flinthills

June Arunga

I was fortunate to have a truly brilliant evening spent at the IEA on Lord North Street in Westminster, London. It was meant to be the viewing of "The Devil's Footpath" - the story of June Arunga's 5000-mile, six-week journey across the length of Africa from Cairo to Cape Town.

Luckily there were technical difficulties and we were treated to more than an hour of listening to Ms. Arunga talk. The quote of the evening - "Why can't people be left alone to do what they want to do?" To type it out here in the dullness of black and white, strips the emotion with which that simple, universal plea was delivered. It was heart-rending.

She's a 22 year old Kenyan studying law and economics in England, travelling the world talking about the importance of liberty, free markets, property rights, the rule of law and the role these ideas could play in allowing Africans of all kinds to pull themselves up by their own bootstraps. She is passionate, intelligent and articulate; she has the potential for rocking the African world and maybe even ours - she will at least alter forever your pre-conceptions about Africa.

After the talk I was able to have dinner with her at Quirinale, an incredible Italian restaurant just a few doors down from the IEA in Westminster on Great Peter St. We were joined by Seamus (one of the brilliant interns at the IEA) and Martin (a Ph.D. candidate studying War and market modelling). The food and service were incredible, the conversation captivating -- covering everything from patronage systems in the mid-west of the US versus those in Kenya all the way to gay marriages on to the economic analysis of AIDS' impact on the social behavior of Kenyan women.

I only wished my girls could have been there to witness it - and can only hope that someday they will meet June.

As usual all of this was arranged by John Blundell, the gentle, generous, unbelievably kind genius who directs the IEA. I cannot possibly thank him enough for the experience he crafted last night. I can only hope to emulate his example for someone else.

Government qua Baseball Bat

To paraphrase George Washington, government is not parenting, caring, kindness or eloquence -- it is force. Anyone doubting that can find a great example in Paul Jacob's March 12th piece in Common Sense. Government is frequently used as bat in the hands of one group to beat another into submission.

Here's the meat of it:

"when the 17-year-old Tempe resident first helped his grandparents with their rat problem, he had no idea he was embarking on a career in crime. He simply saw a problem, found a simple solution, and fixed it.
News quickly spread and soon Christian had many customers willing to pay him $30 to prevent rats from infesting their homes.

The solution was simple. Take some wire mesh. Cut it to size and nail it over vents and other rat-sized holes on and under houses. That's it.

But it turns out that some pest control companies supply that same service for hundreds of dollars a pop. So as soon as the first story hit print, Christian's competition called the Arizona Structural Pest Control Commission. No customer complained. Like most such laws, the regulations are really there to protect businesses, not customers."

Here we have the political economy vs. the free market approach in clear distinction. Why compete on service and price when you can coerce through force? You see this behavior in all forms of government - local, county, state, federal, international, even in places like faculty boards in Universities, planning commissions, education boards, home owner associations, etc. As Paul says, when you've seen enough of this you start to think muggers and theives are preferable -- at least they don't misrepresent their intentions.

To the list of Franklin's, "those who would sacrifice freedom for safety deserve neither," add the name of New York Times opinion editor Nicholas Kristof, who supports book banning, national ID cards, etc... Article is here. You gotta love someone who throws in lines like, "Sure I cherish the First Amendment. But..."

Wow.

Public Funding Generally a Bad Idea

From the blogsite Catallarchy, there's a good post on public transportation with the following punchline:

"These two cases [Atlanta and Chicago] indicate something very important for city planners. First, if a city demands mass transit, private enterprise will supply it. Second, if a city does not demand mass transit, building it anyway (publicly, since private enterprise does not supply what is not demanded) will result in a system so poor that few people will want to ride it and that can only survive on continuous 11-th hour rescues with tax dollars. Either way, we will get from point A to point B without you."

I've had similar thoughts about Wichita public projects like the Hyatt, the Waterwalk, and the subsidizing of flights out of our airport... Take the waterwalk example -- if private money isn't willing to invest / risk on its own without help, handouts and assurances from the government... what does that tell you about the profitability / probability of success of the project?

Inequality is not the problem...

The Economist has a great article on globalization and poverty (click here to view - although you may need an online subscription).

One of the quotes:

"Surely there is no more commanding moral imperative for people in the West than to urge each other, and their governments, to bring relief to the world's poorest. And what a tragedy it is, therefore, that many of the kind souls who respond most eagerly to this imperative bring to the issue an analytical mindset that is almost wholly counterproductive. They are quite right, these champions of the world's poor, that poverty in an age of plenty is shameful and disgusting. But they are quite wrong to suppose, as so many of them do, that the rich enjoy their privileges at the expense of the poor—that poverty, in other words, is inseparable from a system, capitalism, that thrives on injustice. This way of thinking is not just false. It entrenches the very problem it purports to address."

