NewBrainChild

Mises Institute reports, Can Fiscal Stimulus Revive the Economy?

For instance, a baker produces ten loaves of bread and exchanges them for a pair of shoes with a shoemaker. In this example, the baker funds the purchase of shoes by producing ten loaves of bread.

Note that the bread maintains the shoemaker’s life and well-being. Likewise, the shoemaker has funded the purchase of bread by means of shoes that maintain the baker’s life and well-being.

Now, the baker has decided to build another oven in order to increase the production of bread. In order to implement his plan, the baker hires the services of the oven maker.

He pays the oven maker with some of the bread he is producing. Again, what we have here is a setup where the building of the oven is funded by the production of a final consumer good — bread. If, for whatever reasons, the flow of bread production were disrupted, the baker would not be able to pay the oven maker. As a result, the making of the oven would have to be aborted.

The economy is in abort mode. Architecture is in a record decline, housing starts, manufacturing, energy, and most every industry is under the pressures falling demand. Because trade is failing, socialism is picking up speed. Seems politicians are hell bent to give it one last try at the expense of everything! Luckily, everything socialism stands for and that politicians (save Ron Paul) support fails pretty easily.

There is need to emphasize the truism that a government can spend or invest only what it takes away from its citizens and that its additional spending and investment curtails the citizens’ spending and investment to the full extent of it quantity. 

- Ludwig Von Mises

On property and competition:

There is an important distinction between physical property and intellectual property.

Property is a good thing. Ownership of houses, land, automobiles, potatoes and coffee contributes to our wealth and well-being. Property brings with it rights: you cannot take my property without my permission, but I may, if I wish, sell it to you. This provides incentives to produce, accumulate, and trade. In countries such as Zimbabwe where property can be arbitrarily taken away by government action and theft, there is little reason to produce or acquire valuable property, resulting in widespread poverty and even famine. Without the ability to sell our property, there is little reason to specialize in the production of goods and services, and no mutually beneficial trades are possible.

If property is good for automobiles and potatoes, should it not also be true, as Michael Novak argues, of ideas as well? Intellectual monopoly propagandists such as Novak have found it convenient  to pretend that  there is a connection between “intellectual property” as enshrined in copyright and patent law and property rights in the ordinary sense. Property in the ordinary sense is a good thing – and this is as true of ideas as of automobiles and potatoes.  “Intellectual  property,” however,  is the “right” to monopolize an idea by telling other people how they may, or more often, may not, use it. In all of thriving innovative industries we looked at in the previous chapter, it was the right to buy, sell and improve on copies of ideas, not the prohibition against using them, that lead to innovation and prosperity.

Competition is a good thing. That is why the NBA and the Tour de France are so popular, and why we give our all at the annual interdepartmental basketball game. Competition is not just fun, it is also useful. History, practical experience, common sense and economic theory all agree: economic competition is probably one of the greatest ideas humans ever came up with. When a bunch of people compete to achieve the same goal, great things seem to happen that otherwise would not. Things get done faster, cheaper, and better; new methods for lifting a weight or quenching a thirst are invented; the average guy ends up with more of the stuff he likes at a lower price than before. That is why, in the end, socialism collapsed like a rotten wall: it did not allow its people to compete and, as a result, it not only made their economic life miserable, but strangled their hearts and souls. 

A few enlightened economists, such as George Stigler, have argued that if competition is good for the production of cellular phones and bananas, it should be equally good for the production of ideas and of their copies. We agree with George Stigler: indeed, it is. In this chapter we explain how competition works in the market for ideas, and why it is beneficial. We will try to stick to English and not use the mathematics so favored by economists. The brave and the curious can find all the mathematics they want in the references listed in the final notes. 

We are going to imagine a world similar to that in Switzerland or in the Netherlands in the late 19th century, in which there are no patents and no copyrights. When an economically valuable idea comes to their mind, entrepreneurs can spare themselves an insane race to the patent office, profitably invest the money that would otherwise go to lawyers, and get down to the business of selling to consumers the new thing they just invented. We have amply seen in the previous chapter that, at least for ideas that are now commonly copyrighted, a state of affairs in which copyright is absent does not mean that innovation is a profitless enterprise conducted only by great altruists. In the next chapter we report about patentable ideas and find that the same is true: innovations have flourished and still flourish all around us in competitive industries where patents are either not used or are un-enforceable. Here, we see why this ought to be so even according to economic theory. 

