Archive for the ‘liberty and classical liberalism’ Category

« Older Entries

Affirmative action should be terminated

May 4, 2013

Above the entrance to the U.S. Supreme Court four words are carved: Equal justice under law. The message is perfect for a people that pursues inalienable rights to life and liberty and an imprescriptible right to property – even a society that once pursued such objectives very unevenly across the races.

It is tempting for some to request unequal treatment under law designed to benefit those treated badly in the past. Such indeed is a current occurrence in the United States with respect to certain ‘minority groups’. But what may be popular and widespread is fundamentally wrong.

Once equal justice under law has been established, it should never be violated again. For to violate the rule is to suggest that there is a better rule, which is untrue. No society can pursue the goals of life, liberty and property effectively in the absence of the rule of law. And those four words carved above the entrance to the U.S Supreme Court perfectly express the essence of the rule of law.

Hat Tip: Time to scrap affirmative action’, The Economist, May 4, 2013

Tags:, ,
Posted in do well while doing good, liberty and classical liberalism, political philosophy, property rights, relevance of economic knowledge, Uncategorized | 2 Comments »

In policing against domestic terrorism, probabilities matter

April 21, 2013

The United States is committed in principle to the rule of law. The rule of law rests in part on the principle that justice is blind to the color, ethnicity and religion of the individual. All individuals are presumed to be equal under the law. I am a supporter of the rule of law, most assuredly as it reaches out to conviction and punishment of those who trasngress before the law.

However, with respect to apprehension of potential criminals, I am much more equivocal, as in practice are a large number of Americans. Although, for sure, the future is uncertain, and some events may not easily be categorized in terms of probabilities, most individuals do form subjective Bayesian probabilities over important potential events. It is human nature so to do, especially when’s own safety is at stake.

Suppose, for example, a young white woman is walking down a street in Washington, DC, and she spots a group of individuals idling together on one side of the street. Would she be more confident of proceeding if that group consisted of well-dressed middle-aged white women, or of roughly dressed young black males, or of pony-tailed young Hispanics? Unless the woman was witless, of course it would matter, matter indeed a great deal. Why? Because past history signals to that young woman very different probabilities in walking closely past such variant groups. Should the police be more vigorous in patrolling in areas where middle aged white women tend to congregate? Or should they conserve their resources for the other groups? Common-sense offers a clear-cut answer to those questions.

The same issues arise with regard to policing against prospective terrorist attacks in affluent Western nations, including the United States. The radicalization of young Muslims in the West, in particular, but not exclusive to the children of the relatively well-off, is by now a familiar story.The London bombers of 2005 were middle-class Pakistani immigrants from Birmingham. Faisal Shahzad, the failed Times Square bomber was a naturalized citizen from Pakistan. The numbers are not large, and statisticians may claim that probabilities cannot be effectively drawn from such few instances. Instinct, however, advises differently.

Subjective Bayesian priors advise thoughtful people that authorities concerned to minimize future terrorist attacks within the United States are well-advised to concentrate their limited resources on monitoring foreign Muslim groups in the United States, to monitoring specific immigrant communities that have produced jihadists in the past, and to infiltrating mosques and other Muslim venues where fiery Imams are known to preach and rant. Such focused monitoring does not infringe the rule of law as long as due process is maintained in determining whether those apprehended indeed constitute a threat to society.

Some civil libertarians may beat their chests in rage at such a policy. If so, perhaps they should locate their own families in the middle of such communities and expose their own loved ones to limb dismemberment and violent death when a preventable act of terrorism eventually occurs, as occur it assuredly will in the absence of vigorous surveillance.

Hat Tip: ‘The Brothers Tsarnaev’, The Wall Street Journal’, April 20, 2013

Tags:, , ,
Posted in do well while doing good, liberty and classical liberalism, media rhetoric, relevance of economic knowledge, Uncategorized, war and peace | 2 Comments »

BBC displayed left-wing prejudice during Thatcher funeral

April 20, 2013

The British Broadcasting Corporation was originally established in order to provide unbiased accurate coverage of the news. It remains today as a subsidized government agency. All households with television sets must pay an annual fee to the Corporation.

From the outset, the BBC violated its mission of independence, denying Winston Churchill access to its radio transmissions during the 1930s, and thereby preventing the nation from understanding the nature of the national socialist and fascist atrocities that were consolidating themselves in Germany and Italy.This mission failure was a direct response of the BBC to pressure exerted by the Conservative government at that time as it pursued appeasement and set the scene for the Nazi domination of continental Europe.

