Quarantine (3DO)
Monday, April 30, 2018
Why We Have a Surveillance State
Why We Have a Surveillance State
“Gentlemen do not read each other’s mail.” Henry Stimson, Secretary of State, 1929
I was upbraided recently by a dear friend for my frequent praise of outcast investor Peter Thiel over Thiel’s involvement with big data company Palantir. He forwarded me a Bloomberg article titled “Peter Thiel’s data-mining company is using War on Terror tools to track American citizens” adding: “Really scary. Not good for democracy; a better version of the Stasi’s filing system and way cheaper and more efficient.”
Increasingly, we live under the kind of comprehensive surveillance predicted by science fiction writers. But Palantir is just an arms merchant, not the architect of our brave new world. Like gun manufacturers, its products can be used for good or evil. I have always believed that moral responsibility lies with the wielder of weapons, not the manufacturers. (This is often expressed as “Guns don’t kill people, people kill people.”)
Peter Thiel’s choice to become an arms merchant rather than invest his considerable talents and fortune elsewhere is a fair question given his libertarian leanings. I have no insight into the answer. I would guess that he founded Palantir as an act of patriotism after 9/11, and it metastasized following the money, cash being the mother’s milk of the state, something the celebrated Alexander Hamilton deeply understood.
Because our prevailing governing philosophy acknowledges no limits to the doing of good or the thwarting of evil, any means necessary may be employed as long as worthy ends can be plausibly asserted. Evil must be discouraged, taxed, or outlawed; good must be encouraged, subsidized, or made mandatory. This progressive government mission must be implemented in the public square, in the marketplace, in our educational institutions, around the world, and in our homes until all forms of social injustice are eliminated.
To be sure, such an expansive impulse is not unique. The communists felt the same way from the 1920s to the 1980s as did the fascists through the 1930s and 1940s, alarmingly making a recent comeback. But the sustained march of the progressive movement from Woodrow Wilson’s cartelization of the economy to support his War to End all Wars to FDR’s New Deal to LBJ’s Great Society to the spectacle of Obamacare outlasted all other pretenders. Progressivism has fueled a centralization of American power whose growth and global reach is unparalleled in human history. The end result is a multi-headed Leviathan that scoffs at the quaint notion that the federal government should be limited to the 17 powers enumerated in Article One, Section Eight of the Constitution.
As Congress increasingly abdicated regulatory power to agencies of the executive branch a parallel judicial system emerged wherein administrative law courts act as legislators, prosecutors, police, judge, and jury in matters touching every aspect of our lives and businesses. This system, too, has a voracious appetite for information. How else to ensure that its tens of thousands of mandates, regulations, prohibitions, guidances, edicts, and reporting requirements are strictly obeyed? The opportunity to manipulate this shadow government invites a degree of lobbying and influence peddling that would make the Grant administration blush.
Our national government was once unique in having only two crimes over which it claimed jurisdiction: treason and counterfeiting. This was due to the federalist architecture our founders devised, reserving ordinary police powers for the states. But such a division of powers did not hold. Our central government has since created a vast and complex criminal code with laws too numerous to count. This includes weaponized vagaries like conspiracy, wire fraud, and obstruction of justice that ensure crimes can be manufactured even after exhaustive investigations find that none have been committed.
This has empowered a cabal of politicized federal prosecutors that can selectively indict anyone they please, using legal thuggery to threaten targets with bankruptcy to better extract plea bargains, which is why 90 percent of their cases never go to trial. These inquisitors also have the power to compel third parties to surrender vast troves of information that agents can comb through searching for anything that can be construed as a crime, even if these infractions bear no relation to the charges for which the target was originally indicted.
So I disagree that comprehensive and inescapable surveillance is “not good for democracy.” It is the inevitable consequence of democracy, only recently empowered by the advent of big data and total interconnectedness. Our founders were rightly fearful of democracy, doing everything they could to make sure it never took root in America. Their efforts to preserve our liberty, our property, and our privacy failed, and we are paying the price.
Bill Frezza
Bill Frezza is the former host of RealClear Radio Hour and the author of New Zealand’s Far-Reaching Reforms: A Case Study in How to Save Democracy from Itself.
I was upbraided recently by a dear friend for my frequent praise of outcast investor Peter Thiel over Thiel’s involvement with big data company Palantir. He forwarded me a Bloomberg article titled “Peter Thiel’s data-mining company is using War on Terror tools to track American citizens” adding: “Really scary. Not good for democracy; a better version of the Stasi’s filing system and way cheaper and more efficient.”
Increasingly, we live under the kind of comprehensive surveillance predicted by science fiction writers. But Palantir is just an arms merchant, not the architect of our brave new world. Like gun manufacturers, its products can be used for good or evil. I have always believed that moral responsibility lies with the wielder of weapons, not the manufacturers. (This is often expressed as “Guns don’t kill people, people kill people.”)
Peter Thiel’s choice to become an arms merchant rather than invest his considerable talents and fortune elsewhere is a fair question given his libertarian leanings. I have no insight into the answer. I would guess that he founded Palantir as an act of patriotism after 9/11, and it metastasized following the money, cash being the mother’s milk of the state, something the celebrated Alexander Hamilton deeply understood.
Surveillance Is Not the Problem, but It Is a Symptom
The real threat to the republic, however, lies not in the weapons available but in the unlimited and unaccountable bureaucracy in Washington that deploys them, both at home and abroad. Having broken free of constitutional constraints, America’s political class now directs an all-powerful state that naturally adopts every tool technology has to offer.Because our prevailing governing philosophy acknowledges no limits to the doing of good or the thwarting of evil, any means necessary may be employed as long as worthy ends can be plausibly asserted. Evil must be discouraged, taxed, or outlawed; good must be encouraged, subsidized, or made mandatory. This progressive government mission must be implemented in the public square, in the marketplace, in our educational institutions, around the world, and in our homes until all forms of social injustice are eliminated.
To be sure, such an expansive impulse is not unique. The communists felt the same way from the 1920s to the 1980s as did the fascists through the 1930s and 1940s, alarmingly making a recent comeback. But the sustained march of the progressive movement from Woodrow Wilson’s cartelization of the economy to support his War to End all Wars to FDR’s New Deal to LBJ’s Great Society to the spectacle of Obamacare outlasted all other pretenders. Progressivism has fueled a centralization of American power whose growth and global reach is unparalleled in human history. The end result is a multi-headed Leviathan that scoffs at the quaint notion that the federal government should be limited to the 17 powers enumerated in Article One, Section Eight of the Constitution.
Examples of Democracy’s Dependence on Surveillance Abound
Since the passage of the 16th amendment, we have learned to live with an Internal Revenue Service against which citizens have no right to privacy, no right to remain silent, and no presumption of innocence. This most invasive tax system ever devised insists on comprehensive intrusion into every citizen’s financial life, dragooning every employer, banker, broker, and financial intermediary into an unpaid spy network that makes Palantir look like a rank amateur. Government schools began educating us to submit to this kind of blanket surveillance as the price we pay for civilized society long before computers played a role.As Congress increasingly abdicated regulatory power to agencies of the executive branch a parallel judicial system emerged wherein administrative law courts act as legislators, prosecutors, police, judge, and jury in matters touching every aspect of our lives and businesses. This system, too, has a voracious appetite for information. How else to ensure that its tens of thousands of mandates, regulations, prohibitions, guidances, edicts, and reporting requirements are strictly obeyed? The opportunity to manipulate this shadow government invites a degree of lobbying and influence peddling that would make the Grant administration blush.
Our national government was once unique in having only two crimes over which it claimed jurisdiction: treason and counterfeiting. This was due to the federalist architecture our founders devised, reserving ordinary police powers for the states. But such a division of powers did not hold. Our central government has since created a vast and complex criminal code with laws too numerous to count. This includes weaponized vagaries like conspiracy, wire fraud, and obstruction of justice that ensure crimes can be manufactured even after exhaustive investigations find that none have been committed.
This has empowered a cabal of politicized federal prosecutors that can selectively indict anyone they please, using legal thuggery to threaten targets with bankruptcy to better extract plea bargains, which is why 90 percent of their cases never go to trial. These inquisitors also have the power to compel third parties to surrender vast troves of information that agents can comb through searching for anything that can be construed as a crime, even if these infractions bear no relation to the charges for which the target was originally indicted.
