The US government has approved several firms’ plans for ferrying cargo between Florida and Cuba. Why haven’t people been ferrying goods to Cuba until now? Because any entrepreneur seeking to do such a thing faced heavy fines and even imprisonment under US federal law.
The acceleration of trade between Cubans and Americans represents and expansion of freedom in international trade, and also expands the boundaries of legal economic action under US federal law.
The Baltimore police now imply Freddie Gray’s arrest was necessary because he was carrying an illegal knife. But why are taxpayers paying the government to arrest people for carrying knives? What about the right to own and bear knives?
Mark Thornton discusses Ted Cruz’s new tax proposal, flat taxes, and proportional taxes on Newsmax TV.
Thornton examines the economic distortions caused by taxation, as well as the stated rationales and downsides of the many gimmicky new tax proposals that have arisen in recent decades.
Janet Yellen was answering at the “Finance and Society” conference in Washington DC from Christine Lagarde, the Director of the International Monetary Fund when she said:
“I would highlight that equity market valuations at this point generally are quite high,” Yellen said. “There are potential dangers there.”
A new Polish translation of Hans-Hermann Hoppe’s A Theory of Socialism & Capitalism (Teoria socjalizmu i kapitalizmu), is now available here from the Mises Institute of Poland. (translated by Paweł Nowakowski).
Appendix B: “Collective Goods” and “External Benefits”: Two Arguments for Government Activity
One of the most important philosophical problems of recent centuries is whether ethics is a rational discipline, or instead a purely arbitrary, unscientific set of personal values. Whichever side one may take in this debate, it would certainly be generally agreed that economics—or praxeology—cannot by itself suffice to establish an ethical, or politico-ethical, doctrine. Economics per se is therefore a Wertfrei science, which does not engage in ethical judgments.
12. Conclusion: The Free Market and Coercion
We have thus concluded our analysis of voluntary and free action and its consequences in the free market, and of violent and coercive action and its consequences in economic intervention. Superficially, it looks to many people as if the free market is a chaotic and anarchic place, while government intervention imposes order and community values upon this anarchy. Actually, praxeology—economics—shows us that the truth is quite the reverse. We may divide our analysis into the direct, or palpable, effects, and the indirect, hidden effects of the two principles.
Appendix A: Government Borrowing
The major source of government revenue is taxation. Another source is government borrowing. Government borrowing from the banking system is really a form of inflation: it creates new money-substitutes that go first to the government and then diffuse, with each step of spending, into the community. Inflation is discussed in the text above. This is a process entirely different from borrowing from the public, which is not inflationary, for the latter transfers saved funds from private to governmental hands rather than creates new funds.
D. The Limits of Credit Expansion
Having investigated the consequences of credit expansion, we must discuss the important question: If fractional-reserve banking is legal, are there any natural limits to credit expansion by the banks? The one basic limit, of course, is the necessity of the banks to redeem their money-substitutes on demand. Under a gold or silver standard, they must redeem in specie; under a government fiat paper standard (see below), the banks have to redeem in government paper. In any case, they must redeem in standard money or its virtual equivalent.
