Back from Texas: On the Coastal Mindset

Back from Texas: On the Coastal Mindset

05/12/2018Ilana Mercer

I recently traveled to Texas to speak about South Africa, at the Free Speech Forum of  the Texas A & M University.

To travel from the Pacific Northwest all the way to College Station, Texas, without experiencing more of the "Lone Star State" was not an option.

So, after driving from Austin eastward to College Station (where I was hosted by two exceptional young, Southern gentlemen), I headed south-west to San Antonio. There I lingered long enough to conclude:

The Republic of Texas is a civilization apart.

Ordinary Texans—from my brief travels—tend to be sunny, kind and warmhearted. Not once did I encounter rude on my Texas junket.

On the Pacific Coast, however, kindness and congeniality don't come naturally. Washington-State statists are generally aloof, opprobrious, insular. And, frankly, dour.

Southern historian Dr. Clyde N. Wilson tells of receiving "a package containing a chamber pot labeled 'Robert E. Lee's Soup Tureen.'"

It came from … Portland, Maine.

Unkind cuts are an everyday occurrence around here, where the busybody mentality prevails.

Stand still long enough, and they'll tell you how to live. They'll even give chase to deliver that "corrective" sermon. A helmeted cyclist once chased me down along a suburban running trail.

My sin? I had fed the poor juncos in the dead of winter. (Still do).

Having caught up with me, SS Cyclist got on his soap box and in my face about my unforgivable, rule-bending. Wasn't I familiar with the laws governing his pristine environmental utopia?

Didn't I know that only the fittest deserved to survive? That’s the natural world, according to these ruthless, radical progressive puritans.

Yes, mea culpa for having an exceedingly soft spot for God's plucky little creatures.

When a Washington statist gets wind of your core beliefs—why, even if your use of the English language irks His Highness—he will take it upon himself to fix your "flaws," try to make you over in his sorry image.

For the distinct cluster of characteristics just described, Dr.  Wilson aforementioned uses the term Yankee.

The professor, whose métier is American intellectual history, was described by Eugene Genovese as "an exemplary historian who displays formidable talent." Another stellar scholar, Thomas Landess, lauded Wilson as "a mind as precise and expansive as an encyclopedia."

Duly, Dr. Wilson makes the following abundantly clear: By "Yankee," he does not mean "everybody from north of the Potomac and Ohio.”

“The firemen who died in the World Trade Center on September 11 were Americans. The politicians and TV personalities who stood around telling us what we are to think about it are Yankees."

"Yankee" as a designation belongs to "a peculiar ethnic group descended from New Englanders, who can be easily recognized by their arrogance, hypocrisy, greed, lack of congeniality, and a penchant for ordering other people around."

"A perversity of character," said Thomas Jefferson succinctly of the Yankee character.

Indeed, "Puritans long ago abandoned anything that might be good about their religion but have never given up the notion that they are the chosen saints whose mission is to make America, and the world, into the perfection of their own image."

The cover of Wilson's "The Yankee Problem: An American Dilemma" is bedecked with the quintessential Yankee mugs of Hillary Clinton, George W. Bush and John Brown, each a murderer in his or her own right. The one butchered with his bare hands. The other two killed by proxy.

The contemporary face of the fanaticism alluded to here is pundit Richard Painter, who is the spitting image of Brown. A Republican until Trump, Painter is now a member of the anti-Trump high-command at MSNBC.

In zealotry, Painter could pass for the terrifying Radical Republican Thaddeus Stevens.

A broader truth hit me in the solar plexus during the sojourn from the American Deep North to The South. On hand to better contextualize it is my friend, Clyde Wilson:

“Texas is still a Red State, despite a large number of minorities. That is because Texas, as you observed, Ilana, has a real culture. That means that there is a reality there that minorities can identify with and assimilate to. Unlike, say, Chicago or New Jersey or L.A., where they simply become aggrieved ‘victims,’ clamoring for special benefits, that being the only culture present."

"The peculiar character of the Yankee was observed by Tocqueville in the 19th century and Solzhenitsyn in the 20th. The first great American novelist, James Fenimore Cooper, wrote a whole series of books about the New England Yankees who spread into and destroyed the unique culture of his home country of Upstate New York.”

“Plenty of Northerners, like Governor Horatio Seymour of New York and Governor Joel Parker of New Jersey, blamed the War between the States on New Englanders, and not the South, which simply wanted to be let alone."

