Don't Trust Cuban Health Care Statistics

Don't Trust Cuban Health Care Statistics

06/20/2018Ryan McMaken

We've long been told that Cuba's health care system is one of the greatest in the world. In spite of the fact that health usually correlates with wealth in national statistics, we're assured that Cuba's obvious poverty is offset, at least in part, by amazingly low infant mortality rates and life expectancy.

But in a new short article for the journal Health Policy and Planning, Gilbert Berdine, Vincent Geloso, and Benjamin Powell examine some of the ways that the data is being manipulated in Cuba to ensure better-looking health statistics.

For example, on the matter of infant mortality, doctors have been known to redefine dead infants as dead fetuses:

[There is] evidence that physicians likely reclassified early neonatal deaths as late fetal deaths, thus deflating the infant mortality statistics and propping up life expectancy. Cuban doctors were re-categorizing neonatal deaths as late fetal deaths in order for doctors to meet government targets for infant mortality.

Abortions of babies in utero who might die soon after birth is a tactic as well:

Physicians often perform abortions without clear consent of the mother, raising serious issues of medical ethics, when ultrasound reveals fetal abnormalities because ‘otherwise it might raise the infant mortality rate.’ ... At 72.8 abortions per 100 births, Cuba has one of the highest abortion rates in the world.

The focus on infant mortality may have led to increases in other types of mortality:

[T]hese outcomes come at cost to other population segments. The maternal mortality ratio of Cuba in 2015 was higher than in Latin American countries like Barbados, Belize, Chile, Costa Rica, Mexico and Uruguay ( Trends in Maternal Mortality 1990 to 2015, 2015). In terms of healthy life expectancy, Cuba ranked behind Costa Rica, Chile, Peru and Bermuda and marginally surpassed Uruguay, Puerto Rica, Panama, Nicaragua and Colombia

Some factors that have led to a more fit population have nothing at all to do with health care delivery:

[C]ar ownership is heavily restricted in Cuba and as a result the country’s car ownership rate is far below the Latin American average (55.8 per 1000 persons as opposed to 267 per 1000) (Road Safety, 2016). A low rate of automobile ownership results in little traffic congestion and few auto fatalities. In Brazil, where the car ownership rate is 7.3 times above that of Cuba, road fatalities reduce male and female life expectancy at birth by 0.8 and 0.2 years

Forced exercise helps:

[Another factor includes] forcing the population to increase their reliance on more physically demanding forms of transportation (e.g. cycling and walking) (Borowy, 2013). In fact, local physicians attribute a strong role to the massive introduction of bicycles in order to explain the decrease in traffic accidents mortality

So does making the population go hungry:

During the ‘Special Period’ (the prolonged economic crisis caused by the collapse of the Soviet Union), there were ‘sustained shortages in the food-rationing system’ that led to reductions in per capita daily energy intake (Franco et al. 2007). Combined with the increase in the levels of energy expenditures due to the reliance on physically demanding forms of transportation, this led to a reduction in net nutrition...this crisis led to the halving of obesity rates and, although one has to be careful in causal terms, this likely contributed to important reductions of deaths attributed to diabetes, coronary heart diseases and strokes (there were also increases in the number of cases of neuropathy).

As Berdine, et al point out, a key factor here is the unseen opportunity cost of mandating that more and more resrouces be directed toward health care at the expense of other sectors of the economy. Cuban central planners have decided that large amounts of national income be devoted to health care so as to improve (some) national indicators on health. But, given the choice, would Cubans choose to devote so much to health care?

Many advocates for government-directed health spending like to claim that health and longevity are the most important factors. But ordinary human behavior makes it clear this is not actually true. People routinely spend money on non-essentials like non-basic automobiles, large houses, and costly vacations when they could save that money for medical emergencies. Even in countries with so-called socialized medicine often have options for private supplemental health insurance — which would expand and improve quality of care for the purchaser. And yet few elect to use this option. Clearly, living as long as possible is only one value balanced against many others.

In light of this, can we conclude the Cuban government is hitting the "correct" amount of health care spending? Since each person's value ranking differs, this is obviously impossible.

Nevertheless, the Cuban healthcare system is clearly geared toward hitting certain goals arbitrarily set by government officials. This can lead to abuse, of course, and also to unreliable data.

RELATED: "Life Expectancy: If Denmark Were a US State, It Would Rank Equal To or Worse Than Sixteen US States

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No, Andrew Yang, Technology Is Not Killing Jobs

03/06/2019Atilla Sulker

Recently, 2020 Democratic presidential contender Andrew Yang appeared on Fox News . During the segment, Yang asserted that the increase in the amount of technology in the private sector, e.g., artificial intelligence, has lead to an increase in unemployment. Like the other candidates in the Democratic primary, Yang embodies the same principles of economic interventionism, though attempting to differentiate his views from those of his counterparts on the left. Unlike the other, however, he has allocated considerable attention to entertaining the notion that if artificial intelligence is not hindered in its progression, it will soon displace millions of Americans from jobs.

Yang has given the impression that he is the “reasonable” and most pragmatic candidate among all presidential contenders, garnering praise from both the left and the right. The entrepreneur is seen as a man of bold new ideas, particularly in regards to his economic protocols. But in essence, Yang’s arguments hearken back to the Technocrat movement of the 1930’s. These ideas seem to be correct superficially, but underscore a severe misunderstanding of the basic economic principles that guide human action.