So I disagree that comprehensive and inescapable surveillance is “not good for democracy.” It is the inevitable consequence of democracy, only recently empowered by the advent of big data and total interconnectedness. Our founders were rightly fearful of democracy, doing everything they could to make sure it never took root in America. Their efforts to preserve our liberty, our property, and our privacy failed, and we are paying the price.
Bill Frezza
Bill Frezza is the former host of RealClear Radio Hour and the author of New Zealand’s Far-Reaching Reforms: A Case Study in How to Save Democracy from Itself.
This article was originally published on FEE.org. Read the original article.
Friday, April 27, 2018
Thursday, April 26, 2018
Finland Ends Its Experiment with Universal Basic Income
Finland Ends Its Experiment with Universal Basic Income
I’m conflicted.
I’ve repeatedly expressed skepticism about the idea of governments providing a “basic income” because I fear the work ethic will (further) erode if people automatically receive a substantial chunk of money.
Moreover, I also fear that a basic income will lead to an ever-expanding burden of government spending, particularly once net beneficiaries figure out they can vote themselves more money.
Given these concerns, I should be happy about this report from the New York Times.
Indeed, one of my arguments for radical decentralization in America is that states will try different approaches and we’ll have a much better chance of learning what works and what doesn’t.
And maybe we’ll learn that there are some benefits of providing a basic income. But, as reported by the U.K.-based Guardian, it’s unclear whether the Finnish experiment lasted long enough or was comprehensive enough to teach us anything.
That being said, there already has been some research that underscores my concerns.
The OECD is not my favorite international bureaucracy, but its recent survey on Finland included some sobering estimates on the cost of a nationwide basic income.
P.S. Given the option of voting on a basic income in 2016, Swiss voters overwhelmingly rejected the notion.
P.P.S. Former Vice President Joe Biden actually agrees with me about one of the downsides of basic income.
Daniel J. Mitchell
Daniel J. Mitchell is a Washington-based economist who specializes in fiscal policy, particularly tax reform, international tax competition, and the economic burden of government spending. He also serves on the editorial board of the Cayman Financial Review.
I’ve repeatedly expressed skepticism about the idea of governments providing a “basic income” because I fear the work ethic will (further) erode if people automatically receive a substantial chunk of money.
Moreover, I also fear that a basic income will lead to an ever-expanding burden of government spending, particularly once net beneficiaries figure out they can vote themselves more money.
Given these concerns, I should be happy about this report from the New York Times.
The reason I’m conflicted is that the current welfare state—both in the United States and other developed nations—is bad for both taxpayers and poor people.For more than a year, Finland has been testing the proposition that the best way to lift economic fortunes may be the simplest: Hand out money without rules or restrictions on how people use it. The experiment with so-called universal basic income has captured global attention… Now, the experiment is ending. The Finnish government has opted not to continue financing it past this year, a reflection of public discomfort with the idea of dispensing government largess free of requirements that its recipients seek work. …the Finnish government’s decision to halt the experiment at the end of 2018 highlights a challenge to basic income’s very conception. Many people in Finland—and in other lands—chafe at the idea of handing out cash without requiring that people work. …Finland’s goals have been modest and pragmatic. The government hoped that basic income would send more people into the job market to revive a weak economy. …The basic income trial, which started at the beginning of 2017 and will continue until the end of this year, has given monthly stipends of 560 euros ($685) to a random sample of 2,000 unemployed people aged 25 to 58. Recipients have been free to do as they wished… The Finnish government was keen to see what people would do under such circumstances. The data is expected to be released next year, giving academics a chance to analyze what has come of the experiment.
Indeed, one of my arguments for radical decentralization in America is that states will try different approaches and we’ll have a much better chance of learning what works and what doesn’t.
And maybe we’ll learn that there are some benefits of providing a basic income. But, as reported by the U.K.-based Guardian, it’s unclear whether the Finnish experiment lasted long enough or was comprehensive enough to teach us anything.
The scheme—aimed primarily at seeing whether a guaranteed income might incentivise people to take up paid work by smoothing out gaps in the welfare system …it was hoped it would shed light on policy issues such as whether an unconditional payment might reduce anxiety among recipients and allow the government to simplify a complex social security system… Olli Kangas, an expert involved in the trial, told the Finnish public broadcaster YLE: “Two years is too short a period to be able to draw extensive conclusions from such a big experiment. We should have had extra time and more money to achieve reliable results.”I will be interested to see whether researchers generate any conclusions when they look at the two years of data from the Finnish experiment.
That being said, there already has been some research that underscores my concerns.
The OECD is not my favorite international bureaucracy, but its recent survey on Finland included some sobering estimates on the cost of a nationwide basic income.
In a basic income scenario, a lump-sum benefit replaces a number of existing benefits, financed by increasing income taxation by nearly 30% or around 4% of GDP. …the basic income requires significant increases to income taxation. …Financing a basic income at a meaningful level thus would require considerable additional tax revenue, and heavier taxation of income would at least partially undo any improvement in work incentives.And in a report on basic income last year, the OECD poured more cold water on the idea.
…large tax-revenue changes are needed to finance a BI at meaningful levels, and tax reforms would therefore need to be an integral part of budget-neutral BI proposals. …abolishing tax-free allowances and making BI taxable means that everybody would pay income tax on the BI, and on all their other income. Tax burdens would go up for most people as a result, further increasing tax-to-GDP ratios that are currently already at a record-high in the OECD area. …There are also major concerns about unintended consequences of a BI. An especially prominent one is that unconditional income support would reduce the necessity for paid work.Indeed, it’s difficult to see how work incentives aren’t adversely affected. Why go through the hassle of being employed when you can sit at home and play computer games all day?
P.S. Given the option of voting on a basic income in 2016, Swiss voters overwhelmingly rejected the notion.
P.P.S. Former Vice President Joe Biden actually agrees with me about one of the downsides of basic income.
Reprinted from International Liberty.
Daniel J. Mitchell
Daniel J. Mitchell is a Washington-based economist who specializes in fiscal policy, particularly tax reform, international tax competition, and the economic burden of government spending. He also serves on the editorial board of the Cayman Financial Review.
This article was originally published on FEE.org. Read the original article.
Wednesday, April 25, 2018
Tuesday, April 24, 2018
France Shows What You Actually Get with Democratic Socialism
France Shows What You Actually Get with Democratic Socialism
Strikes and blockades have spread across France as President Emmanuel Macron spends his time touring Europe with a new EU agenda. The French state-run railway service, SNCF, is currently dealing with massive strikes on both the regional and the high-speed inter-city lines. The unions CGT and SUD-Rail are striking in opposition to any change in the status of SNCF (the public rail service) personnel. It should be noted that government reform is very moderate since current employees of the SNCF hired to that professional status will keep all the benefits and privileges associated with it. The changes are merely affecting new employees.
As of now, the service is confronted with the fiscal burden of both massive debts and deficits. Given the monopoly on all transport lines, this is actually a phenomenal "achievement.” It truly takes a government-run system to produce services that operate this poorly. And yet, SNCF employees seem determined not to let the government change a thing. Out of spite, the union plans to run fewer trains than normal until June. However, when the decision to reduce the number of operating trains was made, the union didn’t consider how that might affect their own cause.
After planning a rally in support of these new changes, the union realized that the lack of trains meant fewer people had access to the transportation needed to attend the rally. One union leader commented on this, saying:
The strikes in the public railway sector are paired with equally intrusive strike actions on France's publicly held airline AirFrance. After more than nine days of strikes, the board had suggested a deal to the union: 2 percent of salary increase in 2018, then a 5 percent over a period of three years. The union responded by demanding an immediate 5 percent increase and announced that the strike would continue.
With AirFrance being one of the few airlines that connect the country by air, and with almost all train lines paralyzed, the behavior of the AirFrance union seems deliberately coordinated. This trade union behavior only seems confirmed by the fact that in a number of cities, union activists blocked the inter-city buses run by private companies. The German bus travel provider Flixbus had seen a massive spike in reservations following the strikes, and even ran ads online, saying "during the strike, take Flixbus!"