The author of this article describes freedom.

Anarcho-capitalism or free-market anarchism (a form of individualist anarchism) is an anti-state political philosophy that attempts to reconcile anarchism with capitalism. It advocates the elimination of the state, the provision of law enforcement, courts, national defense, and all other security services by voluntarily-funded competitors in a free market rather than through compulsory taxation. It supports the complete deregulation of nonintrusive personal and economic activities and a self-regulated market. 

Anarcho-capitalists argue for a society based in voluntary trade of private property (including money, consumer goods, land, and capital goods) and services in order to maximize individual liberty and prosperity, but also recognize charity and communal arrangements as part of the same voluntary ethic.Though anarcho-capitalists are known for asserting a right to private (individualized/non-public) property, non-state common property can also exist in an anarcho-capitalist society. For them, what is important is that it is acquired and transferred without help or hindrance from the compulsory state. 

Anarcho-capitalist libertarians believe that the only just way to acquire property is through voluntary trade, gift, or labor-based original appropriation, rather than through aggression or fraud. Murray Rothbard coined the term anarcho-capitalism to distinguish it from anarchism that opposes private property.

Anarcho-capitalists see free-market capitalism as the basis for a free society. Rothbard defined free-market capitalism as “peaceful voluntary exchange”, in contrast to “state capitalism” which he defined as a collusive partnership between business and government that uses coercion to subvert the free market. 

“Capitalism,” as anarcho-capitalists employ the term, is not to be confused with state monopoly capitalism, crony capitalism, corporatism, or contemporary mixed economies, wherein natural market incentives and disincentives are skewed by state intervention. So they reject the state, based on the belief that states are aggressive entities which steal property (through taxation and expropriation), initiate aggression, are a compulsory monopoly on the use of defensive and/or punitive force, use their coercive powers to benefit some businesses and individuals at the expense of others, create monopolies, restrict trade, and restrict personal freedoms via drug laws, compulsory education, conscription, laws on food and morality, and the like. 

The embrace of unfettered capitalism leads to considerable tension between anarcho-capitalists and many social anarchists who tend to distrust the market, and believe that free-market capitalism is inherently authoritarian – hence incompatible with Anarchist ideals.

A view on copyrights and patents that addresses the important distinction between physical and intellectual property.

Copyright and patents are not part of the natural competitive order. They are products of positive law and legislation, imposed at the behest of market winners as a means of excluding competition. They are government grants of monopolies, and, as neoclassical economists with a promarket disposition, the authors are against monopoly because it raises prices, generates economic stagnation, inhibits innovation, robs consumers, and rewards special interests.

Mish comments about the death of statism. The game is over for governments and states everywhere.

A better idea would be to fire them all and privatize everything. Of course drug laws should be revised first and anyone in for minor drug violations should simply be released. That would eliminate the need for many of the jobs right off the top.

I am going to face the wrath of unions for those statements but it is no longer possible to pay union salaries and pension benefits balanced on the back of taxpayers. Government wages, benefits, and pensions, simply must be brought in line with that of the private sector. There is no other way out.

Something has to give, so something will give. It’s as simple as that. I am pleased to see Strickland face at least some sense of reality.

Mass privatisation and the post-communist mortality crisis: a cross-national analysis details the mass privatization of health care linking it to a decrease in the mortality rate.

Rapid mass privatisation as an economic transition strategy was a crucial determinant of differences in adult mortality trends in post-communist countries; the effect of privatisation was reduced if social capital was high. These findings might be relevant to other countries in which similar policies are being considered. The policy implications are clear. Great caution should be taken when macroeconomic policies seek radically to overhaul the economy without considering potential effects on the population’s health. As variants of rapid reform policies are being debated in China, India, Egypt, and several other developing and middle-income countries—including Iraq—which are just beginning to privatise their large state-owned sectors, the lessons from the transitions from communism should be kept in mind.