Henry Hazlitt’s famous book Economics in One Lesson addresses the point raised by Yang, that machines are displacing humans, particularly the chapter titled “The Curse of Machinery”. Hazlitt reduces the problem to simple economic principles. He first asserts that if machines create unemployment, it follows that every technological innovation to this day has done so by improving the manufacturing process, gradually displacing jobs. This logic would lead to the conclusion that to achieve maximum employment, all the technological progression of the past millennia would have to be reversed.

While it may be true that in the short run a machine may displace jobs upon being introduced to a sector, the creation of the machine itself would bring in new jobs. The economizing entrepreneur would only adopt the machine if he sees it as an integral component in expanding his profits. These new profits could be used for expanding his operations, or his own personal consumption. If the former, the entrepreneur could invest in new machinery, in turn creating new jobs, and if the latter, money spent in any given industry would lead to an increase in employment in that industry.

Another point to consider is that goods produced in one industry could be used as capital in another industry. For example, a firm may use machines to create bolts at a faster rate. While this may lead to an initial decrease in the number of jobs in the bolt industry, it would lead to an increase in jobs in another industry. For example, car manufacturers may need to use these bolts, and so they now have more capital to use in manufacturing cars. This would lead to an increase in the amount of jobs in the automotive industry.

The view that jobs would be displaced by a rise in technological innovation is really rooted in the view that the economy is a fixed pie. Only so much wealth exists and only so many people can have it. This is a fallacy. It is the dynamic nature of the economy that leads to the constant expansion of industries, which in turn leads to the expansion of other industries who rely on goods produced by these industries. And as this process guides economic progress, new industries come about. This process of economic progression will never end, so long as we continue demanding goods, which will only lead to an increase in the quality of living.

Originally published at 71Republic.

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Is the Future of Europe Dutch?

03/05/2019Adam Bartha

Brexit has caused some turbulent political times in Westminster, but the hole left by the UK in Brussels will be felt throughout the continent.

Putting the tedious fight of Brexit negotiations aside for a moment; what kind of Europe are we going to see develop in the next 10 years, after the UK departs the union? Will France and Germany continue to take the lead and form an ever-closer union? Will the central European axis of populists in Poland, Hungary, and Italy halt any kind of reform attempts? Will the UK become a free-market, competitive paradise that will force the EU to implement market-friendly policies as well?

Liberal, free-market supporters should not bet on either. Instead, their best hope is to aid the Netherlands – to make Europe more Dutch.

Despite being one of the six founding members of the EU, the Netherlands has always been the neglected junior partner, stuffed between France, Germany, and the UK; countries that shaped the future of the union in more significant ways. However, with the UK’s departure, the balance of power is likely to change, and Dutch politicians are hoping to benefit from this realignment.

Even if the UK regains some of its international reputation after the Brexit blunders, it will lose its ability to shape the future of the continent in the same way, like it did for the past 40+ years. The European Council will lose a member that could stop the tax harmonisation attempts of the Commission. There won’t be British MEPs who could push for the completion of the single market in the service sector, or be the voice of reason when it comes to financial regulation.

France and Germany will continue to prioritise the issues most important to them; finding a common EU solution for the migration issue, more foreign policy and military cooperation, and further eurozone integration. Germany is also likely to continue endorsing further free trade negotiations, whilst remain the centrist, compromise-seeking voice within the EU (instead of a country that dares to push for bold liberalising reforms).

However, there are many new proposals from the European Commission and ideas floated by the Parliament that would be bad news for anyone who would like to see a more liberal, market-friendly Europe.

The Commission’s recent proposal to push for Qualified Majority Voting in the European Council on certain tax issues would mean that individual member states could no longer veto tax harmonisation attempts. If it passes, then the corporate tax reform, known as CCCTB, would become suddenly a lot easier to implement.

In practice this means an additional layer of tax bureaucracy, undermining member states’ tax sovereignty, and creating new hurdles for business expansion.

Multiple member states and the Commission floated the idea of a digital turnover tax, applied to major multinational tech companies. France and the UK are especially keen on this harmful policy, that would lead to less tech investment on the continent. (The fact that the whole debate revolves around misleading numbers about tech companies not paying their fair share of tax burdens is just a side note in the story.)

There are also plans to expand the social pillar of the EU – essentially protectionist measures disguised as welfare regulation and harmonisation.

Can a single EU member state, like the Netherlands, halt these harmful policy proposals and introduce ones that would truly help European citizens? The latter could include the completion of the single market in the service sector, conducting free trade agreements that lower tariff and non-tariff trade barriers alike, and passing Treaty reforms that would enable pan-European institutions to focus on big picture policies, instead of trying to micro-regulate all aspects of our lives.

The Dutch won’t be enough on their own, but they are better placed to become the behind-the-scenes brokers of EU compromises than most of their European counterparts.

The German political elite tries to avoid the image that the whole show is run by them, while the French politicians love grandiose ideas, but lack the political capital to implement them – which is often for the better, as they rarely mean more liberal, free market policies. The new EU member states still have not yet developed a significant diplomatic force – especially now that some of them have declared Brussels as their ‘#1 enemy’, they have little chance of suddenly becoming the efficient dealmakers of Brussels.