"One cannot really grasp American history unless you understand how Yankees have dominated and distorted it since the late 18th century.”

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Donald Trump's Democratic Wall

2 hours agoTho Bishop

After a month of “will he, won’t he” drama fitting for reality television, Donald Trump has announced his plans to declare a national emergency in order to get the funding he desires for his border wall. While the wall itself invites debate on subjects such as practical immigration policy, eminent domain, and government contractors – the use of a national emergency has brought a renewed look at executive power.

For weeks Trump has been warned by Republican leadership about the dangers of the precedent being set by such a decision. Nancy Pelosi has already suggested that a Democratic politician could use a “national emergency” to enact gun policy.

While such concerns are justified, it’s amusing to see such objections being raised by conventional beltway-types as the long-standing trend within Washington has been the gradual expansion of the executive branch. What is the practical difference, for example, between a president going around Congress for a border wall and a president going around Congress for military action? Or President Obama’s own immigration-related executive order that granted protection to “Dreamers” after Congress refused to bend to his will?

One does not have to support Trump’s wall to identify hypocrisy. Once again, we see that Trump is at his worst when he simply continues long-standing political trends.

While the gradual expansion of the executive leviathan is concerning, it is also predictable given the 20th century deification of American political democracy.

After all, if we are to buy in to the idea that political action is validated through participation, then it makes sense for the single political office voted on by the entire country to gradually expand its power – particularly given the obstructions to majority rules the Constitution purposefully placed on the legislative branch. The preference for general majority rule at the expense of state-based representation is also what motivates the modern lefts interest in effectively abolishing the senate and Electoral College – both of which act as checks on the imperialism of democratic excess.

While the 20th century set the stage for the modern state, it was Andrew Jackson who was the first American president to understand how the promotion of democracy could directly feed an imperial presidency. While Jackson could be praised for his views on central banking and federal debt, his presidency offered some of the most flagrant examples of hostility towards both states rights and limits to executive power.

In his first address to Congress, he outlined his vision of a truly democratic executive. He called for the abolishment of the Electoral College, and criticized the role of a large legislature in frustrating popular rule. In his view, “the first principle of our system…[is] that the majority is to govern.” As the best representative of what he saw as the will of the people, he placed his own interpretation of the Constitution as equal to all other branches of government – best illustrated by his rejection of John Marshall’s decision regarding the property rights of Native Americans leading to the Trail of Tears.

While Trump has gone the furthest in openly inviting comparisons to “Old Hickory,” Jackson’s view of the democratic presidency has long prevailed. In the words of John Yoo, “Jackson remains one of the greatest Presidents because he reconstructed the office into the direct representative of the American people.”

Unsurprisingly, it was Yoo who provided the legal defense for many of the excesses of the George W. Bush presidency.

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A Family Connection

02/14/2019David Gordon

Mr. Mark Lautman has given me permission to share the following letter:

When I started reading Rothbard’s book, I gave the three-line summary to my wife. “It’s a book written by Murray Rothbard in the 1950s about libertarian economics. It’s published by the Mises Institute. Rothbard was a disciple of an Austrian economist Mises.”

“Mises?” she asked. “Ludwig von Mises?”

“Yes. Do you know about him?”

“Do you know who Ludwig von Mises was? He was my grandfather’s cousin!”

Sure enough, Paul Lourie, my wife’s grandfather, mentions Ludwig von Mises in his memoirs!

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Markets are About Freedom, not Competition

02/12/2019Ryan McMaken

I really enjoyed Antony Sammeroff's article last month about how the distinguishing characteristic of markets is free and voluntary exchange. Although many people like to speak of "competition" as the defining characteristic of markets, they're wrong. There is competition for resources in every political and economic system. In markets, however, that competition for resources is more free and less violent than in other systems.

Sammeroff explains more in a recent interview with Tom Woods:

 

Ep. 1339 The Wrong Way to Argue for the Free Market

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Mark Thornton on Why Socialism Is Deadly and Dangerous

02/12/2019Mises Institute

Mark Thornton explains why socialism can never work, the history of the death and misery its caused and we discuss a better way to help everyone live a more free, peaceful and prosperous life. We need look no further than Venezuela.

The Chronically Human Podcast Ep 11 - Dr. Mark Thornton

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Powell Claims No "Elevated" Risk for US Recession, NY Fed Models Disagree

02/12/2019Tho Bishop

Today Jerome Powell got out of the beltway and enjoyed some southern hospitality at Mississippi Valley State University, speaking at the Hope Enterprise Corporation Rural Policy Forum.

