Politicians talk about the uninsured. Special interests argue on behalf of those with pre-existing conditions. But why is no one wondering how doctors are affected by the new law? They’re the ones on the frontlines dealing directly with new patients, as well as the red tape that makes bureaucracies go round.
Politicians proclaim the benefits of small business while on the campaign trail. But when they meet in the seedy halls of Congress, they have no problem doing whatever they can to stifle, regulate, and subdue their progress. Instead of siding with entrepreneurs, these politicians often side with political allies and cronies that helped put them into office.
Just because you’re retired doesn’t mean you have to stop working. Especially now that you have all the time in the world to do what you really want. Entrepreneurs don’t only come out of Silicon Valley. They come from all walks of life, from all different ages. If you’re retired and want to stay active while you relax, then find out the steps you need to take in order to start, manage, and grow your next small business.
Austrian economics does more than tell you what happens when the government disturbs market forces. In the hands of knowledgeable investors and entrepreneurs, it can tell you exactly what to expect from the market. Market behavior depends on how people behave. And how people behave is central to the Austrian perspective.
The U.S. dollar has been the world's reserve currency for almost a century, and already there are signs it may be in decline. But that doesn't mean it's not still valuable. On the contrary... As Chris Mayer explains, there are many reasons the U.S. dollar will remain relevant on the world stage for years to come. Read on...
World War II might have dragged the country out of the Great Depression, but it did so at a great price. Central planning took center stage, and politicans and bureaucrats suddenly knew what was best for America, the economy, and your life. On top of that, they replaced the free market with a new economic system… Creditism.
If you’re good at something should you be penalized so others have a chance at success? Should award winning actors and actresses be barred from future Oscar ceremonies to give other men and women the chance to succeed? Success should always be rewarded and encouraged. But what happens when you have a government that wants to even the playing field and take away the spoils of success. Gregory Bresiger finds out...
Practical people often pooh-pooh fiction reading as a time wasting dalliance, dominated by a Marxist coloring of the world. However, fiction readers were given a scientific reason recently for spending hours absorbing fanciful figments of someone’s imagination.
Argentina is suffering the ravages of government debasement of the currency -- i.e., inflation, the process by which government pays for its ever-increasing debts and bills by simply printing more paper currency. The expanded money supply results in a lower value of everyone’s money, which is reflected in the rising prices of the things that money buys.
When government expansion is allowed to continue unabated or when it casts a heavy regulatory shadow on America’s entrepreneurial spirit, the freedoms that we’ve come to know, and perhaps take for granted, slowly begin to slip away.
Its acceptance is as widespread as its justification is important, for it provides the rationale for the Federal Reserve’s unprecedented monetary expansion since 2008. While critics may dispute the wealth effect’s magnitude, few have challenged its conceptual soundness. Such is the purpose of this article. The wealth effect is but a mantra without merit.
Baron Rothschild, the famous French financier, was once heard to say that he knew of only two men who really understood money -- an obscure clerk in the Bank of France and one of the directors of the Bank of England. “Unfortunately,” he added, “they disagree.”
The new reality of Obamacare’s tax credits has left finance reporters to pen articles warning readers to “take care” when considering a tax credit and providing strategies for how best to “protect yourself.” So what do finance reporters know that the White House doesn’t?
Nihilo ex nihilo fit. Out of nothing, nothing comes. First put forward by ancient Greek philosopher Parmenides in the fifth century B.C., Thomas Aquinas and St. Augustine later used this axiom to prove that the universe needed a “first mover” to get things going. Even if the whole thing began with some kind of “Big Bang” moment, it still needed a banger to bang it. Who? God, of course.
Economic theories don’t lend themselves to laboratory testing, so the work of a national appraisal firm is especially enlightening. A new study lends support to the Austrian business cycle theory, which says that the less government is involved, the faster a market will recover.
What positive steps can we take? The energy that is now expended by well intentioned, freedom-seeking individuals on the destructive course of politics can be turned into powerful steps that will have a positive effect on the future. All are moral, right and just. None require aggressing. Consider the following...
The Affordable Care Act creates a new health insurance marketplace (the exchange). But because of the great uncertainty about what buyers will enter the market and who will buy what product, the law creates three vehicles to reduce insurance company risk.
