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Quote for Today

"Anyone can be a barbarian; it requires a terrible effort to remain a civilized man."
--Leonard Woolf

Quote for Today

You can't stay in your corner of the Forest waiting for others to come to you. You have to go to them sometimes.
A.A. Milne
August 21, 1920: A.A. Milne and his wife thought that their baby was going to be a girl. When he emerged a boy, the parents chose a new name for him—Christopher Robin. It would be popularized in Milne's many Winnie-the-Pooh stories of a boy and his bear.

Quotation of the Day…

… is from page 271 of F.A. Hayek’s 1950 article “Full Employment, Planning and Inflation,” which is reprinted as chapter 19 in Hayek’s 1967 collection, Studies in Philosophy, Politics, and Economics:

Full employment has come to mean that maximum of employment that can be brought about in the short run by monetary pressure.  This may not be the original meaning of the theoretical concept, but it was inevitable that it should have come to mean this in practice.  Once it was admitted that the momentary state of employment should form the main guide to monetary policy, it was inevitable that any degree of unemployment which might be removed by monetary pressure should be regarded as sufficient justification for applying such pressure.  That in most situations employment can be temporarily increased by monetary expansion has long been known.  If this possibility has not always been used, this was because it was thought that by such measures not only other dangers were created, but that long-term stability of employment might itself be endangered by them.  What is new about present beliefs is the tit is now widely held that so long as monetary expansion creates additional employment, it is innocuous or at least will cause more benefit than harm.


Source:  Don Boudreaux @ Cafe Hayek

Cost of Central Planning

if by “poor” you mean a behemoth cooperative of producers such as Land’O'Lakes, and if by “helps” you mean forcing up the price that families, including poor families, pay for milk in order to enrich those politically powerful producers. Here’s the account in today’s Wall Street Journal.  A slice:



The feds already buy one of every five gallons, and agriculture laws already make it illegal for processors to sell milk below a regionally dictated price. Then there’s a quota on dairy imports and prohibitive tariffs. In 2005 the OECD estimated that consumers pay a 26% “milk tax” as a result of all this central planning.


Lovely.  I can see why “Progressives” believe that the U.S. government is just the trustworthy, principled, and caring outfit that we should further empower to ‘redistribute’ incomes and to protect poor Americans from the rapacity of the rich.

(It is true, I admit, that cronyism in the United States isn’t – yet – as rampant as it is in Argentina.)

….

Given the actual, historical record of government behavior, asking government – simply because it possesses fearful power and expresses an interest in the assignment – to watch over “the poor” is akin to asking a gang of serial rapists – simply because it possesses fearful power and expresses an interest in the assignment – to watch over a dormitory full of unarmed co-eds.

Source:  Cafe Hayek

Quotation of the Day…

… is from pages 89-90 of the 1964 Harper Torchbooks edition of Karl Popper’s deeply insightful 1957 book, The Poverty of Historicism (footnotes deleted):



The holistic planner overlooks the fact that it is easy to centralize power but impossible to centralize all the knowledge which is distributed over many individual minds, and whose centralization would be necessary for the wise wielding of centralized power.  But this fact has far-reaching consequences.  Unable to ascertain what is in the minds of so many individuals, he must try to simplify his problems by eliminating individual differences: he must try to control and stereotype interests and beliefs by education and propaganda.


by DON BOUDREAUX on JANUARY 3, 2014

in CURIOUS TASK, HAYEK, HUBRIS AND HUMILITY, MAN OF SYSTEM, SCIENTISM, SEEN AND UNSEEN
Source: Cafe Hayek

The Minimum-Wage

Some Questions for Minimum-Wage Proponents

by DON BOUDREAUX on DECEMBER 2, 2013

in REALITY IS NOT OPTIONAL, SEEN AND UNSEEN, WORK

Here are some questions for proponents of a legislated minimum wage:

- Suppose (not unreasonably) that poor people are disproportionately likely, compared to wealthier people, to own high-mileage used cars produced, say, between 1989 and 1995.  And assume that the average price at which poor people sell each of these cars (when, say, they want to buy newer cars, or when they choose to rely more heavily upon public transportation) is $3,000.  Do you support minimum-used-car-price legislation that prohibits the sale of any car at a price of less than $5,000?  Do you believe that such legislation would make poor people richer?  Would your answer change if the legislated minimum price for cars is $3,250 rather than $5,000?  (I proposed a similar thought experiment back in June 2006.)