Most of the Fed Chairman’s talk was dedicated to talking about how the Fed could the financial needs of rural areas, a questionable claim considering the direct role central banks have played in increasing wealth inequality. He did, however, provide some additional thoughts on the strength of the US economy as a whole.

In particular, when asked about future risk, he said he did not “feel that the probability of recession is at all elevated.”

What’s interesting is that this claim does not follow the models published by the NY Federal Reserve which shows the current risk of recession at the highest they’ve been since 2008.

NY Fed Recession Probability 2.12.jpg
(H/T @TexarkanaFed via Twitter)

Of course, given the poor track record of Federal Reserve models, perhaps more useful is that this rosy view of the US economy seems to contradict the recent policy trends from the Powell Fed.

This includes changes to recent FOMC statements and projections about the rate of future rate increases, as well as indicating a willingness to stall the slow normalization of the Fed’s balance sheet that is currently in process. As he said in late January:

We’re listening carefully with – sensitivity to the message that the markets are sending and we’ll be taking those downside risks into account as we make policy going forward...If we came to view that the balance sheet normalization or any other aspect of the normalization was part of the problem, we wouldn’t hesitate to make a change.

Though the statement was made in carefully managed “Fed Speak”, the message it communicated couldn’t have been more clear – particularly since Powell has long been an inner Fed voice concerned about the size of the Fed’s balance sheet.  The market understood that Trump finally got the Dovish Federal Reserve that he has spent the last year campaigning for. The day of the announcement was the first in Powell's tenure that the market reacted positively to one of his rate-setting announcements. 

Unfortunately for Powell, none of the arguments for “normalizing” monetary policy has changed since Powell first outlined his desires for a slow and gradual wind down. The economic data that the Fed claims to make its decisions off of continue to look strong and the dangers of facing a crisis with the monetary interventionists tools they desire have not gone away. So what has changed? Maybe, just maybe, it’s the perceived risk of a future recession that the Fed’s models, other signals, and a growing legion of economists are projecting.

Of course, in the Chairman’s defense, it would be a mistake to see the Fed’s top role as one of truth teller. The Fed’s job is necessarily a political one, to project an air of confidence and try to maintain confidence in the system. Unfortunately, hot air only goes so far, as Bernanke learned in 2007. 

Luckily for Powell, it pays to play the role of Baghdad Bob for the US economy, as Bernanke’s $1 million book deal and speaking fees illustrate.

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Rothbard and Salerno Quoted on Modern Monetary Theory

Brian Maher of the Daily Reckoning quotes Murray Rothbard and me in his incisive critique of Modern Monetary Theory (MMT), which has lately been embraced by proponents of the "Green New Deal."

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Study Shows Government Social Programs Create Dependence, Idleness

When I write about Social Security, I normally focus on the program’s huge fiscal imbalance ($44 trillion and climbing).

But it’s not just a fiscal crisis. Social Security is also an increasingly bad deal for workers. Especially minorities with lower average lifespans. When compared to what they would get from a private retirement system, people are paying in too much and getting out too little.

There’s also another major problem with the program.

Academic experts have quantified how older workers are lured out of the labor force when they get money from the government. And since economic output is a function of the quality and quantity of labor and capital, this means we’re sacrificing wealth and reducing prosperity.

Here are some excerpts from a study by Professors Daniel Fetter and Lee Lockwood.

Many of the most important government programs, including Social Security and Medicare, transfer resources to older people… Standard economic theory predicts that such programs reduce late-life labor supply and that the implicit taxation reduces the ex-post value of the programs to recipients. Understanding the size and nature of such effects on labor supply and welfare is an increasingly important issue, as demographic trends have increased both the potential labor supply of the elderly and its aggregate importance, while simultaneously increasing the need for reforms to government old-age support programs. …We address these questions by investigating Old Age Assistance (OAA), a means-tested program introduced in the 1930s alongside Social Security that later became the Supplemental Security Income (SSI) program.

Here are charts illustrating how people are retiring earlier in part because of government payments.

Feb-11-19-Fetter-Figure-1.jpg

And here are some calculations from the study.