Politicians and bureaucrats are notorious for manufacturing euphemisms -- clever but deceptive substitutes for what they really mean but don’t want to admit. That’s how the phrase “revenue enhancement” entered the vocabulary. Some of our courageous friends in government couldn’t bring themselves to say “tax hike.”
It’s easy to be negative about the U.S. economy these days. Find a glint of silver, and folks come running to point out all of the dark clouds looming about. This, of course, is what we got last week when the monthly jobs report was released from the U.S. Department of Labor (DOL). Folks pooh-poohed the number of jobs and whining that they’re not enough or that it’s less than a bunch of economists thought that it might be. But you know what? Stuff ’em.
Facts are easy. You can check facts. What supporters of the Affordable Care Act are doing, on the other hand, transcends factual bungling. It’s far more advanced: a warping of reality so debauched it looks like something out of a tale by H.P. Lovecraft.
The east coast and parts of the southern U.S. were to varying degrees paralyzed by blizzards a few weeks ago. The snow as expected rendered the roads treacherous, and in anticipation of slick streets, shoppers flocked to the grocery stores in advance.The rush into grocery stores, and its aftermath, offers worthwhile lessons in economics.First up, […]
The highest form of charity, argued the 12th-century Jewish philosopher Maimonides, is when the help given enables the receiver to become self-sufficient.But our systems of state charity — aka welfare — have too frequently had the opposite effect: They have actually created dependency. It is time to rethink the way we help people.I’m going to […]
Last year was quite the year for Bitcoin. We’ve seen exponential growth in Bitcoin’s exchange rate and extensive coverage in the media. Another phenomenon we have witnessed is the proliferation of alternative cryptocurrencies, five of which we’ve provided below.What all of these cryptocurrencies have in common is that they rely on a decentralized network to […]
President Obama crowed in his State of the Union speech about the economy, even mentioning “a rebounding housing market.” Maybe he was referring to friends in high places, like the seller of Penthouse One in New York, which just closed for $50.9 million, all cash. Millions of mere-mortal homeowners likely wanted to throw something at […]
The nonpartisan Congressional Budget Office is acting in a bipartisan way to cover up the biggest single threat to the bipartisan political alliance that is stripping America of its wealth: the United States Congress.There is no question that the following policy is bipartisan. Democrats and Republicans in Congress are completely agreed that the following information […]
Recent difficulties with implementing the Affordable Care Act have increased opposition to the program. A majority of Americans now oppose it. Problems with the HealthCare.gov website are in all likelihood temporary. However, there are serious long-term problems, particularly considering long-term finance and labor supply issues. Given the mounting difficulties with and growing concerns about the […]
The faces of the Detroit bankruptcy are the thousands of pensioners whose promised benefits are suddenly part of the restructure negotiation. When Motown filed for Chapter 9 last July, the city had $11.5 billion in unsecured liabilities. The vast majority of this was pension and health care benefits owed to retired city employees.The images of […]
In the Gilded Age of the late 19th century, the American rich walked tall. They dressed the part. Top hats, canes, tails, spats, you name it. They built glorious mansions for all the world to see. They traveled in style, and did so publicly. They were profiled in popular magazines. Indeed, they were idolized and studied and emulated.
Today, the rich are different. They wear jeans and sneakers and ratty-looking sweaters. If they build large homes, they make sure they are inaccessible and nearly invisible. They talk like the people. They affect the way of the common folk. They pretend to be like everyone else. If they are famously rich, they give vast sums away, sometimes to dubious causes. They even call for taxes on themselves.
Here’s one theory: Property rights are weak today. This came to me in looking at the Index of Economic Freedom and how the U.S. is slipping further and further. The main reason given in the survey is that property rights are no longer secure here. The government can enter your factory and shut it down anytime. It can freeze your bank account. It can prevent mergers and acquisitions. It can slap on regulations that make your product unmarketable. Civil forfeitures are common.
The more property is vulnerable to looting by any source, the more people have the incentive to hide their wealth. In extreme cases, the rich might have a reason to publicly destroy their own wealth as a signal to would-be looters: I am not worth what you think I’m worth. This might be why so many among the rich are aggressive in their push for higher taxes. It’s a way of saying, “My money doesn’t matter to me, so it should not matter to you either. Leave me alone.”