On the other hand, the Netherlands, in close partnership with the Scandinavian countries, could gather the majority support for significant reforms. It can certainly gather enough support to reduce tariff and non-tariff trade barriers with the help of Germany and the central European manufacturing powerhouses. It can work together with France, Spain, Italy, and Germany to find workable solutions for eurozone reform. It can cooperate with Scandinavian and central European countries to stop harmonising attempts in taxation policy and push for a competitive European tax environment.

Netherlands is far from a free-market liberal paradise, and it certainly has its own challenges and bad policy proposals. However, broadly speaking it is one of the most pro-trade, pro-competition, pro-decentralisation EU member states.

Despite some wishes to the contrary, the European project has become more important than ever. The policies decided in Brussels will have a significant impact on most of our lives throughout the continent, even if certain citizens in Europe will cease to be EU citizens.

It is important to make the case for a liberal, laissez-fair EU, that’s slim, efficient and enables member states to compete within the single market, whilst remaining open to the rest of the word.

First published at the Institute for Economic Affairs
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People Trade. Nations Don't.

03/05/2019Patrick Barron

Through their power to control banking, central banks are unnecessary barriers to commerce. Even those who have spent their entire lives in banking, often in positions of great importance and responsibility, assume that cooperative exchange of goods and services requires a central bank's oversight. But consider a typical trade, whether foreign or domestic. Joe Smith in the US produces widgets. Of course he desires to produce and sell as many as he can at a profit. He has willing buyers in both the US and overseas. Because he manufactures and ships his widgets from the US he is required by legal tender laws to conduct his trade in US dollars. In fact were he to refuse to accept US dollars, by law the buyer could take delivery of Joe Smith's widgets and not pay him at all. But Joe is concerned that the US dollar is being systematically debased by the Federal Reserve Bank and that the dollars he accepts from his sales will depreciate in purchasing power before he can re-employ them to pay for the factors of production to produce more widgets. Therefore, Joe must increase his price to compensate for this currency risk.

But all this changes if the central bank and legal tender laws are eliminated. Joe can accept any form of payment to which he and his buyer agree. Since they both desire to trade, they will use whatever money is the most marketable; i.e., that money that others also will accept willingly. Gradually, sound money will emerge. It may be gold, silver, or something else, but it probably will be a commodity, a certificate (bank note), or account balance that is fully backed by a commodity (one hundred percent reserved).

The commodity itself may be used in hand-to-hand exchange for small, local transactions, but probably most exchange would be conducted no differently than today where electronic tools debit and credit bank accounts. A government controlled central bank is NOT required to settle this transaction. Any honest, private bank could do it and would do it. Nothing more is required than a book entry that increases the gold balance at Joe's bank and decreases the gold balance at his customer's bank, whether foreign or domestic. If Joe and his customer do not use the same bank, a third bank may be involved to settle the transaction. Such a bank is called a "correspondent bank", meaning that both Joe's and his customer's banks have gold accounts there for the purpose of settlement. Many private banks perform this service today, bypassing the Fed.

All trade is conducted by people. The statistics that aggregate a nation's companies' foreign purchases and sales are irrelevant and serve only to perpetuate the fiction that countries trade and not people. This leads to the completely fallacious claim that a nation whose companies and people sell more abroad somehow "wins" or benefits from trade and, likewise, that the nation "loses" if its companies and people in the aggregate buy more abroad than they sell.

This fiction survives only because each nation has a central bank to control foreign exchange and legal tender laws that promote use of its ever-depreciating currency. But if Joe Smith sells widgets to Honda Motors in Japan, each party benefits or the trade would not have occurred. Honda Motors' bank account diminishes by the amount of the purchase and Joe Smith's bank account increases. The reverse would be true if Joe Smith bought raw materials from a Mexican company. If each party benefits as expected from the trade, wealth is increased for the parties involved in the trade. In an unhampered market, of course, there is no need of a national currency or a central bank. 

Political Borders Are Irrelevant to Trade

The irrefutable observation that people trade and not nations leads to the epiphany that political borders and politically based trade statistics are irrelevant, meaningless, not necessary, and ultimately harmful. So-called "trade deficit" statistics lead to calls for monetary debasement to spur foreign trade and even protectionist policies to reduce purchases from people and companies in foreign lands. But such trade is no different than buying produce from a local farmer. You and your local farmer both benefit, just as Joe and his Mexican supplier of raw materials benefit. The world is made more prosperous. The truly tragic consequence of keeping national trade statistics is that such irrelevant yet seemingly important data can lead to international tensions. Today we witness our political leaders branding individual nations to be predatory because their people and companies sell more goods to Americans than Americans buy in return. But where is the predation if one ignores national borders? Buying raw materials from Mexico is no different than buying produce from a local farmer.

Misunderstanding International Trade Can Lead to War

As an informative thought experiment consider what would change if Hawaii were not the nation's fiftieth state and had remained a sovereign nation. Would the impact on the US trade balance of the other forty-nine states composing a slightly reduced US have any meaning from the fact that the US purchased pineapples from Hawaiian farmers who now would be branded as foreigners? Of course not! The same is true if Alaska had remained part of Russia and had not been sold to the US during our Civil War. Would our industries be worse off due to the fact that the oil from Alaska was produced by Russian citizens and not American citizens? Of course not! The oil is the same economic benefit, regardless of who produces it. Think this is unimportant? Consider that there is the potential for military conflict in the very far north over future oil exploration. Russians, Canadians, Norwegians and most ominously Americans all claim sovereignty over these heretofore untapped oil reserves and vow to keep out companies headquartered in foreign lands. This is reminiscent of the imperial wars that racked the European powers for centuries as each tried to monopolize world trade. World War II was caused in large part by the Japanese attempt to control all trade in Asia at the expense of the old colonial powers. Since 1945 the Japanese economy has benefited immensely from simple trade without the need to control its trading partners politically. This should be a lesson to today's world leaders, but don't hold your breath.