Our estimates indicate that OAA significantly reduced labor force participation among older individuals. The basic patterns that we explore in the data are evident in Figure 2, which plots male labor force participation by age, separately for states with above- and belowmedian OAA payments per person 65 and older. Up to age 65, the age pattern of labor force participation was extremely similar in states with larger and smaller OAA programs. At age 65, however, there was a sharp divergence in labor force participation between states with larger OAA programs relative to those with smaller programs, and this divergence continued at older ages. Our regression results, which isolate variation in OAA program size due to state policy differences, imply that OAA can explain more than half of the large 1930–40 drop in labor force participation of men aged 65–74. …Our results suggest that Social Security had the potential to drive at least half—and likely more—of the mid-century decline in late-life labor supply for men. …Taken as a whole, our results suggest that government old-age support programs can have large effects on labor supply, through both their transfer and taxation components.

This chart captures how old-age payments in various states were associated with varying degrees of labor force participation.

Feb-11-19-Fetter-Figure-2.jpg

By the way, I’m not sharing this information because it’s bad for people to retire at some point.

I’m merely establishing that there’s academic support for the common-sense observation that people are more likely to leave the labor force when there’s an alternative source of income (though it’s worth noting that there should be a sensible and sustainable system for providing that retirement income).

Moreover, people are likely to stop working when government systems give them money before age 65.

Three academics, Andres Erosa, Luisa Fuster, and Gueorgui Kambourov, have a study quantifying this problem in European nations.

There are substantial differences in labor supply and in the design of tax and transfer programs across countries. The cross-country differences in labor supply increase dramatically late in the life cycle…while differences in employment rates among eight European countries are in the order of 15 percentage points for the 50-54 age group, they increase to 35 percentage points for the 55-59 age group and to more than 50 percentage points for the 60-64 age group. In this paper we quantitatively assess the role of social security, disability insurance, and taxation for understanding differences in labor supply late in the life cycle (age 50+) across European countries and the United States. … The social security, disability insurance, and taxation systems in the United States and European countries in the study are modelled in great detail.

Here’s a sampling of their results.

The main findings are that the model accounts fairly well for how labor supply decreases late in the life cycle for most countries. The model matches remarkably well the large decline in the aggregate labor supply after age 50 in Spain, Italy, and the Netherlands. The results support the view that government policies can go a long way towards accounting for the low labor supply late in the life cycle for these European countries relative to the United States, with social security rules accounting for the bulk of these effects… relative to the United States, the hours worked by men aged 60-64 is…49% in the Netherlands, 66% in Spain, 44% in Italy, and 29% in France. …government policies can go a long way towards accounting for labor supply differences across countries. Social security rules account for the bulk of cross country differences in labor supply late in the life cycle (with its contribution varying from 50% to 100%), but other policies also matter. In accounting for the low labor supply relative to the US at ages 60 to 64, taxes matter importantly in the Netherlands (6%), Italy (6%), and France (5%); disability insurance policies are important for the Netherlands (7%) and Spain (10%).

And here’s one of their charts comparing hours worked at various ages in Switzerland, Spain, France, and the United States.

Feb-11-19-Erosa-Fuster-Kambourov.jpg
The good news is that we don’t push people out of the labor force as much as the French and the Spanish.

The bad news is that we’re not as good as Switzerland (probably in part because the Swiss have a retirement system based on private saving, so they have the ideal combination of good work incentives and comfortable retirement).

But it shouldn’t matter whether other countries have good systems or bad systems. What does matter is that America’s demographic profile is changing. We’re living longer and having fewer children and our system of entitlements is a mess.

We should be reforming these programs, both for fiscal reasons and economic reasons.

P.S. It’s not just Social Security. Other programs also lure people out of the job market and into government dependency, with Obamacare being an especially harmful example.

Originally published at International Liberty
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AOC's Green New Deal Is Absolutely Absurd, but That's the Washington Status Quo

02/08/2019Tho Bishop

This week Alexandria Ocasio-Cortez released a preliminary summary of her grand vision for a Green New Deal. Prior to its unveiling, the youngest rising star of the Democratic Party had already managed to get the support of leading members of Congress, including all of the party’s current leading Presidential candidates. Unfortunately for Ms. Ocasio-Cortez, the document was met with widespread ridicule for advocating policies such as building high-speed rail to Hawaii, eliminating combustible engines, and guaranteed government jobs – even for those “unwilling to work.”