I’m thinking about this whole subject because I just read an extremely interesting paper by economist Peter Leeson. It is called “Human Sacrifice.” He actually seeks to come up with an economic explanation for the persistence of human sacrifice in certain tribal conditions. It’s not such a surprising topic for him. He is, after all, the author of The Invisible Hook: The Hidden Economics of Pirates, a book that became one of the most praised and admired historical books in the last few years. It is also a fantastic read.
His new paper looks into the economics of human sacrifice. He focuses on the 19th-century experience of the Konds, an indigenous Indian people located in the eastern province of Orissa, India.
It was an agricultural community that variously prospered depending on weather conditions. Here, annual ritual sacrifice of human beings from other tribes, purchased with money collected from within the tribe, was practiced to great fanfare in opulent ceremonies. It was brutal and ghastly. The number of lives lost is uncountable, but very large, judging from every available report.
The whole thing was justified on religious grounds. But might have there been another reason?
Consider a seemingly unrelated fact: The great problem that vexed the Konds was intertribal relations. Within their own communities, they had peace and security. But outside of them, there was insecurity and chaos. It was not uncommon for the Konds to invade other tribes and steal what they could, nor was it uncommon for outsiders to do the same to them. All the tribes lived in fear of each other. Property rights were always vulnerable to invasion.
Professor Leeson tries to connect the dots here and make sense of the sacrifice in light of the insecurity of property rights. By putting on a hugely conspicuous display of disregarding something as valuable as a human being paid for with community money, Leeson theorizes, the tribe was attempting to broadcast the idea that there really was nothing of value to be stolen from them. This was a public act to ward off envy and invasion.
Tellingly, the sacrifice would take place in the middle of the agricultural season. “By sacri…ficing humans between the sowing and harvesting of crops, Kond communities destroyed wealth preemptively,” Leeson writes. “By sacrificing humans during the agricultural cycle but not appreciably after its completion, Kond communities destroyed wealth before other communities realized their output values and, in the event that those values incentivized aggression, before communities could mobilize for such aggression.”
Now, to illustrate the thesis, Leeson looks at the experience of how the practice came to end. Understandably, British colonial powers did everything they could to stop it. They tried moral suasion. They tried threatening violence They tried pure monetary payoffs. But nothing worked. The human sacrifices continued.
Finally, the colonial powers tried something more creative. They offered negotiation and justice services that would bring about peace and trade between tribes, provided that the Konds would stop the ritual sacrifice of human beings. The Konds readily accepted and the practice came to an end.
Professor Leeson briefly speculates on the implications here. How many others have made a show of poverty and wealth destruction as a means of disincentivizing violence? He suggests that this helps account for why monks in the Middle Ages made poverty part of the religious discipline. The Middle Ages were dangerous times to be rich, and monasteries were often exactly that. To avoid attracting looters, pillagers, and invaders, the monks took vows of poverty. (This is not to belittle the religious motivation, but only to say that it had a practical purpose as well.)
This makes a tremendous amount of sense to me.
And the applications of this idea are all around us. I know people who drive old cars when they could easily afford new ones because they want to avoid incentivizing theft. The same is true of people who could live in large houses in the center of town, but instead choose small apartments and keep their large real estate holdings out of public view.
This also explains what have come to be called “self-hating billionaires,” who conspicuously parade their attachment to welfare ideology and redistributionist politics. It’s all an effort of self-protection in times when property rights are so insecure. Better make a display of your disregard for wealth than tempt the state to disgorge you of all you own.
So think of this the next time that you see a sweater-clad Bill Gates giving hundreds of millions to far-flung charity causes that you know probably won’t amount to much. And consider that this might be a reason that CEOs of very successful companies like to follow Steve Jobs’ lead and dress in jeans and sneakers. They might even forgo the large house in favor of a minimalist apartment.
People do what they do to survive. When property rights are not secure, the well-to-do make public acts of self-immolation in order to survive.
Should the time come when property rights are secure again, we will see the behavior change. None of us will be truly safe until the rich again walk the streets with pride, live in huge houses in full view of the hoi polloi, and dress proper to their station in life.
After all, a world that is not safe for the rich is not safe for the rest of us either.