Conclusion

A world of peace and increasing prosperity depends upon strictly limiting the ability of governments to interfere in international trade through their central banks and legal tender laws. Eliminating both would expose many economic fallacies that purport to characterize international trade as a competition between nations with their own citizens either winners or losers depending upon whether they are net exporters (winners) or net importers (losers). Central banks not only are barriers to trade and prosperity, they are fomenters of international tension and even war. Time to scrap them. Remember, the US did not have a central bank between the Age of Jackson--after President Andrew Jackson was successful in preventing the renewal of the charter of the Second Bank of the United States in 1837--and just prior to the Great War in 1913 when the Federal Reserve System was founded. During this era, despite fighting a civil war, the US economy grew probably at the greatest rate of any economy in the history of the world.

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Carabini's Liberty, Dicta and Force

03/04/2019Gary Galles

About a decade ago, I first met Louis Carabini when he sponsored a Mises Circle event in Newport Beach, California. At that event, I picked up a copy of his small book, Inclined to Liberty. Not long afterward, I had read it, been impressed with its insight and Mr. Carabini’s ability to turn a phrase, and had even done a bit of a teaser article to encourage others to read it.

Now, a decade later, I have read another short book of his that is similarly insightful, with well-worked ideas and language. It is Liberty, Dicta, and Force , although its subtitle may bring out its theme best: Why Liberty Brings Out The Best in People and how Government Brings Out the Worst. The themes of both books, in fact, are well-represented by two sentences on p. 22:

Those inclined to liberty accept their lives as their own responsibility, take responsibility for their actions, and view those claiming to be their masters as charlatans. Being responsible for your life includes being wary of the state, just as you would be wary of any other form of intrusion.

I believe that, as with Inclined to Liberty, the best way to stimulate more — and more careful — reading of Liberty, Dicta and Force would be to highlight some of Mr. Carabini’s most on-the-money and inspirational words. With that in mind, consider some of my favorites.

  • Hobbes and Madison imply…that governments are needed to curtail man’s worst behavior; however, in actual practice, governments instead encourage man’s worst behavior…government provides a political safe harbor for the most abhorrent acts committed on its behalf.
  • Each political group [has] as its essential common theme the use of dicta and force to gain obedience…Dicta and force are the heart and soul of governments.
  • Those in government see solutions to problems they are certain will work. Yet …when their solutions are adopted and enforced the problems either get worse or create other problems worse than the ones for which the solution was designed.
  • The worthiness of any given solution in …the marketplace…is determined by potential beneficiaries. In contrast, a top-down political process is a one-size-fits-all solution in which worthiness is predetermined by the designer.
  • Allowing freedom to whatever extent government decrees requires the subjugation of some to the will of another…those who so prefer a master require everyone else…to be subject to the same master.
  • In the political world, those who demand respect are enforcers to be dreaded, not leaders to be followed.
  • We are awash in double-standard political jargon that manipulates our minds into transforming uncivil private behavior into civil public behavior…The same act that would land a private person in jail is praised when done by a so-called public one.
  • Why do people today have a deeply held conviction that slavery is inhumane and demeans the very essence of life, yet will condone and even enthusiastically endorse enslavement when the state is the master?
  • [Our] natural inclination toward cooperation and away from force tends to bring out the best behavior in people. In direct contrast, government authorities insist that dicta, obedience, and punishment are necessary to bring out the best behavior in people who, if left to their own volition, would become savages in a lawless society.
  • In the upside-down political world… cheaters gain entitlement to that which they did not work to produce, while those who would ostracize them as cheaters are disentitled to that which they have worked to produce.
  • Myriad government welfare programs have been devised…with a common thread of predation as the means to improve human welfare. Yet, despite the negative consequences of such programs, politicians remain convinced that predation — taking from some to give to others — if done their way, can…actually improve social welfare.
  • Politicians use the word “fairness” to shroud the act of theft in an aura of righteousness.
  • One would have to be most gullible to fall prey to the devious political tactic of criminalizing wealth, victimizing poorness, and moralizing theft.
  • If [people] were truly convinced about the validity of their beliefs, they would welcome scrutiny as an opportunity to showcase them and demonstrate the invalidity of the opposing view.
  • It is counterproductive to use dicta and punishment to command good behavior and conformity to another’s prescribed standards.
  • Government force is incapable of accomplishing that which volition accomplishes naturally…The tragedy that sensible people are able to avoid when left alone is the very tragedy governments perpetuate.
  • The tragedy of communal access to human resources is exemplified in a political democracy, where free riders have equal say about the distribution of resources as do those who produce them.
  • The state only exists at the expense of the working, cooperative members of society, while disrupting…their natural proclivity to orderliness.
  • Liberty is a concept of non-subordination that those who embrace politics find most difficult to accept because without subordination political governments would not exist.
  • The belief that there is a plan that if implemented will bring about a better society begs for someone with exceptional insight who knows the plan and can make it a reality. With that mindset, people open their door to every sort of political pundit claiming to be that messiah, ready and willing to implement his or her miraculous plan if given the chance.
  • Real people…do not become more brilliant, energetic, efficient, moral, creative, or superhuman by way of the state…the very opposite is engendered in people at the hands of the state.
  • Using force to make people behave better will only make them behave worse!
  • Outside the political world, people have myriad differences of opinions and preferences they can express without repressing the expression and preferences of others. The market seeks out every kind of expressed preference as an open invitation to provide satisfaction…In contrast, the political world is a battlefield where you had better shoot down the other guy’s preferences before he shoots down yours.
  • If political democracy were as wonderful as many claim, the threat of physical force would not be needed to gain allegiance. Only this threat gives politicians an audience because without it, people would, for the most part, mind their own business.