Being the second-largest strike-friendly country in Europe with 125 days of strikes per 1,000 employees is one thing. Blocking the access of private companies which are merely trying to get people to their workplaces, that is having true resentment for those who work.
What are they protesting against? They oppose the government's new "Law for the orientation and success of students" (ORE), through which the Macron administration suggests to select students more through their performance in high school. Until now, no qualifications apart from a baccalaureate were needed to get accepted to a university. This, paired with the fact that French students pay virtually no tuition fees and benefit from large student and housing subsidies, has made faculties considerably over-crowded.
At a large student protest in the streets of Toulouse, one interviewed student bemoaned the fact that new reforms could lead universities "to choose the students it prefers" and that students that performed better would have better chances.
The mere notion of merit seems absolutely foreign to French students. Any form of merit-based system is antithetical to their convictions, which have been built over years on three premises:
But why isn't a society built on this social-egalitarian mantra promoted by what Bernie Sanders calls "democratic socialism" (we still call it socialism in Europe), so discontent with its benefits? French people get all the perks that the Vermont senator asks for, including government-run health care, pension systems, tuition-free universities. And yet, they spend a fifth of their work-time on the streets, bemoaning the overtaking of the "neoliberal order."
Here's the truth: there is no end goal in socialism but to take more and more. No demand is big enough, no social welfare program extensive enough. If you believe that you could satisfy those who argue for any kind of social welfare program by giving it to them, is fundamentally mistaken. On the same side, the result is more devastating for the poorest in society, with larger unemployment, and economic opportunities. Those who fail are unanimously seen as victims of the capitalist system, and those who succeed must have done so through vicious greed and reckless exploitation.
This is why the innovators and creators of the world reside in the United States, and not in France.
So you want to be more like France?
Bill Wirtz
Bill Wirtz is a Young Voices Advocate. His work has been featured in several outlets, including Newsweek, Rare, RealClear, CityAM, Le Monde and Le Figaro. He also works as a Policy Analyst for the Consumer Choice Center.
Massive Public Infrastructure Strikes
The labor union activists are equally upset by the liberalization of the rail market which is being initiated by the European Union. Through the "Mobility Pack" coming from Brussels, Paris will be obligated to open regional train travel to competition from next year on. With a highly inefficient public service in this area, the SNCF is right to be worried about the potential price competition on its major lines.As of now, the service is confronted with the fiscal burden of both massive debts and deficits. Given the monopoly on all transport lines, this is actually a phenomenal "achievement.” It truly takes a government-run system to produce services that operate this poorly. And yet, SNCF employees seem determined not to let the government change a thing. Out of spite, the union plans to run fewer trains than normal until June. However, when the decision to reduce the number of operating trains was made, the union didn’t consider how that might affect their own cause.
After planning a rally in support of these new changes, the union realized that the lack of trains meant fewer people had access to the transportation needed to attend the rally. One union leader commented on this, saying:
For this rally, we thought about everything, except the fact that the trains weren't running.You couldn't make it up.
The strikes in the public railway sector are paired with equally intrusive strike actions on France's publicly held airline AirFrance. After more than nine days of strikes, the board had suggested a deal to the union: 2 percent of salary increase in 2018, then a 5 percent over a period of three years. The union responded by demanding an immediate 5 percent increase and announced that the strike would continue.
With AirFrance being one of the few airlines that connect the country by air, and with almost all train lines paralyzed, the behavior of the AirFrance union seems deliberately coordinated. This trade union behavior only seems confirmed by the fact that in a number of cities, union activists blocked the inter-city buses run by private companies. The German bus travel provider Flixbus had seen a massive spike in reservations following the strikes, and even ran ads online, saying "during the strike, take Flixbus!"
Being the second-largest strike-friendly country in Europe with 125 days of strikes per 1,000 employees is one thing. Blocking the access of private companies which are merely trying to get people to their workplaces, that is having true resentment for those who work.
Universities Blocked by Their Own Students
While paid employees decide not to show up for work, unpaid people also go on strike. A number of French universities, notably that of the Sorbonne University in Paris, are being occupied by their own students. Radicalized students are blocking the entrance for professors and other students and hold general assemblies in which they "vote" regularly on continuing their protest.What are they protesting against? They oppose the government's new "Law for the orientation and success of students" (ORE), through which the Macron administration suggests to select students more through their performance in high school. Until now, no qualifications apart from a baccalaureate were needed to get accepted to a university. This, paired with the fact that French students pay virtually no tuition fees and benefit from large student and housing subsidies, has made faculties considerably over-crowded.
At a large student protest in the streets of Toulouse, one interviewed student bemoaned the fact that new reforms could lead universities "to choose the students it prefers" and that students that performed better would have better chances.
The mere notion of merit seems absolutely foreign to French students. Any form of merit-based system is antithetical to their convictions, which have been built over years on three premises:
- The government's responsibility is to make people more equal
- Government interventionism improves society
- There is a social heritage (welfare) that needs to be protected no matter what
Why the Upset? Don't They Already Have Socialism?
The reforms on public rail and in the realm of universities are minimal reforms compared to what France would actually need. The protests are more of a power play by trade unions and student groups, to see how far they can push the Macron administration. And in fact, they notice that they can indeed push very far. Strikes that began in early April are still continuing right now.But why isn't a society built on this social-egalitarian mantra promoted by what Bernie Sanders calls "democratic socialism" (we still call it socialism in Europe), so discontent with its benefits? French people get all the perks that the Vermont senator asks for, including government-run health care, pension systems, tuition-free universities. And yet, they spend a fifth of their work-time on the streets, bemoaning the overtaking of the "neoliberal order."
Here's the truth: there is no end goal in socialism but to take more and more. No demand is big enough, no social welfare program extensive enough. If you believe that you could satisfy those who argue for any kind of social welfare program by giving it to them, is fundamentally mistaken. On the same side, the result is more devastating for the poorest in society, with larger unemployment, and economic opportunities. Those who fail are unanimously seen as victims of the capitalist system, and those who succeed must have done so through vicious greed and reckless exploitation.
This is why the innovators and creators of the world reside in the United States, and not in France.
So you want to be more like France?
Bill Wirtz
Bill Wirtz is a Young Voices Advocate. His work has been featured in several outlets, including Newsweek, Rare, RealClear, CityAM, Le Monde and Le Figaro. He also works as a Policy Analyst for the Consumer Choice Center.
This article was originally published on FEE.org. Read the original article.
Monday, April 23, 2018
Friday, April 20, 2018
Why a Facelift Costs Less Than a Knee Replacement
Why a Facelift Costs Less Than a Knee Replacement
Between 1998 and 2017 prices for “Medical Care Services” in the US (as measured by the BLS’s CPI for Medical Care Services) more than doubled (+105.3 percent increase) while the CPI for “Hospital and Related Services” (data here) nearly tripled (+189.3 percent increase). Those increases in the costs of medical-related services compared to only a 50.3 percent increase in overall consumer prices over that period (BLS data here). On an annual basis, the costs of medical care services in the US have increased almost 4 percent per year since 1998 and the cost of hospital services increased annually by 5.8 percent.
In contrast, overall inflation averaged only 2.2 percent annually over that period. The only consumer product or service that has increased more than medical care services and about the same as hospital costs over the last several decades is college tuition and fees, which have increased nearly 6 percent annually since 1998 for public universities.
One of the reasons that the costs of medical care services in the US have increased more than twice as much as general consumer prices since 1998 is that a large and increasing share of medical costs are paid by third parties (private health insurance, Medicare, Medicaid, Department of Veterans Affairs, etc.) and only a small and shrinking percentage of health care costs are paid out-of-pocket by consumers. According to government data, almost half (47.6 percent) of health care expenditures in 1960 were paid by consumers out-of-pocket and by 2017 that share of expenditures has fallen to only 10.6 percent (see chart above).
How would the market for medical services operate differently if prices were transparent and consumers were paying out-of-pocket for medical procedures in a competitive market? Well, we can look to the $16 billion US market for elective cosmetic surgery for some answers. In every year since 1997, the American Society for Aesthetic Plastic Surgery has issued an annual report on cosmetic procedures in the US (both surgical and nonsurgical) that includes the number of procedures, the average cost per procedure (starting in 1998), the total spending per procedure, and the age and gender distribution for each procedure. Here is a link to the press release for the 2017 report, and the full report is available here.
