Power & Market

Central Banks Buy Gold, Baltic Dry Index Sinks

02/13/2019Doug French

David Rosenberg tweeted a graph of the plunging Baltic Dry Index with the comment, “Is there a more deflationary chart than the Baltic Dry Index of global freight rates?”


Perhaps, or there is the New York Times business headline, “ Some Central Banks Have Gold Fever, and It Might Be Sensible .”

However, central banks are notoriously bad in timing gold purchases.

Swaha Pattanaik slams gold enthusiasts while praising central bankers.

Gold bugs aren’t always rational. That’s not the case for central banks, whose purchases of the yellow metal last year were the highest since the United States broke the link between gold and the dollar in 1971.

Pattanaik gives us the numbers.

Central banks bought 651.5 tonnes of gold in 2018, the second highest annual total on record and up 74 percent from the year earlier, according to the World Gold Council. As in the past three years, Kazakhstan, Russia and Turkey were significant buyers, but were last year joined by the likes of Hungary, India and Poland.

Gordon Brown’s infamous sale of UK gold cost the Bank of England nearly £5 billion.

Christopher Hope wrote for The Telegraph in January 2009,

The sale of more than half of the country's gold reserves between 1999 and 2002 has proved to be deeply controversial. Critics say that signalling such a large sale of bullion to gold traders helped to drive the precious metal to a 20-year low. In 17 auctions, Mr Brown as Chancellor of the Exchequer sanctioned the sale of 395 tonnes of gold.

When commenting, please post a concise, civil, and informative comment. Full comment policy here

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.

When commenting, please post a concise, civil, and informative comment. Full comment policy here

Come on Mr. Krugman, Give Real Libertarianism a Chance

01/30/2019Walter Block

Professor Paul Krugman asked a very important question in his January 10 New York Times essay “Trump’s Big Libertarian Experiment; Does contaminated food smell like freedom?".  In his opinion piece, Krugman maintained that the recently concluded governmental shutdown demonstrated the hypocrisy of Republicans. The Nobel Prize winning economist also defended a plethora of government programs such as the Small Business Administration, food stamps, the FDA and socialized medicine.

As a libertarian, I strongly and enthusiastically support his claim of Republican hypocrisy. With regard to most of the rest of his assertions, I respectfully disagree. Let us consider the specifics.

Mr. Krugman noted that according to Ronald Reagan government was the problem, not the solution. Yes, Ronald Reagan’s rhetoric was strongly libertarian. But talk, no matter how eloquent, is cheap. When he was governor of California, that state’s budget increased, not the other way around. Ditto for when he was president of the United States and federal spending zoomed. Krugman is absolutely correct in asserting that “Republicans have echoed his rhetoric ever since,” but they do not follow through. They held the Presidency and both houses of congress for the last two years, and nary was there any noticeable reduction in government expenditure. However, fair is fair: President Trump did eliminate a few onerous business regulations and lowered tax rates somewhat.

But Krugman’s claim that the shutdown in effect provided some sort of natural experiment for libertarianism is wide of the mark. The idea, here, is that with government out of the picture, if the libertarians are correct, the free enterprise system will quickly ride to the rescue and take up the slack. But no. When government is giving it away for free down the street (courtesy of the long suffering taxpayer), it is difficult, just about impossible, for private firms to provide goods and services competitively. The latest shutdown lasted longer than any previous one. The strong expectation is, now that it has ended, that there will either be a compromise on the wall (a trade for the status of the DACAs), or Trump will build it as part of his claim of national emergency. A much fairer test of this “big, beautiful libertarian experiment” would be if there were a credible announcement that the government would end these initiatives on a permanent basis. Even better would be an announcement from Trump that he would work with Congress to establish free enterprise zones with an eye on actually experimenting with true libertarianism. 

This is the entire point of free enterprise zones: government taxes, regulations, prohibitions, do not apply in a small test area, say, the size of Rhode Island, maybe located in the wilds of Alaska, Nevada or Wyoming, or in that entire state. There would be no laws there against drugs, sex between consenting adults; no welfare for anyone; the whole libertarian nine yards would be implemented. I challenge Mr. Krugman, a fair minded man, to call for exactly this sort of “experiment” instead of the present one he offers almost tongue in cheek, which does not at all qualify for that honorific. Ceteris was hardly paribus, during the recently ended shut down.