Like FDR’s New Deal, the proposal would be a total disaster for the US economy. Also, like its spiritual predecessor, it’s a great illustration of what F.A. Hayek warned of his classical work the Road to Serfdom: a grand utopian plan for a military-like mobilization of the entire US economy, the inevitable result of which is economic ruin and loss of liberty.

The most refreshing part of the Green New Deal’s proposals though is how honest and transparent the document is – a rarity for Washington. The proposal makes its own comparisons to military plans, stating its objective is “to mobilize every aspect of American society at a scale not seen since World War 2” and remarking at the government’s past success of outperforming expectations when it comes to the manufacturing of war machines. It doesn’t try to downplay the revolutionary vision outlined in the brief, nor even try to act as if this is some sort of policy that will pay for itself, instead it explicitly advocates for it to be financed through the monetary magic of the Federal Reserve.

It is in her honesty in which Ms. Ocasio-Cortez’s true weakness as a politician lies.

After all, the very same class of political pundits and politicians – on both the left and right – that have decided it is safe to laugh at the freshman Congresswoman’s proposal are almost all guilty of promoting and supporting plans that are similarly absurd.

For example, AOC’s embrace of the idea that “we’ll just pay for it!” – a crudely articulated version of Modern Monetary Theory which has gained its own following in recent years  –  is certainly deserving of ridicule. Is it, however, all that more outrageous than the idea of negative interest rate or the massive expansion of central bank balance sheets that “serious” central bankers have embraced around the world?

Similarly, the sheer hubris of thinking that Washington central planners – in just 10 years – can re-arrange the entire US economy in a way to eliminate all carbon emissions is something so insane that it shouldn’t be seriously discussed in civilized society.  Yet is it really all that more delusional than the idea that the US military could transform the entire Middle East into a bastion of neoliberalism, a view passionately defended by a number of “serious” pundits and policymakers who continue to get paid for their opinion?

Yes, anyone with a basic grasp of economics can recognize the amazing fallacies that exist within the idea of guaranteeing everyone, everywhere a job, food, healthcare, and housing – totally regardless of merit. Yet the current operations of the US government actively dismiss the well-understood consequences of prohibition, government subsidies, unfunded social programs, and arbitrary insurance mandates.

So yes, Rep.  Alexandria Ocasio-Cortez is guilty of promoting stupid policy she doesn’t fully understand, the consequences of which will have very negative consequences for Americans of all types. She is deserving of public ridicule and in a better world would be soundly voted out for her severe ignorance.

She should not, however, be treated as a beltway outlier.

 Her complete ignorance of economics simply means she fits in perfectly with the rest of Washington and most legislators around the world. 

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Why It's Important to "Preach to the Converted"

02/08/2019Ryan McMaken

An an editor of publications with a distinct ideological bent, I sometimes hear that it's important to strive to avoid "preaching to the choir" or "preaching to the converted."

It's difficult to generalize what is meant when this phrase is used. Some users of the phrase think it's a waste of time for any group to discuss important topics among the members. Why discuss laissez-faire economics (or any topic) with other people who already agree?

Some have even argued that the very existence of publications devoted to a specific limited ideological point of view are dangerous because they encourage more in-group discussion at the expense of outside engagement.

More generally, though, the use of the phrase "preaching to the converted" is used to devalue the practice of encouraging frequent discussion of ideas and scholarship within in a certain group. The phrase instead suggests it is better to focus most — if not all — communications outward for the purposes of converting outsiders.

There's a lot of gray area here, and moderates on the issue likely hold a wide variety of opinions as to just how much discussion ought to be with outsiders. Some may think its fine to develop ideas internally, and to engage in only occasional outward "missionary" efforts. Depending on the nature of the organization, some may even think it's fine to focus nearly all energies on in-group teaching and scholarship so that in-group members can then go to other organizations which specialize in outward communications, but do little in terms of internal debate and idea development.

In practice, most ideological groups do both internal idea development and education, and outward communication.

Both activities are important, and many people understand this.

Some observers, nevertheless have a tendency to excessively emphasize the importance of not "preaching to the converted" and this is often due to three incorrect assumptions:

  1. It is believed that people in the converted already have a sufficient understanding of the topic at hand.
  2. It is assumed that the converted will never leave the group in question.
  3. It is believed that the converted won't interact with people outside their group in other contexts.

To illustrate these points, it may be helpful to speak of them in the context for which the term was originally invented: religious evangelization.