The table above (click to enlarge) displays the 20 cosmetic procedures that were available in both 1998 and 2017, the average prices for those procedures in each year (in current dollars), the number of each of those procedures performed in those two years, and the percent increase in average price for each procedure between 1998 and 2017. The procedures are ranked by the number of cosmetic procedures last year. Here are some interesting findings from this year’s report and the table above:
Providers operate in a very competitive market with transparent pricing and therefore have incentives to provide cosmetic procedures at competitive prices. Those providers are also less burdened and encumbered by the bureaucratic paperwork that is typically involved with the provision of most standard medical care with third-party payments.
Because of the price transparency and market competition that characterizes the market for cosmetic procedures, the prices of most cosmetic procedures have fallen in real terms since 1998, and some non-surgical procedures have even fallen in nominal dollars before adjusting for price changes. In all cases, cosmetic procedures have increased in price by far less than the 105 percent increase in the price of medical care services between 1998 and 2017 and the 189 percent increase in hospital services. In summary, the market for cosmetic surgery operates very much like other competitive markets with the same expected results: falling real prices over time for most cosmetic procedures.
If cosmetic procedures were covered by third-party payers like insurance companies, Medicare, and Medicaid, what would have happened to their prices over time? Basic economics tells us that those prices would have most likely risen at about the same 105.3 percent increase in the prices of medical services in general between 1998 and 2017.
The main economic lesson here is that the greater the degree of market competition, price transparency, and out-of-pocket payments, the more constrained prices are, in health care or any other sector of the economy. Another important economic lesson is that the greater the degree of government intervention, opaque prices, and third-party payments, the less constrained prices are, in health care or any other sector of the economy. Some important lessons to consider as we attempt to reform national health care... once again.
Mark J. Perry
Mark J. Perry is a scholar at the American Enterprise Institute and a professor of economics and finance at the University of Michigan’s Flint campus.
In contrast, overall inflation averaged only 2.2 percent annually over that period. The only consumer product or service that has increased more than medical care services and about the same as hospital costs over the last several decades is college tuition and fees, which have increased nearly 6 percent annually since 1998 for public universities.
Spending Unknown Amounts of Unseen Money
It’s no big surprise that overall health care costs have continued to rise over time as the share of third-party payments has risen to almost 90 percent and the out-of-pocket share approaches 10 percent. Consumers of health care have significantly reduced incentives to monitor prices and be cost-conscious buyers of medical and hospital services when they pay only about 10 percent themselves, and the incentives of medical care providers to hold costs down are greatly reduced knowing that their customers aren’t paying out of pocket and aren’t price sensitive.How would the market for medical services operate differently if prices were transparent and consumers were paying out-of-pocket for medical procedures in a competitive market? Well, we can look to the $16 billion US market for elective cosmetic surgery for some answers. In every year since 1997, the American Society for Aesthetic Plastic Surgery has issued an annual report on cosmetic procedures in the US (both surgical and nonsurgical) that includes the number of procedures, the average cost per procedure (starting in 1998), the total spending per procedure, and the age and gender distribution for each procedure. Here is a link to the press release for the 2017 report, and the full report is available here.
- For the top seven most popular cosmetic procedures displayed above for last year, none of them increased in price since 1998 more than the 50.3 percent increase in overall consumer prices, meaning that the real, inflation-adjusted price of all ten of those procedures has fallen over the last 19 years. Only four of the 20 cosmetic procedures (facelift, nose surgery, upper arm lift, and chin augmentation) increased more than the overall CPI, while the other 16 procedures increased less than overall consumer prices.
- For three of the most popular nonsurgical procedures in 2017—botox injection, chemical peel and laser hair removal—the nominal prices have either fallen over the last 19 years, by nearly 1 percent for botox (from $424 to $420) and by more than 33 percent for chemical peel (from $821 to $545), or barely increased (1.1 percent increase in laser hair removal from $452 to $457). Note also that the demand for two of those procedures has increased dramatically—botox procedures increased by nearly ten times and laser hair removal by 63 percent.
- The two most popular surgical cosmetic procedures last year were breast augmentation and liposuction, which have increased in current dollar prices by 25.5 percent and 28.0 percent respectively since 1998. Both of those average price increases were roughly half of the 50.3 percent increase in consumer prices over the last 19 years, meaning that the real, inflation-adjusted prices for breast augmentation and liposuction procedures have fallen since 1998—by 17 percent for breast augmentation and by 15 percent for liposuction.
- The unweighted average price increase between 1998 and 2017 for the 20 cosmetic procedures displayed above was 34.2 percent, which is far below the 50.3 percent increase in consumer prices in general over the last 19 years. When the average procedure prices are weighted by the number of procedures performed last year, the average price increase since 1998 is only 12.6 percent. Of the 20 procedures above, 16 increased in price by less than overall inflation (and therefore decreased in real terms) since 1998, and only four increased in price by more than inflation (facelift, nose surgery, upper arm lift, and chin augmentation).
- And most importantly, none of the 20 cosmetic procedures in the table above have increased in price by anywhere close to the 105.3 percent increase in the price of medical care services or the 189.3 percent increase in hospital services since 1998. The largest cosmetic procedure price increase since 1998 was the nearly 83 percent increase for chin augmentation, which is still far below the more than doubling of prices for medical services overall and nearly three-fold increase in the CPI for hospital services.
- As in previous years, there was a huge gender imbalance for cosmetic procedures in 2017—women accounted for 91.3 percent of the 4.78 million total cosmetic procedures performed last year (92.3 percent of surgical procedures and 90.8 percent of non-surgical procedures.
What Does This Mean?
The competitive market for cosmetic procedures operates differently than the traditional market for health care in important and significant ways. Cosmetic procedures, unlike most medical services, are not usually covered by insurance. Patients paying 100 percent out-of-pocket for elective cosmetic procedures are cost-conscious and have strong incentives to shop around and compare prices at the dozens of competing providers in any large city.Providers operate in a very competitive market with transparent pricing and therefore have incentives to provide cosmetic procedures at competitive prices. Those providers are also less burdened and encumbered by the bureaucratic paperwork that is typically involved with the provision of most standard medical care with third-party payments.
Because of the price transparency and market competition that characterizes the market for cosmetic procedures, the prices of most cosmetic procedures have fallen in real terms since 1998, and some non-surgical procedures have even fallen in nominal dollars before adjusting for price changes. In all cases, cosmetic procedures have increased in price by far less than the 105 percent increase in the price of medical care services between 1998 and 2017 and the 189 percent increase in hospital services. In summary, the market for cosmetic surgery operates very much like other competitive markets with the same expected results: falling real prices over time for most cosmetic procedures.
If cosmetic procedures were covered by third-party payers like insurance companies, Medicare, and Medicaid, what would have happened to their prices over time? Basic economics tells us that those prices would have most likely risen at about the same 105.3 percent increase in the prices of medical services in general between 1998 and 2017.
The main economic lesson here is that the greater the degree of market competition, price transparency, and out-of-pocket payments, the more constrained prices are, in health care or any other sector of the economy. Another important economic lesson is that the greater the degree of government intervention, opaque prices, and third-party payments, the less constrained prices are, in health care or any other sector of the economy. Some important lessons to consider as we attempt to reform national health care... once again.
Reprinted from the American Enterprise Institute.
Mark J. Perry
Mark J. Perry is a scholar at the American Enterprise Institute and a professor of economics and finance at the University of Michigan’s Flint campus.
This article was originally published on FEE.org. Read the original article.
Wednesday, April 18, 2018
King George III Would Have Loved Today’s Gun Control Movement
King George III Would Have Loved Today’s Gun Control Movement
The only "common sense gun control" that its advocates are eventually going to agree on is to take your guns away. And you won't get them back. How do I know that? That's exactly what they did in Europe.
Much has been said in recent week in the United States about "common sense gun control," and not being a U.S resident is likely going to get me a great deal of vitriol. After all, it happens to be a regular occurrence that when Europeans comment on the American gun debate, they do so with a big deal of ignorance about both guns, gun culture, and the United States as a whole. A noticeable difference in history education between my American friends and myself was that we weren't taught American independence as something fundamentally important, but as more of yet another lost war in European history. You win some, you lose some. That this loss has brought about one of the most fundamental state philosophies of freedom goes unnoticed in the European education system.