In Liberty, Dicta and Force, Louis Carabini makes a forceful case that “There are no stronger or more peaceful means for bonding humans of different cultures than the synergism of open markets, where interactive trading is neither forced nor prohibited.” Consequently, it provides one of the central reasons for why “Liberty is not something to be doled out by, or subject to, a superior authority.” Americans would profit by learning, or re-learning, that increasingly counter-cultural conclusion.

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Swedish Ex-Prime Minister Rebukes Bernie: Socialism Only Destroys

03/04/2019Alice Salles

Socialism never stopped enticing young American minds. But the more Democratic Socialists such as Alexandria Ocasio-Cortez open their mouths, we learn the movement’s most vocal proponents simply ignore socialism’s incompatibility with democracy, as demonstrated by Austrian economist Ludwig von Mises in A Critique of Interventionism . Sen. Bernie Sanders is one of them.

With the Vermont senator announcing he’s running for president, his past comments defending socialism and socialist countries notorious for their failures become the type of material critics are eager to dissect. Especially because he still calls himself a Democratic Socialist while using Nordic countries as examples of what he defends.

Thankfully, political figures from the very countries the good senator from Vermont calls “socialist” are here to remind him that the ideology is nothing but a trap.

Prime Minister of Sweden from 1991 to 1994, Carl Bildt, took to Twitter to warn Sanders that socialism is not the key to creating a great society as he and Ocasio-Cortez seem to think.

After old footage showing Sanders and his wife, Jane, praising the Soviet Union for its programs targeting the youth went viral online, Bildt responded by saying “Sanders was lucky to be able to get to the Soviet Union in 1988 and praise all its stunning socialist achievements before the entire system and empire collapsed under the weight of its own spectacular failures.”

To the former prime minister, the damage socialism can cause is still fresh in his memory. After all, he was the first prime minister in 60 years to not subscribe to the ideology. And thanks to him, Sweden’s capital gains taxes were cut to 30 percent and corporate taxes to 28 percent.

Bildt also privatized several state-owned industries, deregulated multiple sectors of the economy, allowed people to invest portions of their pension, and introduced school choice policies, improving the country’s education system.

After Bildt, Sweden, which had completely lost its host of entrepreneurs thanks to business taxes that sometimes exceeded the 100 percent mark, once again flourished. Even as Social Democrat successor Ingvar Carlsson took over.

Seeing the wonderful changes just a few years worth of reform had done, Carlsson kept Bildt’s policies in place. And business start-ups rose nearly 25 percent as a result.

Unfortunately, politicians like Sanders like to use countries like Sweden as examples of how socialism can work.

The same politician who, in the late 1980s, praised breadlines and celebrated the Soviet Union for forcing its youth to dedicate their whole lives to communism, now tells Americans that the so-called “Nordic model” of socialism can and will work in America. And yet, he seems clueless to the fact that the policies he pushes don’t mirror those adopted by the countries he celebrates.

As explained by Danish Prime Minister Lars Løkke Rasmussen in 2015, countries like his Denmark “[are] far from [socialist planned economies].”

“Denmark is a market economy,” he added. And as demonstrated by Mises in Economic Policy: Thoughts for Today and Tomorrow , there’s “no western, capitalistic country in which the conditions of the masses have not improved in an unprecedented way.”

In other words, to claim the successes of Nordic countries are due to socialism is nothing but a lie.

As the Acton Institute pointed out, Sanders’ ideology, the same ideology upheld by Ocasio-Cortez and countless others who are now legislating in Washington, D.C., is about putting statism before freedom.

In order to apply the policies they push, we would have to relinquish complete control over our lives, allowing the state to squelch artistic expression, private initiative, and destroy any incentive left compelling people to serve each other better and more efficiently.

Is that the world we want to live in?

Originally published by Advocates for Self-Government.

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Laurence Vance on Libertarianism

03/03/2019David Gordon

The Free Society. By Laurence M. Vance. Vance Publications, 2018. Xii + 468 pages.

Laurence Vance is best known for his work as a specialist on the King James translation of the Bible, but he is also an outstanding writer on libertarian issues. In The Free Society, he has collected a large number of his articles for the period 2005-2017, almost all of which first appeared first in LewRockwell.com or the Future of Freedom Foundation. The articles are well worth reading, as they display the author’s sharp mind and consistent outlook.