- Other than low-skilled labor, what other goods or services can you think of that warrant enormous amounts of empirical studies to determine the direction of the effect that mandated higher prices for those goods and services will have on the quantities of those goods and services that buyers wish to purchase?  Or is low-skilled labor the only good or service that you can think of for which it is unscientific or mistaken to suppose that, all other things unchanged, the higher is the price that buyers must pay for this product, the fewer are the quantities of this product that buyers wish to purchase?

Asked differently: Is it unscientific for protectionists to reason that higher tariffs on imported steel or sugar or automobiles or shoes will reduce (from what they would otherwise be) the quantities of these things that buyers wish to purchase?  Is it unscientific for nanny-state government officials to reason that higher taxes on cigarettes will lower the quantity demanded of cigarettes?  Is it unscientific for opponents of immigration to propose, in hopes of reducing the employment of undocumented immigrants, higher penalties on firms that employ undocumented immigrants?  Is it unscientific for proponents of rent-control to insist that, if the rents that tenants must pay for rental apartments rise, fewer people will be in the market to rent apartments?  Are National Football League officials unscientific dolts when they assume that increasing the fines for helmet-to-helmet hits will reduce the frequency of such hits?

from Cafe Hayek

Competitive Advantage Will Rule

Today's business news carried a story that the Courts in Illinois have ruled that businesses in Cook County can no longer escape paying sales taxes on major purchases such as fuel oil and other products used by their businesses.  This was previously legal but no longer.  As usual the news article did not report on the potential, if unintended, consequences of this ruling.  For if the additional sales taxes are a significant enough cost to place the firms at a competitive disadvantage, which seems possible and perhaps likely, then the firms will choose to locate somewhere other than Cook County where the sales taxes are lower.
We have already seen this happen with the State business income tax which is higher in Illinois than in some of the neighboring states.  Economic choice and competitive advantages will rule when the state chooses to make the cost of doing business sufficiently to warrant a change.

Ordinary Thieves vs. Politicians

Spare Me – and Walter Williams – Your Self-Serving and Insulting Sermonizing

by DON BOUDREAUX on OCTOBER 1, 2013

in OTHER PEOPLE'S MONEY, POLITICS

One of the great honors and joys of my life is being a colleague and friend ofWalter Williams.

Walter and I both teach on Tuesday evenings – he the first-semester PhD-level Microeconomic Theory course and I a freshman-level Principles of Microeconomic course. This evening before we went off to our respective classrooms at GMU, Walter and I were commiserating with each other (as we frequently do) over the insults that people of sense routinely endure from politicians.  Walter then related to me one of my favorites of his many insights:



I respect ordinary thieves much more than I respect politicians.  Ordinary thieves take my money without pretense.  Unlike typical politicians, these thieves don’t bore me with silly explanations of why their thievery is for the greater good.  Nor do ordinary thieves insult my intelligence by proclaiming that they’ll use the money that they steal from me to make my life better than I would have made my life had my money not been swiped from me.


I’m with Walter.  If I must be preyed upon, please let it be by unpretentious, ordinary, everyday street thugs and not by politicians.  The ridiculous insults that politicians add to the injuries that they inflict are insufferable.

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Source: Cafe Hayek

Government Intervention


On sins of economic policy, Reason magazine Editor in Chief Matt Welch points the finger at the chief U.S. policy maker, Barack Obama. The president can get virtually nothing right with respect to economic policy, according to Welch, because despite occasional rhetorical nods in the direction of free markets, he appreciates only rigged markets in which government plays a central role.

“The president’s default approach,” contends Welch, “is that big things must be achieved not by a complex market mechanism, but by centralized exertions of collective will.” Obama’s “collectivist economic philosophy,” adds Welch, was clearly set forth in his most recent State of the Union address, in which a range of economic activities were cited just before the president declared: “Now, more than ever, we must do these things together, as one nation, and one people…. My fellow Americans, we are made for this moment, and we will seize it—so long as we seize it together.”

As Adam Smith aptly observed in his 1776 book, The Wealth of Nations: “The statesman who should attempt to direct private people in what manner they ought to employ their capitals, would…assume an authority…which would nowhere be so dangerous as in the hands of a man who had folly and presumption enough to exercise it.”

Source: Cafe Hayek

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