The fact that American revolutionaries stood up to the tyrannical rule of the British Empire, especially that they were up against an experienced military that was feared on the European continent, is important. Their bravery to take up arms against an oppressor is exactly what drove the French Revolution. Its decision to include the values of individual liberty in its founding documents was shared by the French revolutionaries as well, as they did with the Declaration of the Rights of Man and of the Citizen in 1789, the same year that the Bill of Rights was written.
The fact that the United States enshrined the right to keep and bear arms is because the Founding Fathers drew the right conclusions from the revolution they had undertaken. Their move was bold and protective, and it was the correct one. While the Founders were building a minimal state that protected the freedom of its citizens, the French Revolution resulted in the so-called Reign of Terror in which anti-monarchists rounded up and executed those who had supported the King. They were able to because they were facing an unarmed populace.
What is even more interesting is that modern-day gun control advocates agree with this analysis. One of their more regular responses is that "the Bill of Rights was written at a very different time," admitting that it had its legitimacy then. If it had legitimacy back then because King George III of the United Kingdom could decide to overthrow the revolutionaries in an attempt to regain his territory and because the threat of new government becoming tyrannical was real, then what has changed? Is the United States immune to a foreign attack? Is government unable to become tyrannical? The Second Amendment might be old, but the concerns it expressed are just as accurate today as they were in the 18th century.
Saying that the circumstances don't allow the common man to own a firearm anymore is probably what King George III would have claimed as well. He would certainly have sympathized with people who are more suspicious of their own neighbors than those in the political offices far away from their homes. The exploitation of a tragedy for the gain of governmental control has repeatedly lead to authoritarian regimes.
Look to Europe if you're interested where the gun control advocates will lead you: the European Union adopted even tougher gun control measures last year.
In most European countries, the administrative burden of going through the process to even own a gun paired with the associated costs makes it impossible for a large number of people to become firearm owners. Owning a gun makes you a rare breed of people. Believing in people's right to carry guns makes you a dying species.
Interestingly, the idea that a trained civilian can save lives if in possession of a gun seems to be accepted by France, which allowed off-duty police officers to carry their guns after the terrorist attacks in 2015. The narrative is much less about the use of guns than about a state-monopoly of its use. Once again, King George III would agree.
Once governments have normalized a disarmed populace, it will be virtually impossible to regain the principle of responsible gun ownership as a debate in the houses of democracy, and even less in the minds of the man in the street.
Bill Wirtz
Bill Wirtz is a Young Voices Advocate. His work has been featured in several outlets, including Newsweek, Rare, RealClear, CityAM, Le Monde and Le Figaro. He also works as a Policy Analyst for the Consumer Choice Center.
Much has been said in recent week in the United States about "common sense gun control," and not being a U.S resident is likely going to get me a great deal of vitriol. After all, it happens to be a regular occurrence that when Europeans comment on the American gun debate, they do so with a big deal of ignorance about both guns, gun culture, and the United States as a whole. A noticeable difference in history education between my American friends and myself was that we weren't taught American independence as something fundamentally important, but as more of yet another lost war in European history. You win some, you lose some. That this loss has brought about one of the most fundamental state philosophies of freedom goes unnoticed in the European education system.
The fact that American revolutionaries stood up to the tyrannical rule of the British Empire, especially that they were up against an experienced military that was feared on the European continent, is important. Their bravery to take up arms against an oppressor is exactly what drove the French Revolution. Its decision to include the values of individual liberty in its founding documents was shared by the French revolutionaries as well, as they did with the Declaration of the Rights of Man and of the Citizen in 1789, the same year that the Bill of Rights was written.
The fact that the United States enshrined the right to keep and bear arms is because the Founding Fathers drew the right conclusions from the revolution they had undertaken. Their move was bold and protective, and it was the correct one. While the Founders were building a minimal state that protected the freedom of its citizens, the French Revolution resulted in the so-called Reign of Terror in which anti-monarchists rounded up and executed those who had supported the King. They were able to because they were facing an unarmed populace.
What is even more interesting is that modern-day gun control advocates agree with this analysis. One of their more regular responses is that "the Bill of Rights was written at a very different time," admitting that it had its legitimacy then. If it had legitimacy back then because King George III of the United Kingdom could decide to overthrow the revolutionaries in an attempt to regain his territory and because the threat of new government becoming tyrannical was real, then what has changed? Is the United States immune to a foreign attack? Is government unable to become tyrannical? The Second Amendment might be old, but the concerns it expressed are just as accurate today as they were in the 18th century.
Saying that the circumstances don't allow the common man to own a firearm anymore is probably what King George III would have claimed as well. He would certainly have sympathized with people who are more suspicious of their own neighbors than those in the political offices far away from their homes. The exploitation of a tragedy for the gain of governmental control has repeatedly lead to authoritarian regimes.
The Power of Government
The essential question about government power isn't who should wield it, but who could wield it. If there is the possibility of a tyrant gaining access to the highest offices (and according to many Americans, that is already the case), then wouldn't you want constitutional provisions protecting you against that? The idea of tilting the balance between liberty and complete control as much as possible to liberty is because the people who have access to power are dangerous, whether they have good intentions or not.Look to Europe if you're interested where the gun control advocates will lead you: the European Union adopted even tougher gun control measures last year.
Some dangerous semi-automatic firearms have now been added to category A and are therefore prohibited for civilian use. This is the case for short semi-automatic firearms with loading devices over 20 rounds and long semi-automatic firearms with loading devices over 10 rounds. Similarly, long firearms that can be easily concealed, for example by means of a folding or telescopic stock, are also now prohibited."The Union also enhanced control of the supervision of firearm owners as well as the sale of guns, even if they are merely deactivated objects for collectors. When the United States focuses the gun ban debate on AR-15s after a shooting is committed with this firearm, then there seems to be a reasonable connection to be drawn. In this case, the EU regulated firearms which weren't used in the terrorist attacks in Brussels or Paris, yet it used those attacks as a reason to tighten controls. This shows that gun control advocates don't actually need a connection to the act in question in order to argue for less gun accessibility.
In most European countries, the administrative burden of going through the process to even own a gun paired with the associated costs makes it impossible for a large number of people to become firearm owners. Owning a gun makes you a rare breed of people. Believing in people's right to carry guns makes you a dying species.
Interestingly, the idea that a trained civilian can save lives if in possession of a gun seems to be accepted by France, which allowed off-duty police officers to carry their guns after the terrorist attacks in 2015. The narrative is much less about the use of guns than about a state-monopoly of its use. Once again, King George III would agree.
The Slippery Slope Is Real
Americans should be aware that the notion of "banning all guns" is not just a concept by conservative radio show hosts to rally people against politicians, but it's very much what the state will do if constitutional protections are removed. This is why the Czech Republic, a relatively gun-friendly country, has seen legislative initiatives to constitutionally enshrine gun rights in order to serve as a protection against decisions by the European Union. Once launched, the legislative avalanche of anti-gun rights laws are hard to stop: EU legislators pass the bills as fast as they get suggested. The debates on the issue are minimal.Once governments have normalized a disarmed populace, it will be virtually impossible to regain the principle of responsible gun ownership as a debate in the houses of democracy, and even less in the minds of the man in the street.
Bill Wirtz
Bill Wirtz is a Young Voices Advocate. His work has been featured in several outlets, including Newsweek, Rare, RealClear, CityAM, Le Monde and Le Figaro. He also works as a Policy Analyst for the Consumer Choice Center.
This article was originally published on FEE.org. Read the original article.
Tuesday, April 17, 2018
Monday, April 16, 2018
Gun Control Advocates Are Finally Admitting What They Really Want
Gun Control Advocates Are Finally Admitting What They Really Want
I don’t own an AR-15. I’m not a “gun person,” whatever that means. I hardly ever shoot. And I never hunt.
But I’m nonetheless a big supporter of private gun ownership. In part, this is because I have a libertarian belief in civil liberties. In other words, my default assumption is that people should have freedom (the notion of “negative liberty“), whereas many folks on the left have a default assumption that the state should determine what’s allowed.