Vance, who is a conservative Christian, maintains that the Bible supports a libertarian viewpoint. That opinion puts him at odds with those religious believers who wish to use government to enforce personal morals, but Vance is undaunted: “So why do I think that religion---in this case the Christian religion—is compatible with libertarianism? Let me give you two verses of Scripture, one from the Old Testament and one from the New, since Christians accept the authority of both: Proverbs 3:30--- ‘Strive not with a man without cause, if hath done thee no harm.’   1 Peter 4:15----But let none of you suffer as a murderer, or as a thief, or as an evildoer, or as a busybody in other men’s matters.’ These verses, my friends, embody the essence of libertarianism. Don’t kill anyone, don’t take what’s not yours, don’t do anything wrong, don’t stick your nose into someone else’s business, and don’t bother anyone if he hasn’t bothered you.” (p.20)

Libertarianism, Vance, explains, should be taken in a strict way. The welfare state should be rejected, for example, not mainly because it is economically inefficient but because to take from some to give to others violates people’s rights. “Of course, I oppose welfare payments! It is immoral to take from those who work and give it to those who don’t---even when the government does it. All charity should be private and voluntary.” (p.39)

One final illustration of Vance’s uncompromising adherence libertarian principle: “Since no parent in the United States is forced to send his child to a government school, it is a myth that we need ‘school choice’(meaning vouchers) so that children can get out of an unsafe, failing government school.” (p.85)

Vance is a consistently illuminating writer, and I highly recommend his work.

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ASSC Mises Lecture: What Entrepreneurship Means for Economics

02/28/2019Per Bylund

Every year Grove City College hosts the Austrian Students Scholars Conference, bringing together students to present their own research papers written in the tradition of the Austrian school.

Mises Institute Fellow Per Bylund delivered a keynote speech this year titled "What Entrepreneurship Means for Economics."

Video of the talk is available here. 

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Trump Treasury Secretary Supports French Tax Harmonization Scheme

Much to the consternation of some Republicans, I periodically explain that the Trump Administration is – at best – a mixed blessing for supporters of limited government.

It’s not just that Trump is the most protectionist president since Herbert Hoover, though that’s certainly a damning indictment.

The Trump White House also has been very weak on government spending, and the track record on that issue could get even worse since the President supports a new entitlement for childcare.

Yes, there are issues where Trump has been a net plus for economic liberty.

The overall regulatory burden is declining (though the Administration’s record is far from perfect when looking at anti-market interventions).

And the President gets a good mark on tax policy thanks to the Tax Cut and Jobs Act.

But Trump’s grade on that issue may be about to drop thanks to horribly misguided actions by his Treasury Secretary, Steven Mnuchin. Here are some excerpts from a report by France 24.

US Treasury Secretary Steven Mnuchin said Wednesday that the US supported a push by France for a minimum corporate tax rate for developed countries worldwide… “It’s something we absolutely support, that there’s not a chase to the bottom on taxation,” Mnuchin said in Paris after talks with Finance Minister Bruno Le Maire. Le Maire said last month a minimum tax rate would be a priority for France during its presidency of the G7 nations this year. …France in particular has railed against Amazon, Google and other technology giants that declare their European income in low-tax countries like Ireland or Luxembourg.

Needless to say, it’s utterly depressing that a Republican (in name only?) Treasury Secretary explicitly condemns tax competition.

Politicians and their flunkies grouse about a “race to the bottom” when tax competition exists, not because tax rates would ever drop to zero (we should be so lucky), but because they don’t like it when the geese with the golden eggshave the ability to fly away.

They like having the option of ever-higher taxes.

In reality, the world desperately needs tax competition to reduce the danger of “goldfish government,” which occurs when vote-seeking politicians can’t resist the temptation to destroy an economy with too much government (see GreeceVenezuelaZimbabwe, etc).

I’ll close with a remarkable observation.

The Obama Administration supported a scheme that would have required American companies to pay a tax of at least 19 percent on income earned in other jurisdictions, even if tax rates were lower (as in Ireland) or zero (as in Cayman).

This was very bad policy, completely contrary to the principle of “territorial taxation” that is part of all market-friendly tax reforms such as the flat tax.

Yet Trump’s Treasury Secretary, by prioritizing tax revenue over prosperity, is supporting a proposal for global minimum tax rates that is much worse than what the Obama Administration wanted.

And even further to the left compared to the policy supported by Bill Clinton.

P.S. I’m sure the bureaucrats at the European Commission and Organization for Economic Cooperation and Development are delighted with Mnuchin’s policy, especially since American companies will be the ones most disadvantaged.

Originally posted at International Liberty
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No, You Don't Need a $200K College Degree

02/26/2019Ryan McMaken

A female supporter of Bernie Sanders is advertising on Twitter the fact that she went 226,000 in debt to get a college degree in speech pathology.

Those who posted the video apparently believe that this ought to be interpreted as a convincing example of how hard it is to pay for college these days.

There is no doubt that a college education is not free. But publicly admitting that one owes nearly a quarter of a million dollars for (apparently) just a four year degree will hardly be convincing for anyone familiar with the actual cost of attaining a college degree.

After all, according to the US Department of Education, "annual current dollar prices for undergraduate tuition, fees, room, and board were estimated to be $16,757 at public institutions."

That's an annual amount. So, rounding up to $17,000 and multiplying by four, we get $68,000. This, mind you, includes tuition, fees, room, and board. It's an all inclusive package. So, assuming a student does virtually no outside wage work at all during his or her college career, the student would still get fed, and still have a place to live, while attending school full time.