The preoccupation with global inequality, it seems, stems from the absurd reasoning that if we in the west weren't so rich - so driven by material needs and greedy for resources - then the problem of poverty would be at least half-solved already. This is the thinking of economic equality and zero-sum-games common among the critics of globalization and free trade.

Anyone who relishes individual freedom should be highly skeptical of any claim for economic equality. As Larry Reid put it in his address to Flint Hills supporters in a previous Founding Fathers lecture: "Free people are not equal and equal people are not free." Show me a country with economic equality and I will show you a totalitarian regime ruled by the gun. Pol Pot comes to mind.

The idea that there is one lump some of money in the world and that economic wealth is a zero-sum proposition is just plain wrong. Market economics doesn't work that way. See Bastiat, Friedman, De Long, etc., etc. It is capitalism and freedom that will help poor countries (just like economic liberalism is greatly increasing wealth in China and India).

Economic inequality is not the problem -- that is a natural consequence of different preferences, circumstances, values, etc. You could give everyone in the world $100,000 tonight and by tomorrow morning there will be differences in the account balances. The problem is in thinking that the problem is capitalism, when set of ideas called capitalism (rule by law, free markets, etc.) are the organizing principles that will guide communities and entire countries towards increased wealth.

Do you want to play Survivor? All the time??

As noted by Virginia Postrel on her blog, "Companies, like individuals, specialize at what they do best, their partners do the same, and the result is an increase in economic value all around. Self-sufficiency--for individuals, nations, or companies--sounds like a romantic ideal, but it's really a prescription for mediocrity and hardship."

This "vertical disintegration" - also known as "outsourcing" - happens everywhere. Think about it on the personal level... Most of us outsource our processes for producing food, clothing, and shelter -- we don't build our own homes, make our own clothes, or hunt and gather all day for our food... Imagine a world where you had to do all that yourself. The TV show "Survivor" is fun to watch - but it's not a lifestyle I'd care to live. I'll get my 1hr a week of nostalgic romanticism for the "good old days" of troglodytia and primitive living, turn off the TV and turn on the espresso machine and settle down in my leather chair with a good story by Hugo in French by lamplight in warmth and no clue as to what I'll have for dinner tomorrow night... I'll figure it out when I'm hungry.

Is it that hard to extend the concept to businesses? Industries?

Quote of the day...

Mike Tanner had a good piece in Investor's Business Daily on Friday, March 5th on the pressing case for Social Security reform and the fact that politicians won't talk about it:

"Chairman Greenspan has shown us that the emperor has no clothes. The politicians need to do more than avert their eyes."

What Do You Mean...

It's important to define your terms before you decide to debate a topic... so let me offer the following definition of Capitalism (using the words of George Reisman from his '96 text Capitalism: A Treatise on Economics):

Capitalism is a social system based on private ownership of the means of production. It is characterized by the pursuit of material self-interest under freedom and it rests on a foundation of the cultural influence of reason. Based on its foundations and essential nature, capitalism is further characterized by saving and capital accumulation, exchange and money, financial self-interest and the profit motive, the freedoms of economic competition and economic inequality, the price system, economic progress, and a harmony of the material self interests of all the individuals who participate in it.

Freedom is normally defined as the abscence of the initiation of physical force. Free markets, basically synonymous with Capitalism, are social systems based on the voluntary exchange of property rights.

There's a lot of "stuff" to decipher in that definition -- but that's partly my point. So when someone claims to have a problem with Capitalism, you might ask them what specifically they have a problem with: private ownership of the means of production? Material self-interest? Economic inequality and competition? Etc.

I've come to learn from people like Martin Eby and George Pearson, among others, that the main joy and purpose of conversation and debate over an issue is self-edification. It's not about winning or changing someone else's mind (which, by the way, you won't ever do). It's about learning. So define your terms and gain clarity and insight through conversation with others as you do so.

What Stops Them?

Here's a quote to consider from Rose Wilder Lane, the woman who penned the Little House books:

... [T]he Constitutional law ... divides, restricts, limits and weakens political-police power, and thus protects every citizen's personal freedom, his human rights, his exercise of those rights in a free, productive capitalist economy and a free society ... ... [N]othing whatever but the constitutional law, the political structure, of these United States protects any American from arbitrary seizure of his property and his person, from the Gestapo and the Storm Troops, from the concentration camp, the torture chamber, the revolver at the back of his neck in a cellar..

At the Cato Benefactor's Summit this past week in Del Mar, California, I listened to Randy Barnett and Judge Napolitano talk about the successful assault that has been made by our government on the Constitution to effectively render it useless in protecting us as individuals from an over-zealous police-state.

Think of it -- American Citizens can now be thrown in jail (and dissappear off the face of the planet for all we know) without any justification at all if they are declared to be enemy combatants. No reason why must be supplied, no habeas corpus, zip. Gone.

Now, read the quote above again...