Krugman mentioned that SBA loans and farm subsidy checks were no longer being sent out during the partial shutdown, but he was curiously silent as to whether or not he favors these elements of “crony capitalism” that Republicans, but certainly not libertarians, support. The case against them is easy to make for left-liberals: They take money from all taxpayers, and direct the funds to the relatively rich. Libertarians oppose welfare programs both for the poor (they can creative incentives for family break up) and for the wealthy. We all have a word for compelling some people to give money to others against their will: theft. But only libertarians employ it when the government is involved as intermediary. This opposition holds true whatever the wealth of donors and recipients. Both of these programs, farm subsidies and SBA, should be abolished in their entirety; immediately, if not sooner. Moreover, they are both elements of central planning and government picking winners (Solyndra, anyone?). Have we learned nothing from far better “natural experiments” than the one alluded to by Krugman: that between East and West Germany, North and South Korea? 

Let us now consider the Food and Drug Administration, a shibboleth amongst so-called “progressives.” Why should we be forced to put all our eggs in one basket: to trust the views of but one institution for the all-important task of ensuring safety regarding these products? It is a basic premise of economics 101, to which even Mr. Krugman should adhere, that competition brings about a better result than a compulsory monopoly. That applies to all industries, certainly including the one tasked with ensuring food and drug safety.

Then there is the question of why FDA pronouncements should be compulsory. Why not, merely, advisory? How does it help the consumer to reduce options among medications? Our friends on the left side of the spectrum favor “choice” in the debate over abortion. Why not here, too? The FDA, along with programs such as compulsory Social Security, are profoundly incompatible with democracy, yet another favorite of this sector of the political spectrum. If people are so stupid as to require prohibitions of medicine deemed inappropriate by the FDA, not merely warnings, and cannot save for a rainy day or for their retirements, then it cannot be reasonable to give them the right to vote. On the other hand, if we entrust them with access to the ballot box, we cannot also logically think they need FDA advice, let alone prohibitions, or nanny state requirements that they save their money (put the Ponzi scheme elements of social security to one side). But even governmental advice is highly problematic. Nowhere in the Constitution is there provision made for government to function as an Ann Landers.

Then, too, brand names are a source of security for quality of food and drugs. Who is really more responsible for insuring excellence, Pfizer, Heinz and McDonalds, or the FDA? If the former fail us, they will be heavily penalized, even bankrupted. When the latter fails they keep on going, just like the Energizer Bunny. (The Army Corps of Engineers is still in charge of the Mississippi River, even though it was the failure of their levies which led to the deaths of some 1900 people in late 1920s; were a private enterprise responsible for such a horror, it would have long ago have been replaced by a different business firm).

Nor must we sweep under the rug past FDA mistakes. For example, it failed to warn pregnant women of the morning sickness medicine thalidomide, which created birth defects. That was a Type I error, approving of a negative. Once burned, twice shy. As a result of that horror, the FDA has been busy manufacturing all sorts of type II errors: refusing to allow people to use safe medicines. That is, not until after years and years of very expensive testing. This pushes pharmaceutical prices through the roof, and deprives needy patients for long durations of unavailability. Many unnecessary deaths can be attributed to this failure of theirs. No, the FDA is nothing to brag about. It should be terminated and ashes sowed where once it stood. Milton Friedman indeed hit the nail precisely on the head when he condemned “the F.D.A.’s existence as an unwarranted interference in the free market,” as Krugman accurately states.

By the way, contrary to Krugman, Friedman always characterized himself as a small l libertarian, not a conservative. His intellectual and moral soldier in arms, Friedrich Hayek, wrote an essay “Why I am not a conservative.”

Professor Krugman opines that “libertarian ideology isn’t a real force within the G.O.P.; it’s more of a cover story for the party’s actual agenda.” This is only partially true. There are several libertarians now in the congress: Senator Rand Paul and Congressmen Justin Amash, Walter Jones and Thomas Massie. Dr. Ron Paul was a long time member of the latter institution. There is also the Congressional Freedom Caucus composed of many other libertarians as well as conservatives. Senator Paul is now widely discussed (not only within libertarian circles) as Donald Trump’s Vice Presidential running mate for 2020, instead of Mike Pence. Yes, libertarianism sometimes serves as a fig leaf for Republicans, but, this philosophy plays a role just a little bit more vital than that.

No truer words were ever said about all this than Krugman's: “In the case of the (Republican) party establishment, that agenda is about redistributing income up the scale, and in particular helping important donor interests. Republican politicians may invoke the rhetoric of free markets to justify cutting taxes for the rich and benefits for the poor … but they don’t really care about free markets per se. After all, the party had little problem lining up behind Trump’s embrace of tariffs … Stick it to the bums on welfare, but don’t touch those farm subsidies.” But this, of course, does not at all apply to libertarians.

