Huge Profits Are OK, As Long as You’re Hip and Cool About It
Thanks to Peter St. Onge for pointing out this little gem from Mark Perry:
Q. Bribery of Government Officials
Because it is illegal, bribery of government officials receives practically no mention in economic works. Economic science, however, should analyze all aspects of mutual exchange, whether these exchanges are legal or illegal. We have seen above that “bribery” of a private firm is not actually bribery at all, but simply payment of the market price for the product. Bribery of government officials is also a price for the payment of a service. What is this service?
P. The Right of Eminent Domain
In contrast to the franchise, which may be made general and nonexclusive (as long as the central organization of force continues to own the streets), the right of eminent domain could not easily be made general. If it were, then chaos would truly ensue. For when the government confers a privilege of eminent domain (as it has done on railroads and many other businesses), it has virtually granted a license for theft. If everyone had the right of eminent domain, every man would be legally empowered to compel the sale of property that he wanted to buy.
O. Franchises and “Public Utilities”
Franchises are generally grants of permission by the government for the use of its streets. Where the franchises are exclusive or restrictive, they are grants of monopoly or quasi-monopoly privilege. Where they are general and not exclusive, however, they cannot be called monopolistic. For the franchise question is complicated by the fact that the government owns the streets and therefore must give permission before anyone uses them.
N. Patents
M. Conservation Laws
Conservation laws restrict the use of depleting resources and force owners to invest in the maintenance of replaceable “natural” resources. The effect of both cases is similar: the restriction of present production for the supposed benefit of future production. This is obvious in the case of depleting resources; factors are also compelled to maintain replaceable resources (such as trees) when they could have more profitably engaged in other forms of production.
Salerno’s “Modest Proposal” paper is in Top 10 Downloads
Joseph Salerno’s paper “A Modest Proposal for Reining in the Bernanke Fed” is now in the Top 10 in downloads on the Social Science Research Network (SSRN) in the category of “Response to Financial Crisis.” SSRN is the primary depository of working paper in economics and the social sciences. You can download Joe’s paper here for free.
Who Are Those Free-Market Protestors in Brazil?
In Monday, the Washington Post looked into some of the groups behind the “Less Marx-More Mises” signs found among the anti-Dilma Rousseff protestors in Rio. They found Kim Kataguiri:
The Difference Between Starbucks and The State
When the US Government implements a new law or policy, it’s here to stay. Virtually no amount of complaining (short of serious civil unrest) from the taxpayers will lead to a swift reversal in Obamacare, or the TSA, or the US Patriot Act, or NSA spying, or Net Neutrality, at least not without years of “studies” and hearings, and a national “debate” which of course must answer the question: “what will you replace [government program x] with?”
L. Outlawing Basing-Point Pricing
An important example of the monopolizing effects of a program supposedly designed to combat monopoly is the court decision outlawing basing-point pricing. On the free market, price uniformity means uniformity at each consuming center, and not uniformity at each mill. In commodities where freight costs are a large proportion of final price, this distinction becomes important, and many firms adopt such price uniformity, enabling firms further away from a consuming center to “absorb” some freight charges in order to compete with local firms.