Since the end of World War II, the BBC has stuffed its payroll with left-leaning employees, instinctively hostile to competitive free markets, and favorably inclined to big government. This bias showed itself during the London Olympic Games, when the introductory program focused attention on the so-called ‘Satanic mills’ of the industrial revolution and the caring service provided by the National Health Service.

So, I watched the BBC coverage of Margaret Thatcher’s ceremonial funeral on April 17, 2013 carefully, in order to determine whether BBC personnel would display such prejudice during the funeral of Britain’s most effective pro-free market politician/ stateswoman. And surely enough, bias was observable. I am not alone in that judgment. Ronald Reagan’s speech-writer, Peggy Noonan watched the funeral and confirms my own judgment:

“It mattered that the funeral was in august and splendid St. Paul’s, mattered that Thatcher’s coffin, placed under the great dome, stood directly over the tombs of Nelson and Wellington, in the crypts below.. This placing of Thatcher with the greats of the past, and the fact that the queen and Prince Philip came to her funeral, as they have for no prime minister since Churchill in 1965, served as an antidote to British television coverage surrounding her death.

It was terrible. They could not in any sustained way mark her achievements or even show any particular respect. All they could say was that she was ‘divisive and controversial,’ although sometimes they said ‘divisive and – well really divisive.’ Anchors reported everything as if from a great distance, with no warmth; they all adopted the cool, analytical look they use when they mean to project distance…All this – the media, the left – had the effect of telling people: You’ll look stupid if you speak in support of Thatcher, you’ll look sentimental, old. And it may be dangerous to attend to funeral – there could be riots.

So then, the surprise that was a metaphor. At the end of the funeral, they all marched down the aisle in great procession – the family, the queen, the military pallbearers, carrying the casket bearing the Union Jack. The great doors flung open, the pallbearers marched forward, and suddenly from the crowd a great roar. We looked at each other. demonstrators? No. Listen. They were cheering. They were calling out three great hurrahs as the pallbearers went down the steps. Then long cheers and applause. It was electric.

England came. The people came. Later we would learn they’d stood 30 deep on the sidewalk, that quiet crowds had massed on the Strand and Fleet Street and Ludgate Hill.

When they died, Ronald Reagan, John Paul II, and Margaret Thatcher were old and long past their height of power. Everyone was surprised when Reagan died that crowds engulfed the Capitol; people slept on sidewalks to view him in state. When John Paul died the Vatican was astonished to see millions converge. ‘Santa Subito’.

And now at the end some came for Thatcher, too. What all three had in common: No one was with them but the people.

Margaret Hilda Thatcher, rest in peace.’ Peggy Noonan, ‘Britain Remembers a Great Briton’, The Wall Street Journal, April 20, 2013

You would never find such words reported out by the BBC. But Peggy Noonan, superb writer that she is, put into elegant words thoughts that crossed my mine also during the early hours of that morning (for me in Virginia) as Britain’s greatest ever peacetime prime minister was laid to rest.

Tags:, , ,
Posted in do well while doing good, liberty and classical liberalism, media rhetoric, political philosophy, property rights, relevance of economic knowledge, Uncategorized, war and peace | 2 Comments »

Margaret Thatcher’s Ceremonial Funeral

April 17, 2013

I have just watched, on BBC TV, the Ceremonial Funeral held in honor of Margaret Thatcher in St. Paul’s Cathedral. It was a very moving spectacle and an opportunity for me to say goodbye to Britain’s finest peacetime Prime Minister.

It was entirely appropriate that the funeral was Ceremonial and not State. For Margaret Thatcher, although a creature of politics, always and vehemently placed the individual before the state. It was also entirely appropriate that Queen Elizabeth II and the Duke of Edinburgh attended her funeral. For Margaret Thatcher contributed more to her country than any single person other than Sir Winston Churchill. The Queen attended Churchill’s State Funeral in 1965, the only other occasion involving a British Prime Minister during her lengthy reign.

Margaret Thatcher, like Winston Churchill before her, was a statesman rather than a politician. Both great leaders had a vision for the future of their beloved country that was not initially shared by a majority of the people. Both had that rare gift of leadership that enabled them to move the center of the electorate to a vision that would prove to be an invaluable lifeline. In the case of Winston Churchill, his vision saved Western Civilization. In the case of Margaret Thatcher, her vision can be expressed in simple but compelling terms:

Individual liberty, private property, constitutional monarchy, limited government and the rule of law.

