Archive for Economics
Dave Killion — May 11, 2013
The Christian Science Monitor reports that foes of the Keystone Pipeline claim that a recent oil spill bolsters their opposition -
“The rupture of an ExxonMobil pipeline that sent a gooey black stream of heavy Canadian crude oozing across lawns and driveways in suburban Mayflower, Ark., (on March 29) has been seized upon by opponents of the Keystone XL pipeline as proof that the controversial project should be halted.
The break in the more-than-60-year-old Pegasus pipeline, environmentalists and homeowners say, illustrates the inability of oil pipeline companies to prevent spills that can wreak havoc on local environments, including important water aquifers along the 1,700 mile Keystone XL’s projected route. An Obama administration ruling on the pipeline is expected sometime this summer.”
If someone protests the construction of new oil pipelines, and insists that oil companies rely on pipelines that are getting older and older, which would you say that that person wants: fewer spills or more spills? And regardless what that person wants, what do you think they’ll get?
Dave Killion — May 5, 2013
O, pardon me, thou bleeding piece of earth, That I am meek and gentle with these butchers!(275) “Julius Caesar”
It is possible, I suppose, to be a libertarian and yet not think rhinos are awesome, but you wouldn’t be the kind of libertarian I could be friends with. But if you love rhinos ( as all good libertarians do), you will be broken- hearted to hear that the last known rhinos in Mozambique have been killed by poachers -
“The 15 threatened animals were shot dead for their horns last month in the Mozambican part of Great Limpopo Transfrontier Park, which also covers South Africa and Zimbabwe.
They were thought to be the last of an estimated 300 that roamed through the special conservation area when it was established as “the world’s greatest animal kingdom” in a treaty signed by the three countries’ then presidents in 2002.”
And now they’re all gone. Had those rhinos been privately owned, one of them could have been sold to a trophy hunter, and the money used by self-interested businessmen to protect and breed the remainder. Mozambique could have had more rhinos, but instead, they have none. The prohibitionists had their way, and 15 rhinos have been slaughtered to the benefit of poachers, who will likely spend a fair bit on prostitutes, booze, and drugs, and nothing on conservation. Such a waste.
Dave Killion — May 4, 2013
The Victoria Libertarian Book Club has set aside books for awhile, in favour of discussion of pre-selected topics. We’ve had a look at corporate personhood, and technology and liberty, and drones. We’re going to have a movie night in a couple weeks, but if you (like me) enjoy having a book on the go, let me recommend to you the graphic novel ”How an Economy Grows and Why It Doesn’t”. Here’s a sample page -
True fact: author Irwin Schiff (85) is the father of well-known-to-libertarians Peter Schiff, and is also a noted tax protester. Sad to say, he is currently serving a 13-year sentence for ”tax crimes,” and not due for release for another 3-4 years.
Read this work online here, or download a PDF here.
Dave Killion — April 10, 2013
Here’s a letter to the Calgary Herald -
Your article concerning the determination of Canadian cattle and hog producers to fight against new U.S. regulations for labelling meat (March 12) fails to note that this is a battle not only on behalf of Canadians, but also for American consumers and American workers whose occupations benefit from lower-priced Canadian meat products. Indeed, aside from a few U.S. politicians and the special interests that support them, it is a battle on behalf of all Americans.
It’s true that some of the least competitive U.S. cattle and hog producers will lose business, and some may even have to close down and lay off their employees. But in Canada, every resource that goes into producing meat is a resource that can’t be used to grow cotton or oranges, build wooden boats or furniture, or cater to Canadian tourists traveling abroad. Likely, Canada will turn to the U.S. for help in acquiring these goods and services, and the market will quickly find mutually profitable use for all the resources recently freed from U.S. meat production. Consumers on both sides of the border will benefit from less-expensive goods and services. This is the nature of trade; that the elimination of any barrier is not a zero-sum game, but rather, a win-win proposition.
Dave Killion — March 31, 2013
If the federal government approves a licence application to open three clinics, willing Canadians may soon be able to make up to $40 a week by selling plasma to Canadian Plasma Resources. Self-interested parties eager to keep market competition out of health care are not supportive -
“The chair of Canadian Doctors for Medicare said she was shocked by the news that a company in Ontario was planning to pay for plasma.
