Tag Archives: state

Employment

Just guess what I’m responding to…

Only a free market can create commercially viable job scenes in society. They are jobs based on economic demands, not the ideology of a politician or a bureaucrat. If you are structurally or frictionally unemployed and wish to change your situation, you can go to school to acquire the necessary skills to fit the jobs that are present. The government must not waste money allocated from the private sector on welfare, unemployment benefits, and false hopes in the form of Keynesian economics.

I would also argue that cyclical unemployment is in fact not a problem at all. There can never be an exact number of jobs to fit the labor force, and to try to employ everyone in a presumably dynamic economy is a fools errand. Cyclical and structural unemployment are not completely exclusive either, as a contraction of the economy may indicate shifts in the various job markets, and even sociological shifts.

On a side note: The printing and spending of money by the government in order to increase inflation and lower unemployment is valid if you take for granted the premise that the relationship between inflation and employment is based on currency supply only; a premise I am skeptical of.

Lastly, calling the classical view of unemployment only an assessment of a person’s willingness to lower their wage expectations is a one sided/close minded assertion, as employment and wages constitute a complicated question of efficiency, and the relationship between labor hours and wage benefits.

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The Race to the Nanny State – Part 1

Here’s a story right out of my own metro area newspaper. I don’t know if this hatred of trans fats has been on the table before in the Twin Cities, but the outlook is that this will be a relatively swift decision.

This is a perfect example of a step in the wrong direction. Let’s imagine for a second that trans fats are in fact as dangerous as some would make them out to be for everyone in these cities. There may be many truthful arguments to this cause. But take a step back, and look at what is happening. The article mentions that certain national restaurant chains have already eliminated trans fats from their menus. These are companies making rational business decisions. Concordantly, all companies that have not eliminated trans fats from their menus are also making a rational business decision, for any number of reasons.

The problem with governments getting involved in the food industries (and pretty much any other industry, e.g. energy, auto, food, and housing industries) is that you are no longer allowing companies to make decisions based on voluntary consumer actions, but instead compelling them to work under unprofitable conditions. Of course the advancers of the nanny state, almost always being liberals, always find some way limit freedom and enterprise in the name of health, safety, or the environment. Also, almost all provisions associated with nanny states are in conflict with the progression of natural selection. So I say, “Let the fatties eat, smokers smoke, bungee jumpers jump, and SUV drivers drive”. In the end, the market will sort out all inefficiencies, and natural selection will remove the weak from society.

On Gay Marriage

When people raise issues of gay rights, most commonly they are pondering or pontificating about how our government should address homosexual couples who wish to be married. Since that question concedes the underlying premise, however, that the government should be involved with marriage in any capacity, we invariably resign ourselves to the wrong side of the issue.

I used to think that the problem of gay rights in the United States today was largely one of semantics. I used to think that homosexuals should have the ability to obtain government-sanctioned unions, as should everyone else, and that those unions should impart equal legal privileges upon all who hold them. I used to think that a “separate but equal”-style system, in which the institution of marriage could be preserved in its traditional state, would satisfy all parties involved. However, after pondering the evolving political climate surrounding this issue, I can no longer hold that view. It is quite clear that granting separate civil unions to homosexual couples will never bring about the kind of equality we desire, simply because marriage has intrinsic spiritual meanings which a mere civil union can never entail.

The solution pushed by the gay marriage lobby is simply to add another facet to the legal definition of marriage. This would allow homosexual couples to enjoy all the legal benefits of marriage, and it would allow them to enjoy all of marriage’s spiritual connotations.
Unfortunately, this solution doesn’t address the fundamental problem: a lack of equality. It simply adds another group of people to be graced by government. It doesn’t end the “legislation of morals” which so many leftists decry. It simply substitutes the legislation of one group’s morals for another.

We have to remember that rights are inherent to individuals, not to groups. Groups are social constructs, superimposed upon individuals. In ensuring rights for all individuals, the solution proposed by the gay marriage lobby falls short. Their solution only creates and expands privileges for groups. It is a quick, politically expedient, but inevitably flawed solution.

Re-examination of the fundamental problem reveals not an unfair distribution of privileges, but a complete disregard for any separation of church and state. The sanction of traditional marriage in our legal codes has caused two negative consequences: First, it has produced a legal system which unfairly discriminates against homosexuals. Second, it places the institution of marriage in the precarious position of being subject to public scrutiny, and the further entrenchment of traditional marriage pushed by conservatives through their various state/federal marriage amendments only intensifies the problem. On the other hand, the solution proposed by the gay marriage lobby would, in the eyes of many traditionalists, defile the institution of marriage. Is there not a solution which could satisfy all parties?