I’m sometimes asked, though, whether supporters of the 2nd Amendment are too rigid. Shouldn’t the NRA and other groups support proposals for “common-sense gun safety”?
Some of these gun-control ideas may even sound reasonable, but they all suffer from a common flaw. None of them would disarm criminals or reduce gun crime. And I’ve detected a very troubling pattern, namely that when you explain why these schemes won’t work, the knee-jerk response from the anti-gun crowd is that we then need greater levels of control. Indeed, if you press them on the issue, they’ll often admit that their real goal is gun confiscation.
Though most folks in leadership positions on the left are crafty enough that they try to hide this extreme view.
So that’s why—in a perverse way—I want to applaud John Paul Stevens, the former Supreme Court Justice, for his column in the New York Times that openly and explicitly argues for the repeal of the 2nd Amendment.
Many—if not most—people on the left want that outcome. And a growing number of them are coming out of the pro-confiscation closet. In an article for Commentary, Noah Rothman links to several articles urging repeal of the 2nd Amendment.
Indeed, they even want to hide the views of their fellow travelers. Chris Cuomo, who has a show on MSNBC, preposterously asserted that nobody supports repeal of the 2nd Amendment.
But let’s set aside the politics and look at the legal issues. There’s another reason why I’m perversely happy about the Stevens op-ed. Even though he was on the wrong side of the case, he effectively admits that the 2008 Heller decision enshrined and upheld the individual right to own firearms.
And the five Justices who out-voted Stevens made the right decision. I’m not a legal expert, so I’ll simply cite some people who are very competent to discuss the issue. Starting with what Damon Root wrote for Reason.
Though the real hero of this story is probably Joyce Lee Malcolm, the scholar whose work was instrumental in producing the Heller decision. John Miller explains for National Review.
And I suppose it’s also worth mentioning that it won’t be easy to ban and confiscate guns if they ever succeeded in weakening the Bill of Rights. But hopefully, we’ll never get to that stage.
Daniel J. Mitchell is a Washington-based economist who specializes in fiscal policy, particularly tax reform, international tax competition, and the economic burden of government spending. He also serves on the editorial board of the Cayman Financial Review.
But I’m nonetheless a big supporter of private gun ownership. In part, this is because I have a libertarian belief in civil liberties. In other words, my default assumption is that people should have freedom (the notion of “negative liberty“), whereas many folks on the left have a default assumption that the state should determine what’s allowed.
I’m sometimes asked, though, whether supporters of the 2nd Amendment are too rigid. Shouldn’t the NRA and other groups support proposals for “common-sense gun safety”?
Some of these gun-control ideas may even sound reasonable, but they all suffer from a common flaw. None of them would disarm criminals or reduce gun crime. And I’ve detected a very troubling pattern, namely that when you explain why these schemes won’t work, the knee-jerk response from the anti-gun crowd is that we then need greater levels of control. Indeed, if you press them on the issue, they’ll often admit that their real goal is gun confiscation.
Though most folks in leadership positions on the left are crafty enough that they try to hide this extreme view.
So that’s why—in a perverse way—I want to applaud John Paul Stevens, the former Supreme Court Justice, for his column in the New York Times that openly and explicitly argues for the repeal of the 2nd Amendment.
…demonstrators should…demand a repeal of the Second Amendment. …that amendment…is a relic of the 18th century. …to get rid of the Second Amendment would be simple and would do more to weaken the N.R.A.’s ability to stymie legislative debate and block constructive gun control legislation than any other available option. …That simple but dramatic action would…eliminate the only legal rule that protects sellers of firearms in the United States.The reason I’m semi-applauding Stevens is that he’s an honest leftist. He’s bluntly urging that we jettison part of the Bill of Rights.
Many—if not most—people on the left want that outcome. And a growing number of them are coming out of the pro-confiscation closet. In an article for Commentary, Noah Rothman links to several articles urging repeal of the 2nd Amendment.
They’re talking about repealing the Second Amendment. It started with former Supreme Court Justice John Paul Stevens and George Washington University Law Professor Jonathan Turley. …Turley and Stevens were joined this week by op-ed writers in the pages of Esquire and the Seattle Times. Democratic candidates for federal office have even enlisted in the ranks of those calling for an amendment to curtail the freedoms in the Bill of Rights. …anti-Second Amendment themes…have been expressed unashamedly for years, from liberal activists like Michael Moore to conservative opinion writers at the New York Times. Those calling for the repeal of the right to bear arms today are only echoing similar calls made years ago in venues ranging from Rolling Stone, MSNBC, and Vanity Fair to the Jesuit publication America Magazine.But others on the left prefer to hide their views on the issue.
Indeed, they even want to hide the views of their fellow travelers. Chris Cuomo, who has a show on MSNBC, preposterously asserted that nobody supports repeal of the 2nd Amendment.
One of the biggest threats to the recovery of the Democratic Party these days is overreach. …But rarely do we see such an unhelpful, untimely and fanciful idea as the one put forward by retired Supreme Court justice John Paul Stevens. …Stevens calls for a repeal of the Second Amendment. The move might as well be considered an in-kind contribution to the National Rifle Association, to Republicans’ efforts to keep the House and Senate in 2018, and to President Trump’s 2020 reelection bid. In one fell swoop, Stevens has lent credence to the talking point that the left really just wants to get rid of gun ownership. …This is exactly the kind of thing that motivates the right and signals to working-class swing voters that perhaps the Democratic Party and the political left doesn’t really get them.The bottom line is that the left’s ultimate goal is gutting the 2nd Amendment. Not much doubt of that, even if some leftists are politically savvy enough to understand that their extremist policy is politically suicidal.
But let’s set aside the politics and look at the legal issues. There’s another reason why I’m perversely happy about the Stevens op-ed. Even though he was on the wrong side of the case, he effectively admits that the 2008 Heller decision enshrined and upheld the individual right to own firearms.
And the five Justices who out-voted Stevens made the right decision. I’m not a legal expert, so I’ll simply cite some people who are very competent to discuss the issue. Starting with what Damon Root wrote for Reason.
One problem with Stevens’ position is that he is dead wrong about the legal history. …For example, consider how the Second Amendment was treated in St. George Tucker’s 1803 View of the Constitution of the United States, which was the first extended analysis and commentary published about the Constitution. For generations of law students, lawyers, and judges, Tucker’s View served as a go-to con-law textbook. …He observed the debates over the ratification of the Constitution and the Bill of Rights as they happened. And he had no doubt that the Second Amendment secured an individual right of the “nonmilitary” type. “This may be considered as the true palladium of liberty,” Tucker wrote of the Second Amendment. “The right of self-defense is the first law of nature.” In other words, the Heller majority’s view of the Second Amendment is as old and venerable as the amendment itself.Well stated.
Though the real hero of this story is probably Joyce Lee Malcolm, the scholar whose work was instrumental in producing the Heller decision. John Miller explains for National Review.
Malcolm looks nothing like a hardened veteran of the gun-control wars. Small, slender, and bookish, she’s a wisp of a woman who enjoys plunging into archives and sitting through panel discussions at academic conferences. Her favorite topic is 17th- and 18th-century Anglo-American history… She doesn’t belong to the National Rifle Association, nor does she hunt. …She is also the lady who saved the Second Amendment—a scholar whose work helped make possible the Supreme Court’s landmark Heller decision, which in 2008 recognized an individual right to possess a firearm.Ms. Malcolm started as a traditional academic.
For her dissertation, she moved to Oxford and Cambridge, with children in tow. …Malcolm’s doctoral dissertation focused on King Charles I and the problem of loyalty in the 1640s… The Royal Historical Society published her first book.But her subsequent research uncovered some fascinating insights about the right to keep and bear arms.
At a time when armies were marching around England, ordinary people became anxious about surrendering guns. Then, in 1689, the English Bill of Rights responded by granting Protestants the right to “have Arms for their Defence.” Malcolm wasn’t the first person to notice this, of course, but as an American who had studied political loyalty in England, she approached the topic from a fresh angle. “The English felt a need to put this in writing because the king had been disarming his political opponents,” she says. “This is the origin of our Second Amendment. It’s an individual right.” …Fellowships allowed her to pursue her interest in how the right to bear arms migrated across the ocean and took root in colonial America. “The subject hadn’t been done from the English side because it’s an American question, and American constitutional scholars didn’t know the English material very well,” she says. …The Second Amendment, she insisted, recognizes an individual right to gun ownership as an essential feature of limited government. In her book’s preface, she called this the “least understood of those liberties secured by Englishmen and bequeathed to their American colonists.”And it turns out that careful scholarship can produce profound results.