Margaret Thatcher embraced that compelling vision and devoted her life to helping her people to take back a country that had drifted dangerously in the direction of collectivism, republicanism, unlimited government and rule by man.

May God Bless Her And May She Rest In Peace

Tags:, ,
Posted in do well while doing good, economics and public choice, liberty and classical liberalism, political philosophy, property rights, relevance of economic knowledge, Uncategorized, war and peace | 4 Comments »

Margaret Thatcher: conviction politician who knew when to compromise

April 14, 2013

Margaret Thatcher was driven by clear-cut convictions. Her economic policies were based on the scholarship of Friedrich von Hayek and Milton Friedman. Her foreign policy was based on a hatred for communism and a recognition that the Hun is always at the gate.

However, Margaret Thatcher was an extremely successful politician, winning three consecutive elections for her party and remaining Prime Minister for eleven years during a turbulent decade which saw the collapse of an Evil Empire and the consolidation of the European Union. Complete adherence to her convictions would have courted early disaster at the polls and would have returned Britain to the path of economic decline from which she helped to rescue it.

A few examples illustrate Thatcher’s willingness to compromise her convictions. First let me focus on domestic policy. Both Hayek and Friedman were opposed to nationalized education and nationalized medicine, on grounds of economic inefficiency and unresponsiveness to customer preferences. Thatcher shared their views. However, she did not attempt to privatize those areas of economic activity – resisting pressure from her political mentor, Sir Keith Joseph – because she was aware that a significant electoral majority would be hostile to such changes. Very carefully, and cautiously, Thatcher focused her economic policies into fields where public opinion was more favorable – privatization of industrial dinosaurs, recalibration of union privileges, the selling off of council houses (public housing) and the like. She promoted income tax cuts favored by her mentors while paying attention to budgetary balance through the promotion of consumption taxes.She attacked inflation head on through Friedman-type monetary reforms. Even there, she did so pragmatically, tracking the exchange rate rather than focusing exclusively on the monetary base..

With respect to foreign policy, Thatcher flirted with Gorbachev, as a leader of the USSR with whom she felt able to deal. Her initiative was followed by Ronald Reagan and ultimately succeeded in isolating communism to loser countries such as North Korea and Cuba. Perhaps only Thatcher could go to Russia.

With respect to Germany, Thatcher swallowed her fear and made no attempt to stop the reunification of East and West. She made no attempt to remove Britain from the European Union, though she wisely opposed British participation in a single currency regime.

There is an important lesson to be learned from the Thatcher experience for the current generation of conviction politicians who operate in the United States under the Tea Party label. If you continue to eschew pragmatism in favor of hard principle, you will leave the political arena without significant achievements. Successful politicians must always pay attention to the electorate, even while they attempt to shape electoral opinion through policy successes. That is a long hard road to follow for those of you who want to change the world while still in your twenties or thirties. But that is the road that you will have to follow if you are to leave any durable footprints on the sand of time.

Tags:, ,
Posted in do well while doing good, economics and public choice, liberty and classical liberalism, media rhetoric, political philosophy, property rights, relevance of economic knowledge, Uncategorized, war and peace | Leave a Comment »

Britain should go back to the future

April 12, 2013

In a singularly depressing column, Martin Wolf (Financial Times, April 12, 2013, attacks Margaret Thatcher for helping to return Britain to a 19th century role for government. He claims that Margaret Thatcher’s market-oriented policies were responsible for rising inequality, excessive financial deregulation and inadequate investment in human and physical capital:

“The nation did not fall behind the late 19th century US or Germany because its government did too much. It was far more because it was culturally and institutionally incapable of remaining central during the ‘second industrial revolution’ – an era of rapid innovations and giant corporations. Increasingly, the British became rentiers. That was one reason why the City became the leading global financial center. It is not an accident that an effort by a forceful politician to reverse the interventionism of the 20th century has brought the UK so far back to this future. Thus, it has a huge financial centre, weak domestic manufacturing, a deregulated labour market, rising inequality and low private and public investment. It all looks remarkably late-19th century.” Martin Wolf, ‘Britain’s economy should not go back to the future’, Financial Times, April 12, 2013

This is simply balderdash. Has Martin Wolf never heard of the theory of comparative advantage? As Briton’s became the wealthiest people per capita in the world, so high labor costs directed late 19th century investment into high productivity fields of enterprise. As profit margins overseas exceeded those in the UK, so British investments poured overseas, strengthening the credit-worthiness of the home country. As incomes widened between those in expanding areas of enterprise by comparison with those that were stagnant or declining, so resources poured out of agriculture into the industrial and service sectors of the economy. Of course, London – fulcrum of the Gold Standard – became the world’s leading financial center.