But, let's say that this amount is low for many areas. Let's look at a higher-cost region of the country. According to the institution's website, an education at the University of Colorado at Boulder is estimate to cost $28,750 for a year's worth of tuition, room, board, books, and fees. Over four years, that's $115,000. (CNN estimates a four-year degree, plus room and board, costs $105,000.)

As most people know, however, paying for on-campus room and board is often more expensive than living with roommates off campus. And it's certainly far more expensive than living at home and commuting to work. But, since living at home isn't an option for everyone, many people share housing and take on part time work to off-set the cost of school.

In other words, a $115,000 price tag (and resulting debt) for an all-inclusive education is at the high end of what a total debt load would be for a reasonable person. It also reflects a situation in which a person spends all four years at a costly four-year institution.

In real life, of course, a college education doesn't require four years in cases outside the most difficult degrees. Many states employ "guaranteed" transfer programs which enable secondary students to take basic courses at community colleges at lower tuition rates. Freshmen can also knock out 30 or so credit hours and enter the more expensive four-year school as a sophomore. (In-state community college tuition is around half the price of tuition at a public research university.) And, of course, there are numerous programs which allow students to test out of courses through AP credit, CLEP exams, and more.

Some critics of my analysis here might say "Well, what if I want to go to a private school? Won't that cost more?" It certainly will.

According to the Department of Education, an all-inclusive year of (a non-profit) private school costs $43,065. (For-profit institutions are cheaper.) A full four years at one of these places is likely to cost over $170,000. Tuition alone at a posh second-tear private college like Bowdoin College is a whopping $50,000 per year. (Note the case of this woman who has 100K of debt for her women's studies degree at NYU.)

Indeed, the private school option appears to be the only way one might end up with $226,000 in student loans. Either that, or a student transfers around to various schools, starting from scratch each time.

But why should those people be taken seriously when they complain about their tuition and debt? People who attend private school already have countless tax-subsidized options available to them. Instead, they choose to attend a private school, and want the taxpayers to subsidize their debt instead. (Most private schools are also subsidized with a variety of grants, but that's another issue.) And then we're supposed to feel sorry for them when they end up with a lot of debt.

This is especially unconvincing when we consider that the data on college degrees and earnings shows that where one attains a degree has little effect on earnings. In other words, the extra expense incurred to attend Picturesque University in some charming Midwest town does nothing to actually increase earning potential.

The educational benefits of taking on these additional costs, however, are negligible.

Meanwhile, of course, more responsible consumers attend what the Europeans call a "polytechnic" where students attend to get degrees and quickly and painlessly as possible. The publicly subsidized versions of these schools exist to allow students with real responsibilities to get degrees and get on with their lives at a manageable cost. In other words, taxpayers are already paying for the college educations of students at public universities. They don't need to be lectured on how they ought to pay even more so little Johnny or little Susie can also get a designer education at a private school as well.

There are real reasons to be concerned about the cost of higher education. Student loans have actually been a significant part of the problem by making students less price sensitive, thus pushing up prices for everyone.

It might also be helpful to weigh the costs and benefits of cost-saving measures used by Europeans, such as larger class sizes, longer wait times, and fewer amenities at colleges.

But it's not at all convincing when we're told that we ought to be subsidizing higher education even more for those students who choose to spend far and above what the average cost of what is an already-subsidized higher education.

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Confidence in British Politics is Collapsing, That May Not Be a Bad Thing

02/26/2019Claudio Grass

One of the most commonly cited arguments initially against Brexit, and now against a no-deal scenario, is the towering threat of businesses leaving the UK. A great many campaigners and leading figures of the Remain camp have warned voters time and time again of the dangers to British industry and ultimately to their jobs. They will often point to early evidence of such a shift, to companies moving either their headquarters or part of their operations to Germany, the Netherlands or other EU member states. They also like to highlight the concerns of various business leaders that have taken the Remain position, while some have supported the idea of a “People’s Vote”, a second referendum that they hope will reverse the original decision.

The dire warnings and the near-apocalyptic visions of post-Brexit destruction have managed to gather wide media coverage, with panic-stricken headlines like the BBC’s “Brexit threat to sandwiches” and the Independent’s “Butter, yogurt and cheese could become occasional luxuries after Brexit”. However, what is hardly ever mentioned is the failure of most of these projections to materialize, at least so far. What is also frequently omitted in the discussions over the fears of businesses leaving the UK, are the departures that already took place while the UK was still in the EU.

Much Ado About Nothing?

Early in the Brexit campaign, Remainers published extensive research and projections regarding the potential job losses and company relocations should the Leave camp prevail. After it did, the numbers kept coming, with predictions of a mass exodus of jobs and business. The finance sector soon emerged as the one most likely to suffer the heaviest losses, with terrifying analyses like that by Oliver Wyman, warning that a hard Brexit could result in a loss of 75,000 jobs and £10bn of tax revenue. And yet, by last September, only 630 UK-based finance jobs had actually moved, according to a Reuters survey, a mere fraction of the estimates. More recent projections have been slashed, reflecting a much milder impact and highlighting the degree of exaggeration in previous predictions.