…in 2008, came Heller, arguably the most important gun-rights case in U.S. history. A 5–4 decision written by Scalia and citing Malcolm three times, it swept away the claims of gun-control theorists and declared that Americans enjoy an individual right to gun ownership. “…it gave us this substantial right.” She remembers a thought from the day the Court ruled: “If I have done nothing else my whole life, I have accomplished something important.” …the right to bear arms will not be infringed—thanks in part to the pioneering scholarship of Joyce Lee Malcolm.Let’s close with a video from Prager University, narrated by Eugene Volokh, a law professor at UCLA. He explains the legal and historical meaning of the 2nd Amendment.
In other words, the bottom line is that the Justice Stevens op-ed and other honest leftists are right. The 2nd Amendment would need to be repealed in order to impose meaningful gun control.
And I suppose it’s also worth mentioning that it won’t be easy to ban and confiscate guns if they ever succeeded in weakening the Bill of Rights. But hopefully, we’ll never get to that stage.
Reprinted from International Liberty.
Daniel J. Mitchell
Daniel J. Mitchell is a Washington-based economist who specializes in fiscal policy, particularly tax reform, international tax competition, and the economic burden of government spending. He also serves on the editorial board of the Cayman Financial Review.This article was originally published on FEE.org. Read the original article.
Friday, April 13, 2018
Thursday, April 12, 2018
Wednesday, April 11, 2018
Why the UK Chooses Free Trade
Why the UK Chooses Free Trade
In a few short weeks, Britain will begin negotiations with the EU on how we will trade in the years ahead; in the next three years, the return of Britain’s capacity for self-government will give us the chance to trade freely with the rest of the world once more. To grasp these opportunities will require confident choices.
Sir Kenneth Clarke wrote that it is a lack of confidence, more than anything else, that kills a civilization. It would be hard to say Greece within the Eurozone, for example, is not a case in point. Countries often forget the attitudes that made them flourish: bad choices may follow leadership, and too many bad choices means demise. Freeing trade is one of the confident choices we must now make.
Today, what a country like Britain does most efficiently is neither shoemaking nor tailoring, but the production of knowledge-intensive services. Yet these are increasingly at risk. The arrival of the “MiFID II” regulations in the City shows how EU rules are now so burdensome that, just weeks after the imposition of this 7,000-page set of regulations, firms are already moving business elsewhere (witness the InterContinental Exchange moving trades to the US). To apply Smith’s insight today must mean not only removing tariffs but being able to make our own, pro-competitive, regulation. Our inability to do so is already destroying prosperity.
Adam Smith also knew that economies thrived on their values. And free trade is part of the greatest of these, democracy. It was no coincidence that Britain’s Corn Laws, the tariffs on imported grain which the landowning aristocracy generally supported, could only be repealed in 1846, after the Great Reform Act gave the vote to so many who had been made hungry by them.
Because the mercantilist alternative keeps incumbents at the top and tends to prevent the emergence of innovative challenger firms, growth is reduced, which in a developed country is largely the fruit of innovation. In Britain, regional inequality also follows, as big corporates, disproportionately in the southeast of England, outflank smaller firms elsewhere. This limited freedom and stalled prosperity has become the status quo.
So Brexit has arrived at a critical time. Global economic output has slowed and trade as a share of GDP has fallen. It is not inevitable that the world’s wealth will keep growing: we forget at our peril that poverty typifies the human experience. Through the span of human history, very few states have achieved any economic growth. Prosperity is only achieved following specific choices, which need urgently to be re-made. This means choosing a self-governing, free, and free-trading state, setting rules and regulations ourselves. If Britain, and other Western countries, do not find the confidence to do this, they will lapse back into the normal state of mankind: prosperity only for elites, who maintain their grip by curtailing freedoms.
Radomir Tylecote
Dr. Radomir Tylecote is Senior Research Analyst of the Legatum Institute's Special Trade Commission.
Sir Kenneth Clarke wrote that it is a lack of confidence, more than anything else, that kills a civilization. It would be hard to say Greece within the Eurozone, for example, is not a case in point. Countries often forget the attitudes that made them flourish: bad choices may follow leadership, and too many bad choices means demise. Freeing trade is one of the confident choices we must now make.
Free Trade Generates Wealth
In The Wealth of Nations of 1776, Adam Smith first uncovered why freeing trade can generate wealth for all parties involved, because countries could export what they make efficiently and import what they cannot:The tailor does not attempt to make his own shoes, but buys them off the shoemaker. The shoemaker does not attempt to make his own clothes, but employs a tailor… What is prudence in the conduct of every private family can scarcely be folly in that of a great kingdom.In our day, this means that by allowing farmers in the developing world, for example, to import without tariffs results in higher incomes for them and cheaper food for Britain’s poor. To trade freely, then, is to choose real social justice. Smith also showed how it is still worth choosing free trade even if we don’t expect reciprocation: a country gains just by importing things made more cheaply by others.
Today, what a country like Britain does most efficiently is neither shoemaking nor tailoring, but the production of knowledge-intensive services. Yet these are increasingly at risk. The arrival of the “MiFID II” regulations in the City shows how EU rules are now so burdensome that, just weeks after the imposition of this 7,000-page set of regulations, firms are already moving business elsewhere (witness the InterContinental Exchange moving trades to the US). To apply Smith’s insight today must mean not only removing tariffs but being able to make our own, pro-competitive, regulation. Our inability to do so is already destroying prosperity.
Adam Smith also knew that economies thrived on their values. And free trade is part of the greatest of these, democracy. It was no coincidence that Britain’s Corn Laws, the tariffs on imported grain which the landowning aristocracy generally supported, could only be repealed in 1846, after the Great Reform Act gave the vote to so many who had been made hungry by them.
Limited Freedom
But in the EU today, the man on the street finds his Parliament no longer has the authority—the sovereignty—to repeal the modern equivalents, like the Common Agricultural Policy. The free trade cause, whose defense a century ago drew tens of thousands to the streets, has been taken from the people’s hands and given to technocrats. Because free trade depended on popular representation in Parliament is why technocrats in undemocratic systems, from Brussels to Beijing, have tended to choose protectionism instead. In these systems, leaders keep subsidies and favors flowing to client groups who are protected by tariffs and regulation designed to favor incumbents—and from incumbents, these elites expect support. So it is free trade that reminds us that the building block of true internationalism is the democratic nation-state itself.Because the mercantilist alternative keeps incumbents at the top and tends to prevent the emergence of innovative challenger firms, growth is reduced, which in a developed country is largely the fruit of innovation. In Britain, regional inequality also follows, as big corporates, disproportionately in the southeast of England, outflank smaller firms elsewhere. This limited freedom and stalled prosperity has become the status quo.
So Brexit has arrived at a critical time. Global economic output has slowed and trade as a share of GDP has fallen. It is not inevitable that the world’s wealth will keep growing: we forget at our peril that poverty typifies the human experience. Through the span of human history, very few states have achieved any economic growth. Prosperity is only achieved following specific choices, which need urgently to be re-made. This means choosing a self-governing, free, and free-trading state, setting rules and regulations ourselves. If Britain, and other Western countries, do not find the confidence to do this, they will lapse back into the normal state of mankind: prosperity only for elites, who maintain their grip by curtailing freedoms.
We choose free trade, then, because that cannot be our future. In his great poem Ulysses, Tennyson imagined the Greek hero of the Odyssey, old in years but vowing once more to look out across the sea:Free exchange between free people is not just a good in itself, but makes people everywhere more prosperous. That is why, in 2018, Britain must choose free trade.
There lies the port; the vessel puffs her sail… Come, my friends, ‘T is not too late to seek a newer world.
Radomir Tylecote
Dr. Radomir Tylecote is Senior Research Analyst of the Legatum Institute's Special Trade Commission.
