complex modern society is not clear: would that mean eating only what you grow, wearing what you make, living in a house you build for yourself, restricting yourself to natural medicines you extract from plants? Some critics of capitalism or advocates of “back to nature”—like the Unabomber, or Al Gore if he really meant what he wrote in Earth in the Balance—might endorse such a plan. But few libertarians would want to move to a desert island and renounce the benefits of what Adam Smith called the Great Society, the complex and productive society made possible by social interaction. One would think, therefore, that sensible journalists would stop, look at the words they typed, and think to themselves, “I must have misrepresented this position. I should go back and read the libertarian writers again.”

In our time this canard—about isolation and atomism—has been very damaging to advocates of the market process. We ought to make it clear that we agree with George Soros that “cooperation is as much a part of the system as competition.” In fact, we consider cooperation so essential to human flourishing that we don’t just want to talk about it; we want to create social institutions that make it possible. That is what property rights, limited government, and the rule of law are all about.

In a free society individuals enjoy natural, imprescriptible rights and must live up to their general obligation to respect the rights of other individuals. Our other obligations are those we choose to assume by contract. It is not just coincidental that a society based on the rights of life, liberty, and property also produces social peace and material well-being. As John Locke, David Hume, and other classical-liberal philosophers demonstrate, we need a system of rights to produce social cooperation, without which people can achieve very little. Hume wrote in his Treatise of Human Nature that the circumstances confronting humans are (1) our self-interestedness, (2) our necessarily limited generosity toward others, and (3) the scarcity of resources available to fulfill our needs. Because of those circumstances, it is necessary for us to cooperate with others and to have rules of justice—especially regarding property and exchange—to define how we can do so. Those rules establish who has the right to decide how to use a particular piece of property. In the absence of well-defined property rights, we would face constant conflict over that issue. It is our agreement on property rights that allows us to undertake the complex social tasks of cooperation and coordination by which we achieve our purposes.

It would be nice if love could accomplish that task, without all the emphasis on self-interest and individual rights, and many opponents of liberalism have offered an appealing vision of society based on universal benevolence. But as Adam Smith pointed out, “in civilized society [man] stands at all times in need of the cooperation and assistance of great multitudes,” yet in his whole life he could never befriend a small fraction of the number of people whose cooperation he needs. If we depended entirely on benevolence to produce cooperation, we simply couldn’t undertake complex tasks. Reliance on other people’s self-interest, in a system of well-defined property rights and free exchange, is the only way to organize a society more complicated than a small village.

Civil Society

We want to associate with others to achieve instrumental ends—producing more food, exchanging goods, developing new technology—but also because we feel a deep human need for connectedness, for love and friendship and community. The associations we form with others make up what we call civil society. Those associations can take an amazing variety of forms—families, churches, schools, clubs, fraternal societies, condominium associations, neighborhood groups, and the myriad forms of commercial society, such as partnerships, corporations, labor unions, and trade associations. All of these associations serve human needs in different ways. Civil society may be broadly defined as all the natural and voluntary associations in society.

Some analysts distinguish between commercial and nonprofit organizations, arguing that businesses are part of the market, not of civil society; but I follow the tradition that the real distinction is between associations that are coercive—the state—and those that are natural or voluntary—everything else. Whether a particular association is established to make a profit or to achieve some other purpose, the key characteristic is that our participation in it is voluntarily chosen.

With all the contemporary confusion about civil society and “national purpose,” we should remember F. A. Hayek’s point that the associations within civil society are created to achieve a particular purpose, but civil society as a whole has no single purpose; it is the undesigned, spontaneously emerging result of all those purposive associations.

The Market as Cooperation

The market is an essential element of civil society. The market arises from two facts: that human beings can accomplish more in cooperation with others than individually and that we can recognize this. If we were a species for whom cooperation was not more productive than isolated work, or if we were unable to discern the benefits of cooperation, then we would remain isolated and atomistic. But worse than that, as Ludwig von Mises explained, “Each man would have been forced to view all other men as his enemies; his craving for the satisfaction of his own appetites would have brought him into an implacable conflict with all his neighbors.” Without the possibility of mutual benefit from cooperation and the division of labor, neither feelings of sympathy and friendship nor the market order itself could arise.

Throughout the market system individuals and firms compete to cooperate better. General Motors and Toyota compete to cooperate with me in achieving my goal of transportation. AT&T and MCI compete to cooperate with me in achieving my goal of communication with others. Indeed, they compete so aggressively for my business that I have cooperated with yet another communications firm that provides me with peace of mind via an answering machine.

Critics of markets often complain that capitalism encourages and rewards self-interest. In fact, people are self-interested under any political system. Markets channel their self-interest in socially beneficent directions. In a free market, people achieve their own purposes by finding out what others want and trying to offer it. That may mean several people working together to build a fishing net or a road. In a more complex economy, it means seeking one’s own profit by offering goods or services that satisfy the needs or desires of others. Workers and entrepreneurs who best satisfy those needs will be rewarded; those who don’t will soon find out and be encouraged to copy their more successful competitors or try a new approach.

All the different economic organizations we see in a market are experiments to find better ways of cooperating to achieve mutual purposes. A system of property rights, the rule of law, and minimal government allow maximum scope for people to experiment with new forms of cooperation. The development of the corporation allowed larger economic tasks to be undertaken than individuals or partnerships could achieve. Organizations such as condominium associations, mutual funds, insurance companies, banks, worker-owned cooperatives, and more are attempts to solve particular economic problems by new forms of association. Some of these forms are discovered to be inefficient; many of the corporate conglomerates in the 1960s, for instance, proved to be unmanageable, and shareholders lost money. The rapid feedback of the market process provides incentives for successful forms of organization to be copied and unsuccessful forms to be discouraged.

Cooperation is as much a part of capitalism as competition. Both are essential elements of the simple system of natural liberty, and most of us spend far more of our time cooperating with partners, coworkers, suppliers, and customers than we do competing.

Life would indeed be nasty, brutish, and short if it were solitary. Fortunately for all of us, in capitalist society it isn’t.

Military Reunion 4

2011-10-28T20:08:00.000-07:00

A Giant Walked Among Us

2011-10-28T08:30:00.000-07:00

Our kids have been watching the first episodes of Mr. Rogers' Neighborhood and it brought back a lot of memories of watching that dear man share his love for hundreds of thousands of kids. We found his acceptance speech for his Lifetime Achievement Award at the 1997 Emmys. What a gentle giant.

This Cop Needs to Be Fired and Charged

2011-10-27T13:58:00.000-07:00

Listen, I can't figure out any kind of coherent goal from the Occupy people and I'm not sure if I would agree with their goals, but I DEFINITELY don't agree the actions of this cop. He should be brought up on charges.

Military Reunion 3

2011-10-26T19:48:00.000-07:00

Washington DC Passes San Jose As Wealthiest Region

2011-10-26T09:00:00.000-07:00

This ought to scare the crud out of you if you love this country.

Knowledge Is Power, France Is Bacon

2011-10-25T20:58:00.000-07:00

My wife and I were laughing out loud when we read this.