No one was to know that Britain would be forced to utilize its financial resources in order to save the Western World twice in just over thirty years from the dictatorship of the filthy Hun, while countries like the United States sat on the sidelines until the 11th hour of two World Wars. Without 19th century free enterprise, the British Empire would not have been in any position to defend France from German barbarism over the period 1914-1918. Without the free enterprise of successive British interwar governments, the British Empire would not have been able to stand alone against Germany, Russia and Italy in defense of Western civilization over the period 1939–1941 when a vacillating FDR was dragged into war by the Japanese attack on Pearl Harbor.

Margaret Thatcher had good reason and uncommon good sense in looking back to the 19th century as the basis for saving Britain from irredeemable decline. Unfortunately, public opinion would not allow this great leader to roll back the state as much as she would have liked. The reason why Britain currently is suffering from economic stagnation is not to be found in any failure of free markets. Human capital is weak because the state schools were not privatized. As a consequence, far-left teachers have indoctrinated successive generations of British school-children into an ideology of dependence that has shackled enterprise. A sequence of Labour governments, since 1997, have run up non-sustainable amounts of national debt that seriously crowd out private sector investments. The financial sector performed badly during the late 2000s primarily because of mis-management by a socialized Bank of England that failed to impose sound monetary controls. The British Prime Minister, Gordon Brown, played an unforgivable role in promoting fiscal and monetary excess that unfairly became associated with market and not government failure.

Britain indeed should go back to the 19th century, Mr. Wolf. Free trade, free markets and minimal government were harbingers of 19th century economic success. They surely would be harbingers of 21st century success, would public opinion facilitate their speedy return.

Tags:, , ,
Posted in do well while doing good, economics and public choice, liberty and classical liberalism, political philosophy, property rights, relevance of economic knowledge, Uncategorized, war and peace | 2 Comments »

Privatization: an enduring Thatcher legacy

April 10, 2013

Margaret Thatcher (1979-1990) played a major role in creating a modern Britain out of a socialist dinosaur by her radical program of privatization.

Interestingly, such a program did not feature in her 1979 election manifesto and Thatcher was initially cautious about its high political cost. After all, Britain had just suffered through the Labour government’s Winter of Discontent, during which Prime Minister Callaghan had publicly stated that his government prostrated itself before the trade unions and advised all Britons to retreat ‘each to your union’.

Fortunately, Margaret Thatcher was made of sterner stuff. In late 1979, the Conservative government sold off parts of British Petroleum, now BP PLC. In 1981, British Aerospace and Cable & Wireless were privatized. In 1983, Amersham was privatized.

Then Thatcher put her killer high heels right down on the privatization pedal. British Telecom was sold off in 1984 for $3.9 billion, the biggest British public offering ever effected at that time. To boost demand for shares, the government sold them en masse to retail investors.They eventually delivered handsome returns.In 1986, Thatcher sold off British Gas for $5.8 billion. In 1988, she sold off British Airways for $900 million. In 1987, she sold off Rolls Royce for $1.4 billion.

Inevitably, the far-left union leaders who ran Britain in 1979 recoiled at such an onslaught designed to rip the heart out of union Ludditism. But Margaret Thatcher and Sir Keith Joseph had learned Virginia public choice and understood how to undermine the hegemony of elected union leaders over their public sector workers. The Conservative government provided all employees in the privatized industries with shares marked below retail price. The workers stiffed their union leaders and voted through privatization as a means of becoming men and women of property. In a reversal of fortune, public sector workers became principals and forced their ‘leaders to become unwilling agents in the privatization of British industry.

No government since that led by Thatcher – even the miserable socialist government led briefly by Gordon Brown – has ever dared to take back into public ownership the companies released by Margaret Thatcher from their bureaucratic fetters.As Britain surged up economic ranking of Western European nations, continental Europe itself began to emulate the strategy of the Iron Lady, reaffirming the sound judgment of her economic program.