This article was originally published on FEE.org. Read the original article.
Tuesday, April 10, 2018
3 Facepalm Moments in Regulation
3 Facepalm Moments in Regulation
As a policy wonk, I mostly care about the overall impact of government on prosperity. So when I think about the effect of red tape, I’m drawn to big-pictures assessments of the regulatory burden.
Here are a few relevant numbers that get my juices flowing.
Most people don’t get excited about these macro-type calculations.
Instead, they’re far more likely to get agitated by regulations that make their daily lives a hassle. Such as:
Most people also are quite responsive to anecdotes about red tape. Simply stated, big-picture numbers are like a skeleton, while real-world examples put meat on the bones.
Today, let’s look at some absurd examples of the regulatory state in action.
We’ll start with bone-headed pizza regulation, as explained by the Wall Street Journal.
For our second example, we have a surreal story out of California.
Last but not least, our third example contains some jaw-dropping tidbits about red tape in a New York Times story.
Needless to say, this is not a system that encourages and enables entrepreneurship.
Which is why deregulation is a good idea (and Trump deserves credit for making a bit of progress in this area). We need some sensible cost-benefit analysis so that bureaucracies are focused on public health rather than mindless rules.
And it also would be a good idea in many cases to rely more on mutually reinforcing forms of private regulation.
Since I’m a self-confessed wonk, I’ll close by sharing this measure of the ever-growing burden of red tape. I realize it’s not as attention-grabbing as anecdotes and horror stories, but it is very relevant if we care about long-run growth and competitiveness.
P.P.S. I’ve used an apple orchard as an example when explaining why a tax bias against saving and investment makes no sense. I’ll now have to mention that the beleaguered orchard owner also has to deal with 5,000 regulatory restrictions.
Daniel J. Mitchell
Daniel J. Mitchell is a Washington-based economist who specializes in fiscal policy, particularly tax reform, international tax competition, and the economic burden of government spending. He also serves on the editorial board of the Cayman Financial Review.
Here are a few relevant numbers that get my juices flowing.
- Americans spend 8.8 billion hours every year filling out government forms.
- The economy-wide cost of regulation reached $1.75 trillion in 2010.
- For every bureaucrat at a regulatory agency, 100 jobs are lost in the economy’s productive sector.
- A World Bank study determined that moving from heavy regulation to light regulation “can increase a country’s average annual GDP per capita growth by 2.3 percentage points.”
- Regulatory increases since 1980 have reduced economic output by $4 trillion.
- The European Central Bank estimated that product market and employment regulation has led to costly “misallocation of labour and capital in eight macro-sectors,” and also found that reform could boost national income by more than six percent.
Most people don’t get excited about these macro-type calculations.
Instead, they’re far more likely to get agitated by regulations that make their daily lives a hassle. Such as:
- Inferior light bulbs
- Substandard toilets
- Inadequate washing machines
- Crummy dishwashers
- Dribbling showers
- Dysfunctional gas cans
Most people also are quite responsive to anecdotes about red tape. Simply stated, big-picture numbers are like a skeleton, while real-world examples put meat on the bones.
Today, let’s look at some absurd examples of the regulatory state in action.
We’ll start with bone-headed pizza regulation, as explained by the Wall Street Journal.
FDA released guidance for posting calorie disclosures at restaurants with more than 20 locations, and the ostensible point is to help folks choose healthier foods. The regulations…are an outgrowth of the 2010 Affordable Care Act… The reason some restaurants have spent years fighting these rules is not because executives lay awake at night plotting how to make Americans obese. It’s because the rules are loco. …Take pizza companies, which have to display per slice ranges or the number for the entire pie. Calories vary based on what you order—the barbarians who put pineapple on pizza are consuming fewer calories than someone who chooses pepperoni and extra cheese. But the number of pepperonis on a pizza depends on the pie’s size and whether someone also adds onions and sausage. ..The rules are so vague that companies could face a crush of lawsuits, which will be abetted by this “nonbinding” FDA guidance.By the way, you won’t be surprised to learn that academic researchers have found these types of rules have no effect on consumer choices.
A systematic review and meta-analysis determined the effect of restaurant menu labeling on calories and nutrients…were collected in 2015, analyzed in 2016, and used to evaluate the effect of nutrition labeling on calories and nutrients ordered or consumed. Before and after menu labeling outcomes were used to determine weighted mean differences in calories, saturated fat, total fat, carbohydrate, and sodium ordered/consumed… Menu labeling resulted in no significant change in reported calories ordered/consumed… Menu labeling away-from-home did not result in change in quantity or quality, specifically for carbohydrates, total fat, saturated fat, or sodium, of calories consumed among U.S. adults.Shocking, just shocking. Next thing you know, someone will tell us that Obamacare didn’t lower premiums for health insurance!
For our second example, we have a surreal story out of California.
A farmer faces trial in federal court this summer and a $2.8 million fine for failing to get a permit to plow his field and plant wheat in Tehama County. A lawyer for Duarte Nursery said the case is important because it could set a precedent requiring other farmers to obtain costly, time-consuming permits just to plow their fields. “The case is the first time that we’re aware of that says you need to get a (U.S. Army Corps of Engineers) permit to plow to grow crops,” said Anthony Francois, an attorney for the Pacific Legal Foundation. “We’re not going to produce much food under those kinds of regulations,” he said. …The Army did not claim Duarte violated the Endangered Species Act by destroying fairy shrimp or their habitat, Francois said. …Farmers plowing their fields are specifically exempt from the Clean Water Act rules forbidding discharging material into U.S. waters, Francois said.Wow, sort of reminds me of the guy who was hassled by the feds for building a pond on his own property. Or the family persecuted for building a house on their own property.
Last but not least, our third example contains some jaw-dropping tidbits about red tape in a New York Times story.
Indian Ladder Farms, a fifth-generation family operation near Albany, …sells homemade apple pies, fresh cider and warm doughnuts. …This fall, amid the rush of commerce—the apple harvest season accounts for about half of Indian Ladder’s annual revenue—federal investigators showed up. They wanted to check the farm’s compliance… Suddenly, the small office staff turned its focus away from making money to placating a government regulator. …The investigators hand delivered a notice and said they would be back the following week, when they asked to have 22 types of records available. The request included vehicle registrations, insurance documents and time sheets—reams of paper in all. …the Ten Eyck family, which owns the farm, along with the staff devoted about 40 hours to serving the investigators, who visited three times before closing the books. …This is life on the farm—and at businesses of all sorts. With thick rule books laying out food safety procedures, compliance costs in the tens of thousands of dollars and ever-changing standards from the government…, local produce growers are a textbook example of what many business owners describe as regulatory fatigue. …The New York Times identified at least 17 federal regulations with about 5,000 restrictions and rules that were relevant to orchards. …Mr. Ten Eyck…fluently speaks the language of government compliance, rattling off acronyms that consume his time and resources, including E.P.A. (Environmental Protection Agency), OSHA (Occupational Safety and Health Administration), U.S.D.A. (United States Department of Agriculture) and state and local offices, too, like A.C.D.O.H. (Albany County Department of Health).And here’s an infographic that accompanied the article.
Needless to say, this is not a system that encourages and enables entrepreneurship.
Which is why deregulation is a good idea (and Trump deserves credit for making a bit of progress in this area). We need some sensible cost-benefit analysis so that bureaucracies are focused on public health rather than mindless rules.
And it also would be a good idea in many cases to rely more on mutually reinforcing forms of private regulation.
Since I’m a self-confessed wonk, I’ll close by sharing this measure of the ever-growing burden of red tape. I realize it’s not as attention-grabbing as anecdotes and horror stories, but it is very relevant if we care about long-run growth and competitiveness.
P.P.S. I’ve used an apple orchard as an example when explaining why a tax bias against saving and investment makes no sense. I’ll now have to mention that the beleaguered orchard owner also has to deal with 5,000 regulatory restrictions.
Reprinted from International Liberty.
Daniel J. Mitchell
Daniel J. Mitchell is a Washington-based economist who specializes in fiscal policy, particularly tax reform, international tax competition, and the economic burden of government spending. He also serves on the editorial board of the Cayman Financial Review.
This article was originally published on FEE.org. Read the original article.
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