Next consider health services, whether Medicare, Medicaid, Obamacare or the single payer system of Canada and much of Europe. Basic supply and demand analysis indicates that when prices are held below equilibrium, demand exceeds supply. Every freshman economics student can tell you that this means there is a shortage. And, a shortage there is, in these systems. In Alberta, Canada, both a woman and a horse she owned had kidney stones. Her pet was treated right away (there is no veterinary socialism in that country); were it not, she would have been arrested for animal cruelty. As for her, she had to endure several long months of pain, until she was treated. That is but one sad story in this tip of the iceberg.

Why is medical care so expensive in the U.S.? It is so for two reasons. One, we have covered above: the FDA boosts prices of medical drugs. Two, even more important, the strongest labor union in the country, the American Medical Association, practices restrictions on entry, similar to what the taxi cab crony capitalists attempt to do against Lyft and Uber, and downtown hotels vis a vis Airbnb. They strictly limit the intake of medical schools and their number. They strive mightily to ensure that highly qualified foreign doctors are not allowed to practice in this country. Eliminate their unwarranted powers, and there will be no felt need for medical socialism. Relative prices of computers, television sets, and other products of the somewhat free sectors of the economy continually fall. Next, perhaps, to banking, the health industries are the most highly regulated and prices remain high, there.

Professor Krugman ends on this note: “Knowing that the food you’re eating is now more likely than before to be contaminated, does that potential contamination smell to you like freedom?” I say, in contrast, if you want to be free of tainted food and drugs, the last thing we should rely on is the FDA. Yes, eliminate it, and allow the “magic of the market” as Ronald Reagan would say, to bring us security in this regard.

Originally published at Real Clear Markets
When commenting, please post a concise, civil, and informative comment. Full comment policy here

California Housing Funk Crosses Border to Nevada

12/27/2018Doug French

Las Vegas survives on visitors and immigrants. The housing market depends upon those escaping California taxes and regulation with thousands in home equity to bid up home prices in Nevada, in general, and Las Vegas, specifically.

The actual numbers, provided by WolfeStreet.com, are; 47,500 Californians moved to Nevada in 2017, while 23,800 Nevadans moved to the golden state. That’s a net 23,700 inflow from California or roughly 2,000 per month last year.

Why this matters is, as builder Toll Brothers indicated in a recent earnings call,

“California has seen the biggest decline. Significant price appreciation over the past few years, fewer foreign buyers in certain communities, and the impact of rising interest rates all contributed to this slowdown.”

Wolfe Richter writes ,

In California’s case, foreign migration is largely from Asia. These people come for jobs, particularly tech jobs, education, and opportunity, or to get themselves and some of their assets away from the long arm of their government.

And now the greatest fear of the housing industry in California is that this inflow from Asia is going to slow down. Even a small slowdown, with domestic out-migration as large as it is, could create massive demand problems for the housing market.

With California being Nevada’s primary feeder market, what happens in California won't stay there, but migrate to Nevada.

In fact, it already has. Eli Segall writes in the LVRJ ,

A total of 7,003 single-family houses were listed without offers at the end of November, up 1.2 percent from October and 54.3 percent from November 2017, according to a new report from the Greater Las Vegas Association of Realtors (emphasis added)

Andrew and Dennis Smith write in their latest Homebuilder’s Research Market Letter,

Resale listing inventory has sharply increased since August of this year. After sitting under two months worth of listings for roughly 17 straight months, our friends at Residential Resources are currently reporting 3.0 months worth of supply in the resale market. While historically a figure of six months has always been considered “normal,” some analysts now say we might need to put that number closer to four months with the efficiencies technology has injected into the home buying process. So, perhaps some might say that Southern Nevada is closer to a “normal” market than previously thought, at least in terms of supply.

Smith and Son also address the topic of builder cancellations,

This topic came back to mind a few weeks ago when we reported a cancellation rate of 29.5 percent across a sampling of 235 active new home communities. This was the highest weekly figure going back to at least 2015. A few days later a large scale builder told us they had their worst month for cancellations in memory, prompting a call from their corporate office.

Nevada went California blue in last month’s election. The Silver state has adopted the Golden state’s housing blues as well.

When commenting, please post a concise, civil, and informative comment. Full comment policy here

Can Renewable Energy Compete in a World of Rising Interest Rates?