“The critical issue here is opening up our blood services sector to for-profit companies who have an interest in providing a profit to their shareholders that at times could conflict with the imperative to maintain high quality health standards for Canadians,” Dr. Danielle Martin said in an interview Wednesday at Women’s College Hospital, where she is a family physician.”
Given that about 20,000 Canadians who received tainted blood products from U.S. sources contracted HIV and Hepatitis C, and that those U.S. sources paid for donations, one might think Dr. Martin has a point. One would be mistaken. Although the Canadian system was extensively revamped after the Krever Commission, market forces had already put key players (such as Health Management Associates) out of business. Furthermore, Canada has continued to use products from for-profit companies, to no ill effect -
“…officials distinguish between two uses of plasma. Plasma used for transfusions is always donated as part of an extensive screening and testing system.
Plasma can also processed and purified into therapeutic products using technology that inactivates viruses. For this stream, Canada uses products made from U.S. paid donor plasma.”
In a world where a free market in organ donations is desperately needed, it is depressing that there is even a debate concerning for-profit blood donation. It is doubly depressing that so much of the opposition comes from the medical community, which is bound, by oath, to do no harm. Cross your fingers, and hope the feds do the right thing here.
Dave Killion — February 17, 2013
Already challenged by human overpopulation, black-market wildlife trading, global warming, and habitat loss, the Slow Loris makes matters worse for itself… by being too darned cute -
“According to the study, wildlife photographers in Thiruvananthapuram – the capital city of Kerala- pay Rs. 500 to 1500 to the indigenous Kani tribes in the areas to capture Slender Lorises and arrange photo shoots. The practice occurs despite the fact that the animal is protected under Schedule I of The Indian Wildlife (Protection) Act, 1972.
Apart from capturing and keeping it, the Lorises are often tightly held on short branches and prodded so that it won’t move during a photo shoot; to help the ‘professional wildlife photographer’ get enough good pictures. Moreover, the poor animal will be illuminated with torches aimed at it, says the study. It is a known fact that aiming strong light sources like torches and camera flashes at Slender Lorises for longer, will be irritating to the animal since it has very sensitive, large eyes to help their nocturnal life.
The study team has also noted that the animal captured for such photo shoots are not returned to the place from (which) it was collected.”
Sounds rough. But consider the Yorkshire Terrier.
Survival Of The Fittest
Unlike the Slow Loris, there is no habitat in which Yorkies can survive unassisted, under any circumstances. Yet not only does cuteness fail to handicap the Yorkie as it allegedly does the Slow Loris, it is, in fact, a Yorky’s chief asset. Indeed, without cuteness, the Yorkshire Terrier would not exist at all. What explains the difference? It is this – because there is a largely free market for Yorkies, breeders can produce as many of them as the world desires, with no fear of criminal penalty, but the only way to acquire a Slow Loris is to have it stolen from the wild. The former practice increases and sustains a population, while the latter diminishes it. All in all, a pretty good example of how regulation turns assets into liabilities.
Hat tip: The dependably ridiculous Boingboing
Dave Killion — February 10, 2013
The Canadian Senate spent over a year hearing from 53 ‘experts’ (special interests?) before producing a report on price differences between the U.S. and Canada. The results fail to impress -
“Bruce Cran, president of the Consumers Association of Canada, roasted the report.
“Consumers are generally disappointed with the report,” said Cran, who’s based in B.C. “There’s no real remedies and there’s no new knowledge there.”
Hey Senators! Here’s a remedy for you: except for enforcing prohibitions against the use of force and fraud, the government should remove itself from every aspect of trade.
As to the report containing no new knowledge, I defer to Mr. Cran’s superior awareness. However, I have to confess that there was an item of which I have been unaware. You see, I have always thought tariffs were in place to protect domestic producers. But in some instances, that is no longer the case -
“The senators noted hockey equipment as one area where it doesn’t make sense to have tariffs, including an 18 per cent mark-up on hockey pants imported from China. Americans face only a tariff of 2.9 per cent”….”Maybe we were trying to protect a Canadian manufacturer years ago, but they’re all coming from outside now” ….”The senators said they don’t believe any Canadian company still makes hockey pants.”