Let us consider the extreme logical outcome of the solution put forth by the gay marriage lobby: Even if we overcome the impossible political task of expanding the definition of marriage to include any and every conceivable kind of union between people, we will still have discrimination between those who are married and those who are not. If we expand privileges even further to include both married and non-married people, then we entirely defeat the purpose of having those privileges, and we find ourselves back at square one. In addition to being pointless, a situation in which everyone subsidizes everyone else could be harmless, if not for that fact that money must be skimmed off the top in order to pay the salaries of the bureaucrats administering these programs.

Given this lesson, I think the ideal solution would be to completely remove government from the business of marriage. Abolish all definitions of marriage from legal code, and abolish all privileges enjoyed by married couples. Allow couples to seek any kind of union they choose, from whatever private institution they choose. Leave questions of inheritance, hospital visitation, end-of-life care, etc. for individuals to decide through contracts. Let people be equal through liberty, instead of grasping at an ever elusive equality through privilege and restraint.

If the laws were changed this way, homosexuals could benefit spiritually, and all individuals would be legally equal. It would also insulate the religious community from political scrutiny, and allow heterosexuals to pursue marriages unadulterated by those who hold morals different from their own.

I think many of my fellow conservatives have lost their way on this issue. Reminiscent of leftists, they take the attacks of the other side personally. This is understandable, because traditional marriage, an institution they hold dear, is so ingrained in public life. However, it is nonetheless reprehensible. They allow their spiritual convictions to drive their political convictions. This disregard for individual liberty is the kind of behavior I expect from the left, but to see it come from the right is discomfiting, to say the least. To my conservative friends, I would offer this prescription: if you wish to stop the destruction of traditional marriage, then fight that campaign within the private square, because the continued entrenching of traditional marriage in legal code is an inevitably untenable position. The most constructive action you could take in the public square to save traditional marriage is to join in calling for its complete absence from the law.

As an atheist, I have no vested interest in protecting the institution of traditional marriage. However, I have a deep-seated interest in protecting liberty. I wish we could let that become a uniting factor among both traditional marriage and gay marriage advocates, instead of being driven by divisive emotions.

People should not be ashamed of their sexual orientation, and they should not be subject to institutionalized ostracism or mistreatment because of it. Love is a natural and important aspect of all our lives–far too important to place in the hands of government.

Reflections on Free Markets

In contemporary debates on economics, the main contentions usually involve how much government intervention is necessary in the economy. On one side of the debate are the socialists, advocating complete government intervention in the economy, and on the other side are the proponents of free markets, advocating the opposite. Where we find ourselves on that spectrum should depend on an honest discussion about the basic nature of markets.

First, what is a market? Basically, it is a collection of exchanges between people. Markets are most commonly associated with exchanges of goods and services, but they can also exist within other frameworks (e.g., immigration as an exchange of cultures, and universities as exchanges of ideas). In particular, a free market is characterized by voluntary transactions between people. Conversely, when transactions between people are forced or hindered by outside actors, be they governments or other individuals, the market is not free.

In my experience, most criticisms levied against free markets are based on faulty premises. Now that we have some idea of what a free market is, let us take time to address a few examples of what it isn’t:

Free markets and capitalism are not exactly synonymous.

While “capitalism” does traditionally denote a system in which the means of production are owned privately by individuals, that definition does not necessarily provide real insight into the nature of common market transactions. To capitalize merely means acting advantageously upon a situation or opportunity; it is an expression of the innate human desire to maximize personal success. This occurs as much within socialism as it does a free-market, but the differences lie in the particular mode of capitalization used: Maximizing personal success will look different in a socialist economy than in a free market. Nevertheless, it is false to assume that the differences between economic systems will cause differences in human nature.

A free market is also not the same as pure capitalism because pure capitalism involves individuals using any means necessary to advance themselves, including coercive acts, usually referred to as crimes, which abridge other peoples’ natural rights. A free market is, by definition, devoid of coercion (transactions must be voluntary), and is therefore incompatible with pure capitalism. Socialism, on the other hand, has no appreciation for individual rights, so pure capitalism actually comports more nicely with socialism than with a free market!

The free market is not fascism.

