Economic Liberty


Over at Mark Perry’s excellent Carpe Diem blog, Mark has an ongoing series about “markets in everything.”  As soon as I saw this, I thought of his series.

As you can see from this photo, Hurricane Sandy took out a section of Hwy 12 on North Carolina’s Outer Banks.

There is a bypass across the sand, but it requires a 4×4 vehicle. When we drove through today, there was a thriving trade of locals with 4x4s and trailers ferrying two wheel drive vehicles (sometimes with an entire family still inside) across the half-mile or so of sand. A waitress at a local restaurant told us that the going rate was a surprisingly reasonable $25.

There were orderly queues of cars waiting on the side of the road to be loaded, and the only government presence I could see was an NC DOT pickup truck who was keeping an eye on the condition of the sand road.

Edit:  I sent these pictures to Mark, and Carpe Diem is carrying the story.

The trouble with socialism is that eventually you run out of other people’s money.

— Margaret Thatcher

Another in Britain’s proud science fiction tradition.

Mass migration northwards to new towns in Scotland, Wales and northeast England may be needed to cope with climate change and water shortages in the South East, according to an apocalyptic vision set out by the Government Office for Science.

. . .

The vision is published today in a report entitled Land Use Futures: Making the Most of Land in the 21st Century. John Beddington, the Government’s chief scientific adviser [science fiction writer], who directed the research, said that climate change and the growing population would present Britain with difficult choices about how it used its land.

. . .

The report, compiled by 300 scientists, economists and planners, includes three scenarios to “stimulate thought” and “highlight difficult policy dilemmas that government and other actors may need to consider in the future”.

All the scenarios involve dramatic changes in lifestyles and landscapes in response to climate change. In the most extreme scenario, world leaders hold an emergency summit in 2014 when it becomes clear that the impacts of climate change are going to be far worse and happen much sooner than previously envisaged.

The Government responds by taking control of vast tracts of land and using it to grow wood and crops for biomass power stations. An agricultural productivity Bill requires farmers to increase yields per hectare but most have to sell up because they lack the resources to comply. “The average farm size in the UK increases from 57 hectares to 500 hectares; farms in the East and South East of England increase to 5,000 hectares.”

The report says that satellite images in 2060 would reveal dramatic changes in the countryside. “The landscape is mottled with wind turbines; the patches in the patchwork are bigger; there are more forests and fewer animals; there are fewer vehicles moving along the roads.”

In another scenario, the Government redefines land as a national resource and the rights of landowners are balanced with “society’s rights to public benefits from the services produced by it”. Home ownership falls as people begin to embrace the idea of “stewardship” of shared natural resources.

“People are more interested in leasing or sharing goods and less interested in consumption that threatens sustainability of supply. The UK makes a significant cultural shift away from meeting present desires and towards protecting the needs of future generations.”

The report concludes that failure to manage land in a co-ordinated way could result in severe shortages of resources and “public goods” such as water, wildlife and urban green space.

Professor Beddington said: “Over the next 50 years we cannot manage land in the way we’ve done. We’ve got too many competing issues, so much change going on, and we need to get much smarter about how we manage land as we go on.”

I hope they make a movie.

Oxfordshire 2010

Oxfordshire 2050 -- It is amazing what 40 years can do!

(Via the Englishman)

Brilliant econ-geekiness.

Brought to you by John Papola and George Mason’s Russ Roberts.  If you don’t listen to Roberts’ podcast or read his blog, you should start.

Berlin-WallTwenty years ago today, I sat in front of the TV with my dad, watching the Berlin Wall fall.  It was one of the defining moments of my youth.  He had served in the U.S. Army in West Germany in the early ’70s and had walked along the wall, seeing first hand the division it represented.  That night, we sat watching the events unfold, and both of us had tears rolling down our cheeks.  Seeing my father’s reaction more than anything else impressed on me the enormity of the changes unfolding in Eastern Europe.  I hope we never forget that we defeated a real enemy in that war, not just a philosophical paper tiger.

It took the courage and insight of an entire generation to defeat that evil.  While the war may not have been as obvious, these heroic men and women defeated an evil just as nefarious as the Naziism defeated a generation earlier.

It is a tribute to Reagan’s moral and strategic determination, as it was to everyone else who played their part in bringing down the Wall, that they could see through the sophistries of Soviet propagandists, their Western fellow travelers, and the legions of moral equivocators and diplomatic finessers and simply look at the Wall.

Why the Berlin Wall Fell, WSJ.com (Nov. 9, 2009)

My children likely will not understand.  It will be just so much ancient history—like Vietnam, WWII, the British Empire, Rome and the Pharaohs.  Already the memory is fading.  But, in case anyone needs reminding, communism is not merely an alternative political lifestyle, it is evil.

Considering the enormity of what it commemorates, the Memorial to the Victims of Communism, dedicated by President Bush yesterday, is striking for its modest proportions: a 10-foot female figure raising a torch at a busy intersection in Washington, D.C. That’s a fitting rebuke to an ideology that made a fetish of statuary, and murder, on a monumental scale.

The numbers are almost beyond reckoning. Mao Zedong was responsible for 70 million peacetime murders, according to his biographer Jung Chang. The middle estimate of Stalin’s victims is 40 millionPol Pot slaughtered nearly three million fellow Cambodians in only four years. Ethiopia’s Mengistu killed some 1.5 million opponents in the late 1970s, and contributed to the death by starvation of a million others in the 1980s.