Hat Tip: John Vickers and George Yarrow, Privatization: An Economic Analysis

Tags:, , ,
Posted in do well while doing good, economics and public choice, liberty and classical liberalism, political philosophy, property rights, relevance of economic knowledge, Uncategorized | 1 Comment »

Baroness Margaret Thatcher

April 8, 2013

BARONESS MARGARET THATCHER

THANK YOU FOR YOUR EFFORTS TO RESTORE OUR THEN DECLINING NATION

REST IN PEACE

Charles K. Rowley

Tags:,
Posted in do well while doing good, economics and public choice, liberty and classical liberalism, political philosophy, property rights, relevance of economic knowledge, Uncategorized, war and peace | 1 Comment »

The Bitcoin price bubble

April 4, 2013

The Bitcoin is a virtual currency. The currency was created on July 17, 2010 by an unknown computer scientist with the stock of ‘coins’ growing according to a predetermined algorithm. At its launch, one Bitcoin exchanged for $0.05 (a nickel).

Untethered to any real asset, the Bitcoin’s price is determined purely by speculation on exchanges around the world. In the absence of any government intervention, a buying frenzy has sent the value of the total Bitcoin stock past $1.5 billion. The price of a single Bitcoin has doubled in less than two weeks. Having passed $100 on April 1, 2013, it peaked (so far) at $147 a Bitcoin on April 3, 2013, before falling back to $110.

The Bitcoin currency may grow in accordance with a predetermined algorithm, but it is nothing if not volatile with respect to price. A 2011 spike took the price of a Bitcoin from $2 to over $30 – and back again. Now, in the wake of the Greek Cypriot bank bailout fiasco, Bitcoin’s advocates are pitching the currency as an alternative to authorized currencies that can be devalued or confiscated at the will of political hacks.

All bubbles eventually burst and the Bitcoin will prove to be no exception. A major problem is that governments prefer a monopoly of theft. They do not relish competition in that lucrative activity. So if the Bitcoin gets too big for government’s boots, they will stamp down on it.

Gold, coin and bullion, still remains the preferred asset for those who do not place great faith in government.But do take delivery and hide your holdings from inquisitive government eyes.

Tags:, , ,
Posted in Bank Regulation, liberty and classical liberalism, monetary policy, relevance of economic knowledge, Uncategorized | 5 Comments »

British government rolls back the welfare state

April 1, 2013

During World War II, William Beveridge – a naive social reformer – published a report suggesting that the state must provide ‘cradle to grave’ protection from want, disease, ignorance, squalor and idleness’. The first naive postwar Labour government enacted into law an extensive program of ‘reform’ supportive of the Beveridge Report.

The result was not at all what the liberal reformer had in mind. By 2010, when the Conservative-Liberal Coalition government came to power, it was unambiguously clear that the comprehensive schools were under-performing badly, pouring large numbers of illiterates onto a difficult labor market. It was unambiguously clear that a comprehensive system of welfare transfers was maintaining large sub-populations in a state of permanent idleness, bolstered by unemployment benefit and suspect disability payments. It was clear that the extensive system of public housing had led to entire areas of major cities mired in squalor, disease and violence.

Because the welfare state had also racked up unsustainable public debt, the Coalition government was offered a prime opportunity to do well while doing good, to reduce public spending while empowering individuals to take responsibility for their own lives.

One government could not possibly reform such a vast area of dysfunction in a single term. So the Coalition government has focused attention on education and welfare reform. From today, major contractions in the welfare state take effect. This is a glorious day for the freedom of the individual from coercion by the state. The government is determined to move individuals and households off the benefit rolls and into productive employment and to encourage such individuals and households to assume personal responsibility for their lives.

Henceforth, sickness and disability benefits are to be strictly time-limited and subject to independent medical assessment. Individuals who receive housing benefits will be obliged to pay rent to social landlords, instead of rent being paid directly from the state, and will be obliged to pay extra rent out out of their own pockets, if they choose to keep a spare room. Child allowances are to be cut back or eliminated for those well above the poverty line. And these are just the tip of the iceberg of welfare reform that is designed to recreate the responsible society.

Public opinion is firmly behind these welfare cut-backs. The percentage of Britons who think that if benefits are less generous individuals will stand on their own two feet increased from 26 per cent in 1991 to 54 per cent in 2012.

Onward and upward! A recession is the best of times to introduce such reforms. For everyone, including the taxpayer, suffers in such circumstances, and attitudes harden towards the bailing out of the undeserving poor and other fellow-travelers.

Hat Tip: Sarah Neville, ‘UK welfare state’s biggest contraction takes effect’, Financial Times, April 1, 2013

Tags:, , , ,
Posted in budget deficits, do well while doing good, economics and public choice, liberty and classical liberalism, political philosophy, property rights, Uncategorized | 2 Comments »

« Older Entries
Follow

Get every new post delivered to your Inbox.

Join 68 other followers