Well, isn’t that interesting. All this time, one of my arguments against tariffs has been that they may protect domestic industries, but they do so at the expense of domestic consumers. But now we have evidence that, at least in some cases, they do not even protect domestic industries. Which means they are simply another means of fleecing consumers. I guess I’ll have to add that little tidbit to the intellectual pantry.
The good news is that a tariff review is under way, and it may turn out that consumers will be permitted to retain a little more of their hides. Won’t that be nice.
Dave Killion — February 5, 2013
The Frontier Centre for Public Policy brings to our attention a recent Wall Street Journal article concerning state income taxes in the U.S., and the governors who are looking to eliminate them -
“Washington may be a tax reform wasteland, but out in the states the action is hot and heavy. Nine states—including such fast-growing places as Florida, Tennessee and Texas—currently have no income tax, and the race is on to see which will be the tenth, and perhaps the 11th and 12th.”….”Income taxes generally do more economic harm (than sales taxes) because they are a direct penalty on saving, investment and labor that create new wealth. Sales taxes, by contrast, hit consumption, which is the result of that wealth creation. Governors Jindal, McCrory and Heineman cite the growing evidence that states with low or no income taxes have done better economically in recent decades compared to states with income-tax rates of 10% or more.”
Replacing lost income tax revenue with sales tax revenue is frowned on in some circles as regressive, since families who don’t currently pay income taxes will become subject to sales taxes. There are ways to correct this, such as declining to tax certain items such as food and clothing, or issuing tax rebates. But the optimal solution? Cut spending. Government is too big, does too much, and does it all poorly. Roll it back, and enjoy your increased prosperity.
The benefits of eliminating the income tax are well-established. The only questions are these: why is there NO Canadian province or territory without an income tax, and why is there no one in Canada campaigning for repeal? I wish I knew. But if the Free Province Project gets some legs, don’t be surprised if this is one of the first issues they take on.
Dave Killion — February 3, 2013
“There is no such thing as unregulated businesses. They are either regulated ineffectively by the state, or they are regulated effectively by the market.”
It is widely held that in the absence of state regulation, business could get away with endangering it’s customers and employees, selling shoddy goods, and destroying the environment. Market forces do not permit any of that to happen to any significant degree.
Antony — December 13, 2012
Book Review: Time Will Run Back, by Henry Hazlitt
Henry Hazlitt’s novel Time Will Run Back explores the subjects of capitalism and free society from first principles, by looking at them from the naive perspective of a world in which they are unknown concepts.
The novel is set about 100 years in the future, in a world in which the Soviets won the cold war. The entire world is run as a communist dictatorship with a centrally planned economy. Through a series of chance events, a young man named Peter comes to lead the nation. Peter, unlike everyone else in the society, has been raised without being indoctrinated into the communist ideology, and thus is able to approach the problems he faces as leader without any preconceptions.
The novel describes how Peter tries various methods of organizing the production and distribution of goods in society. In trying to solve his immediate problems, he keeps running into new problems as unintended consequences of his different economic interventions. These problems include both calculation problems, where the central planners are unable to obtain the information necessary to properly allocate resources, and motivation problems where the workers have no incentive to be productive. Through a series of trial and error steps, Peter comes to discover that a system of private property ownership with free exchange is the only way to properly organize an economy.
Although the book does an excellent job in its treatment of economic principles, it overreaches a bit when Peter goes on to sort out the political setup of the country. He basically ends up re-creating a democratic republic similar to the United States, but the reasoning for for this setup is not convincing. It seems contrived, and influenced by the author’s preconceptions, in contrast to the parts dealing with economic reform, in which the reasoning was logical, and various pitfalls with non-free market arrangements were well explained.
Overall, this book is well worth reading. The premise of a person naively trying to solve economic problems is an excellent thought experiment to explain the pitfalls of various forms of central economic planning. The novel was apparently inspired by Hazlitt’s reading of Socialism by Ludwig von Mises, and it does a good job of outlining the socialist calculation problem in a fun and accessible manner.