Overall, the concerned voices and the doom-and-gloom narratives coming out of the business world have also been largely proven hyperbolic and inaccurate, at least up to this point. Moreover, strong counterarguments have gained traction, as a few well-respected and successful businessmen and women have publicly adopted a much calmer and more confident outlook for the post-Brexit reality in the UK. Sir James Dyson, billionaire inventor, has described his expectations for trade as “enormously optimistic”, while Sir Jim Ratcliffe, the wealthiest man in the UK, also expressed similar views: “The Brits are perfectly capable of managing the Brits and don’t need Brussels telling them how to manage things”.

The Split in the Business World

At the same time, it has become apparent that the interests of small businesses and large corporations are not at all aligned when it comes to Brexit. Among the most vocal and fervent Remainers and supporters of the idea of a second referendum, one finds a large share of executives and representatives from the corporate arena, together with industry lobbyists. On the other hand, small and family business owners are much more likely to support to be optimistic over Brexit. According to the Daily Telegraph’s Business Tracker, small firms have a positive outlook, despite mounting concerns over Brexit, as positive sentiment vastly overshadowed negative sentiment in 2018.

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All in all, small business owners have been inclined to be more Eurosceptic than their much larger and multinational counterparts. That sentiment reinforces the idea that Small and Medium Enterprise (SME) owners are much more in touch with the realities on the ground than senior figures in FTSE companies or Tech entrepreneurs, whose views were statistically massively out of sync with the public.

Official figures from YouGov, also indicate that the smaller the company, the less likely they are to support retaining EU membership. Such findings are even more significant when one considers that SMEs account for 60% of all private sector employment in the UK and 47% of private sector turnover.

Sins of Omission

During the many debates on the future of the business world, a lot of attention and airtime is given to the fears that businesses will leave as a result of Brexit. However, the ones that have already left during the country’s membership, are seldom mentioned. Although various claims and reports on this issue are riddled with inaccuracies and have wildly exaggerated the number of these relocation cases, there is still a factual basis and numerous solid examples of instances when EU funding or other incentives encouraged companies to move operations out of the UK.

In 2012, Ford relocated the production of Ford Transit vans to a factory in Turkey, a move that was facilitated by an £80m loan approved by the European Investment Bank and cost the UK more than 500 jobs. In 2011, Twinning’s Tea tried and came very close to securing a €12m grant for a factory in Poland, while planning to cut 400 jobs in the UK. The grant was denied at the last minute, after accusations of breached EU rules and the subsequent media attention. In 2018, EU leadership in Brussels approved a bid by Slovakia to provide €125m in funding for a new Jaguar Land Rover plant, a move that has raised considerable objections and concerns over lost jobs in the UK.

Lost Faith in Government

As the government’s approval rating has taken a nosedive since the negotiations began, the public’s doubts over the leadership’s ability to handle the exit process and to deliver on what they voted for have spiked. After Theresa May’s performance during the talks with the EU and her failure to secure the assurances she promised, confidence in her government has plummeted. Official statements and commitments have largely lost their credibility, to the point that despite repeated assurances against a no-deal exit, the public still believes this is the most likely scenario. Moreover, a survey by the Enterprise Investment Scheme Association (EISA) showed that 59% of UK investors do not think the government is doing a good job in negotiating a deal that would protect the interests of the UK’s financial services sector.

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Source: Bloomberg, Opinium

At the same time, the EU is sticking to its extremely hard stance on the matter, firmly refusing any meaningful concessions and sharply focused on making an example out of the UK, rather than achieving a sustainable and mutually beneficial deal. Recent comments by European Council President Donald Tusk exemplified this vindictive position, as he gleefully mentioned a “special place in hell” for “those who promoted Brexit”.

No matter how this ends, the damage already done to the British public and the country’s social cohesion is considerable. Deep divisions, fuelled and aggravated by both the media and by political figures, will not heal easily. Civilized conversation and free debate on the topics that really matter have long given way to personal attacks and name-calling. Such a devolution and corrosion of civil dialogue is bound to have a lasting and widespread impact on British society and on the country’s political future.

However, despite all the noise, one thing is clear: the United Kingdom will eventually regain its national sovereignty, one way or another. Delays are likely, and so are potential political maneuvers to void the public’s will, which are destined to fail. Today, the main focus might lie in a Hegelian dialectic, in divisive tactics and in massive fearmongering campaigns, nevertheless, the country is on track to free itself from the centralized authority of Brussels. The only real question is how this regained freedom will be channeled. Will the government use it to enforce an even more centralized system than today on a national level, or will it empower the individual and take a turn towards more personal responsibility and self-determination?

Either way, it is bound to be a bumpy and eventful road ahead for the UK and for the EU as well, as the scars of Brexit are still fresh. Dissatisfaction with Brussels is far from a confined phenomenon and dissenting voices continue to get louder all over the continent. From an investor’s perspective, preparing for the very likely political and economic turbulence that awaits is essential. With European markets under pressure, a near-impotent Central Bank and a currency that will struggle when the next downturn commences, physical precious metals and their lack of counterparty risk provide a much-needed hedge and a way to protect one’s wealth.

Although it’s impossible to predict the ultimate outcome of this historic turning point, Britain appears to be on the right track, especially if the British people will remember and hopefully be guided by Lord Acton’s words: “Liberty is not a means to a higher political end. It is itself the highest political end.”

Originally published at ClaudioGrass.ch
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