Throughout these and other horrors, Communists always managed to find high-profile apologists among the bourgeois intellectuals: Jean-Paul Sartre for Stalin, Noam Chomsky for Pol Pot, and so on. Some, like Sidney Hook, Arthur Koestler and Whittaker Chambers, repented, but most did not. They may not have been witting accomplices to the butchery, quite. But they are the reason why the West was almost fatally late in recognizing the depth of evil it faced in its communist enemy.

Not by coincidence, yesterday’s dedication took place on the 20th anniversary of Ronald Reagan’s speech at Berlin’s Brandenburg Gate, calling on the Soviets to “tear down this wall.” Back then, the smart set (and some of his own advisers) said he was a fool for seeking to bring the communist nightmare to an end. Inasmuch as he led the free world in doing so, the memorial is also, inescapably, a tribute to him.

— On the dedication of the Memorial to the Victims of Communism, Wall Street journal – June 13, 2007.

It beggars belief.

It’s crazy for a group of mere mortals to try to design 15 percent of the U.S. economy. It’s even crazier to do it by August.

Yet that is what some members of Congress presume to do. They intend, as the New York Times puts it, “to reinvent the nation’s health care system”.

(HT Jeremy)

George Newman has a good review of the often inconsistent arguments being put forward in favor of health care “reform.”

I was glad to see him address the “health care represents a rising proportion of our income” issue. 

That’s not only true but perfectly natural.  Quality health care is a discretionary, income-elastic expense — i.e. the richer a society, the larger proportion of income that is spent on it.  (Poor societies have to spend income gains on food and other necessities.)  Consider the alternatives.  Would we feel better about ourselves if we skimped on our family’s health care and spend the money on liquor, gambling, night clubs or a third television set?

When discussing this issue, I regularly ask people if they would rather have today’s healthcare at today’s prices or 1950’s healthcare at 1950’s prices.  No one has ever chosen the 1950s option.  (People would prefer to have today’s healthcare at 1950’s prices, and I too wish that Santa Claus was real.)

Newman, Parsing the Health Reform Arguments

(HT Andrew B.)

. . . and doesn’t plan to get out of the business any time soon.

I have to admit that this scares the Hell out of me.  From the Wall Street Journal Opinion Journal:

Here’s a true story first reported by my Fox News colleague Andrew Napolitano (with the names and some details obscured to prevent retaliation). Under the Bush team a prominent and profitable bank, under threat of a damaging public audit, was forced to accept less than $1 billion of TARP money. The government insisted on buying a new class of preferred stock which gave it a tiny, minority position. The money flowed to the bank. Arguably, back then, the Bush administration was acting for purely economic reasons. It wanted to recapitalize the banks to halt a financial panic.

Fast forward to today, and that same bank is begging to give the money back. The chairman offers to write a check, now, with interest. He’s been sitting on the cash for months and has felt the dead hand of government threatening to run his business and dictate pay scales. He sees the writing on the wall and he wants out. But the Obama team says no, since unlike the smaller banks that gave their TARP money back, this bank is far more prominent. The bank has also been threatened with “adverse” consequences if its chairman persists. That’s politics talking, not economics.

Think about it: If Rick Wagoner can be fired and compact cars can be mandated, why can’t a bank with a vault full of TARP money be told where to lend? And since politics drives this administration, why can’t special loans and terms be offered to favored constituents, favored industries, or even favored regions? Our prosperity has never been based on the political allocation of credit — until now.

Which brings me to the Pay for Performance Act, just passed by the House. This is an outstanding example of class warfare. I’m an Englishman. We invented class warfare, and I know it when I see it. This legislation allows the administration to dictate pay for anyone working in any company that takes a dime of TARP money. This is a whip with which to thrash the unpopular bankers, a tool to advance the Obama administration’s goal of controlling the financial system.

I think I have a basic understanding of public choice theory, and how special interests can use political power to extort money from the rest of us.  However, I cannot understand the tremendous political power of the agricultural lobby, especially the corn growers.  Only 2-3% of the American workforce is directly employed in agriculture, and I’m sure the corn growers are only a fraction of that small percentage.  And yet, the industry continues to receive massive subsidies in the face of opposition by groups as diverse as the Alliance of Automobile Manufacturers, the Motorcycle Industry Council and the Outdoor Power Equipment Institute, the American Lung Association, the Union of Concerned Scientists, the Natural Resources Defense Council, and the Sierra Club.

Everyone Hates Ethanol, The Wall Street Journal Opinion Journal (Mar. 16, 2009).

Americans are unlikely to use enough gas next year to absorb the 13 billion gallons of ethanol that Congress mandated, because current regulations limit the ethanol content in each gallon of gas at 10%. The industry is asking that this cap be lifted to 15% or even 20%. That way, more ethanol can be mixed with less gas, and producers won’t end up with a glut that the government does not require anyone to buy.

The ethanol boosters aren’t troubled that only a fraction of the 240 million cars and trucks on the road today can run with ethanol blends higher than 10%. It can damage engines and corrode automotive pipes, as well as impair some safety features, especially in older vehicles. It can also overwhelm pollution control systems like catalytic converters. The malfunctions multiply in other products that use gas, such as boats, snowmobiles, lawnmowers, chainsaws, etc.

That possible policy train wreck is uniting almost every other Washington lobby — and talk about strange bedfellows. The Alliance of Automobile Manufacturers, the Motorcycle Industry Council and the Outdoor Power Equipment Institute, among others, are opposed, since raising the blend limit will ruin their products. The left-leaning American Lung Association and the Union of Concerned Scientists are opposed too, since it will increase auto emissions. The Natural Resources Defense Council and the Sierra Club agree, on top of growing scientific evidence that corn ethanol provides little or no net reduction in CO2 over the gasoline it displaces.

(HT Carpe Diem)

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