This isn't to suggest that laissez-faire views of political economy are anything like a religion. They're not. These views do not constitute a "way of life" or any sort of all-encompassing theory of the cosmos or the human person.

Nevertheless, a religious group can serve as an instructive analogy for a closer look at spreading a certain ideological viewpoint.

The "Choir" Is Often Full of Poorly Educated and Casual Believers

Let's begin by looking at "the converted" or the congregation in any religious group.

Anyone who has experience within any sizable group of Christians — for example — knows that there is a wide variety of knowledge levels and engagement levels within the group.

Some of them are well-read, enthusiastic, orthodox, and attend every single group event. Others are less sure of the group's core beliefs. Some only attend services occasionally. Some self-identify as Christians, but have barely read any of the group's most important documents.

And yet, all of these people call themselves "Christians." Clearly, it would be a mistake to then conclude that no one in this group requires additional discussion, instruction, or reading. In fact, most would benefit from being shown new ways of looking at things, or new readings with which they had not been familiar before. The clergy and teaching staff would also benefit from being asked difficult questions and being asked to elaborate on ideas already discussed. Useful information doesn't just flow one way. Without this, the "converted" cannot be expected to communicate their ideas to others, or even to themselves. Moreover, because old people die and new people are born, new people may be coming into the group as other people are dying off.

Some of the Converted May Be Headed Out the Door

This brings us to the second problem of assuming too much about the converted. It is often assumed that those who are converted will stay that way. This, of course, is a bad assumption in both ideological movement and in religious groups. People fall away from religious groups frequently. The same is true of any number of ideological groups, whether they be based on laissez-faire economics,  on Marxism, or on veganism.

Thus, one of the most important functions of "preaching to the converted" is to address the questions of those who perceive inconsistencies in the ideas, or to better explain hard-to-understand aspects of a certain group of ideas. One of the most important things to avoid is the idea that every question already has pat answers that are self-evidently true to everyone. This is rarely the case, of course, so even among the converted, additional discussion and investigation is usually warranted.

The Converted Are Part of Other Groups

And finally, it is important to remember that "the converted" — unless they're part of a despotic cult — interact with numerous other groups of people in daily life, whether through family, professional work, or community groups. If these people are to be expected to spread certain ideas effectively, they must have a competent grasp of them. And there must be some place or publication or organization that can help them obtain this grasp of things.

In other words, if the converted are to share their ideas with others, their primary concern should be understanding these ideas well in the first place.

Leonard Read regularly made this point, noting:

it is only in self-improvement that one can have any influence whatsoever on the improvement of others. This point may never come clear unless we know why so few of us feel any need for self-improvement while so many of us possess an overpowering itch to improve others. Why do we spend so much more time looking down than up?

This was perhaps Read's version of "doctor, heal thyself." It's a good thing to want to go out and improve the world. But it's important to also have the means of improving one's self first. Being a member of "the choir" or "the converted" is often a helpful first step.

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Crony Capitalism in Scientific Research

02/07/2019Hunter Lewis

My wife and I read a quirky newsletter you won’t find online called the Belly of the Beast. It is the source of this startling but then again not surprising information: Academic researchers publish 2-3 million papers a year, most of it funded by governments. Most of the results of the this research are published in copyright protected journals owned by private companies, especially the giant German company Elsevier, companies that together are thought to earn over $25 billion. To read the research, you need to subscribe, and some of the journals charge as much as $5,000-10,000 a year for the subscription. Individual articles may be purchased separately, but there are stiff fees for them such as $40 each. Academic libraries often use public funding to pay the subscription or article prices.

There are some other peer reviewed "open access" journals, but researchers may have to pay a stiff fee to be put up on line by them, for example $3,000, and they are generally less "prestigious" than the print publications. A documentary film on this subject may be found at paywallthemovie.com . The film teases that you will have to pay $39.95 to see it, but you won’t actually have to do so. By the way, the government giving away billions for research and then allowing private publishers to skim billions from it is far from the whole story. If government funded research at a university results in a patentable invention, such as a drug, the university is granted all the rights to the patent. The university then sells or licenses the patent to a drug company. The government, having doled out so-called public funds, does not share in any of the profits.

Why is government perfectly happy with these arrangements? Because government is working hand in glove with the private interests directly profiting from the arrangements. Politicians benefit through campaign contributions, donations to their captive non-profits, and future jobs. Bureaucrats receive trips or other benefits or the prospect of future, remunerative jobs from the same private interests.

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