I’m not exactly sure where this association comes from, so it’s really hard for me to understand its rational. Fascism is a political philosophy on the left of the political spectrum. Proponents of fascism are hyper-nationalistic and seek to use a powerful government to promote their desires. Much like the other leftist philosophies, such as communism, feudalism, totalitarianism, or monarchism, fascism rejects individual natural rights, and therefore cannot allow the operation of a free market–of goods and services, cultures, or ideas.

The failure of a firm does not denote the failure of a market.

This is another common misconception about free markets. Contrary to popular belief, the failure of a firm is an example of when free markets works best. If a firm is unfit to compete in a market, it goes out of business and its assets are liquidated. This way, markets work out inefficiencies in the system, and the surviving, successful firms are those better equipped to serve the needs of society. Think of markets as an ecosystem, inherent to which is the natural selection for and against competing firms. By removing the weak from the market, the economy evolves and progresses. When government steps in to regulate or hinder this process is when the free market truly fails. The most prominent modern example of this is the recent Wall St. bank bailout. The massive economic bailout for these banks prevented their failure, allowing non-competitive banks to stay in business, insinuating major economic collapse down the road, and all at the taxpayers’ expense.

Now that we’ve defined our terms, the issue resolves to whether or not free markets are beneficial. The propriety of an economic system in which people are able to voluntarily trade with others would seem self-evident, but there are a couple of pertinent criticisms of true free markets which should be addressed.

Externalities

Externalities are a real problem for markets. Externalities are the costs which buyers and sellers within a private transaction unintentionally pass on to the rest of society (e.g, pollution, or traffic congestion). Most economists would concede that externalities are mitigated by institutionalizing these social costs—that is, reintroducing these costs into the immediate transaction and forcing the transaction’s assenting parties to incur it themselves–not society.

Unfortunately, leftists then naïvely assume that government is the best agent, or is the only agent capable of performing this task. They believe that government should tax or regulate businesses and consumers. This will transform the social cost of producing or using a particular product into a direct economic cost incurred by the buyer or the seller, which will decrease either the supply or the demand for the product, and will in turn decrease the product’s social cost.

There are other mechanisms, however, for institutionalizing social costs that don’t require government intervention in the form of confiscatory taxes or regulations. The first mechanism that comes to mind is market self-regulation: If consumers become knowledgeable about the social costs imposed by their demand for a product, they may decide that the benefit derived from a low price is not worth the cost they impose upon the outside world. Firms which self-institutionalize social costs, such as coal power companies investing in scrubbers, or car companies investing in better crash safety technology, may have an easier time marketing their products to the public, as the public may enjoy moral gratification from supporting these companies. As Milton Friedman explains in the video below, tort law and social customs also counteract and guard against market failures.

Monopolies

This is probably the most common honest criticism of markets. The argument goes like this: Every once in a while a firm becomes so large and its operations become so efficient, that it is able to out-compete virtually every other firm in the market. Take Walmart as an example. Walmart is often cited as undercutting the prices of its competitors, taking a short term loss merely to drive its competitors out of business. As the evolutionary processes of the market remove the weak and inefficient firms from the economy, one could expect, in the long run, that only one firm would remain. Logically, it would follow that, in the absence of competition, it would be in the best interest of the one remaining firm to jack up its prices as much as possible, bleeding the consumers dry.

But looking empirically at the issue, this logic simply hasn’t panned out. There is, again, a mechanism built into free markets that protects against this type of occurrence. If Walmart became a monopoly and decided to raise its prices over night, it would make the profitability of potential new firms wanting to enter the market near infinite. As a result, very few monopolies have ever arisen as a result of pure, market-driven forces, and endured for long periods of time. As Milton Friedman explains, most monopolies have endured only because government has intervened on their behalf.

The only two notable examples Friedman mentions of monopolies which have endured without government intervention–the New York Stock Exchange from Reconstruction to the Great Depression, and the De Beers diamond company from the early twentieth century until 2000–both lost their monopolistic status due to the introduction of international competitors. If we are to prevent the emergence and endurance of private monopolies, we must ensure that government policies do not make prohibitive the cost of market entry for competitors, which is exactly what did not happen in the television, steel, labor, railroad, and trucking markets.

Conclusion

Free markets are a fact of life–they are not implemented, but rather exist by default. Free markets are imperfect, though, because people are imperfect, and no private or public system comprised of people will ever be without flaw. However, a free market is the most efficient economic system ever known to mankind. Even with the presence of externalities and occasional monopolies, free markets succeed in producing the greatest amount of wealth for the greatest number of people. Most importantly, free markets reflect human nature, and the cause to better oneself. They are an expression of individual natural rights, and they yield a net benefit for society as a whole.