12/19/2018Tho Bishop

The role of gas taxes in sparking the recent Yellow Vest protests in France pushed the political climate change agenda back into the spotlight. Less talked about is the growing global interest in coal power plants around the world, including by countries such as JapanSouth Korea, ChinaTurkey, and Australia. This is in spite of repeated assertions from "experts" that coal was a dying industry that would never return. 

What explains the turn around?

In the Wall Street Journal today, Rupert Darwall argues that the boom in renewable energy was an example of malinvestment generated from low interest rates globally.

The latest climate talks ended here Saturday, a day late, with agreement largely reached on a rule book to implement the nonbinding Paris Agreement. The bigger story is how the United Nations climate process is losing its battle with reality....

Explaining why the efforts thus far hadn’t bent the curve of rising emissions, the Potsdam Institute’s chief economist, Ottmar Edenhofer, said the fundamental reality was an oversupply of fossil fuels, making it harder for renewables to be cost-competitive with coal. An underappreciated factor, he suggested, is monetary policy. Zero interest rates act as an artificial stimulus to renewable energy, which is much more capital-intensive than gas and coal. To students of Austrian economics, it’s a classic malinvestment: When interest rates are suppressed below the natural rate, too much of the wrong sort of investment leads to a boom, then a bust.

As interest rates rise, renewable energy can’t compete without carbon pricing—economists’ magic bullet to solve global warming. Therein lies the biggest cause of despair at Katowice. 


Of course uncompetitive pricing in the face of growing economic headwinds will do nothing to reduce the exuberance of climate interventionists that are convinced renewable energy is key to saving the world, so it will be interesting to see what they do next.

While the political unrest in France is about much more than gas taxes, it did reveal the difficult reality of actually imposing climate change policies that directly increase the cost of living on low and middle class citizens

As populism continues to grow around the world, with Belgium’s prime minister resigning just yesterday, it's possible that the imposition of climate change policy becomes a new front in the political divide between political globalists and nationalists.


Dr. Robert Murphy on the Dubious Economics of Climate Change | Mises Weekends with Jeff Deist

For Climate Interventionists, New Taxes are Only the Beginning by Robert Murphy

Fear Global Warming? Markets Offer Our Best Chance for Survival by Ryan McMaken


When commenting, please post a concise, civil, and informative comment. Full comment policy here

Craft Beer with a Free-Market Character

As the microbrewery trend is seeing a rise everywhere in the world, 2018 saw the launch of the White Collar Brewing in Bucharest, in my native Romania. Behind the already highly acclaimed beers lies an interesting piece of information: the brewery is the entrepreneurial endeavor of an Austrian economist, professor at the Romanian-American University in Bucharest and former Mises Institute fellow, Bogdan Glăvan.

Bogdan’s business started as a passion for craft beers, filling in a gap in a domestic market saturated with mass-produced, bland tasting options. Although he built it alongside his lifelong dedication to scholarship in the tradition of Mises and Rothbard in his academic profession, the two passions are not as separate as you might expect.

First, one of the beers is named “Zero Taxe” (eng. Zero Taxes), a nod to the main policy recommendation of any consistent Rothbardian. Bogdan also recommends it to be enjoyed together with Mises’s Human Action. Some of his customers also subscribe to this view and their recommendations on the brewery’s homepage are equally witty: [The beer] is so good, the government should nationalize it and redistribute it to all its citizens. IPA for the people!”

bogdan 3.jpg

Second, Bogdan also uses his now daily experiences as an entrepreneur to point out the suffocating bureaucratic environment in Romania and the regulatory obstacles businesses must overcome. For instance, a recent experience has taught him that, although all water supplies are already controlled by a government monopoly and paid for by taxes, entrepreneurs must—beside having special filters and production processes in place—also periodically collect and send water samples to a laboratory, as well as pay for them to be tested, in order to obtain a certificate from the national authorities allowing them to use the water supply in the brewing process.

Below is a picture Bogdan shared a while back with the caption: “Do you want to know how to produce beer in Romania? Here’s how!

bogdan 1.jpg

Best of luck to White Collar Brewing in the future, and much patience to its owner in navigating the treacherous waters of government regulations.


When commenting, please post a concise, civil, and informative comment. Full comment policy here

Colorado's GOP Bloodbath, Explained

11/07/2018Ryan McMaken

Yesterday in Colorado, voters rejected numerous proposed taxes and government regulations. One of the biggest was Proposition 112, which was an anti-fracking measure that would have outlawed fracking in much of the state. That failed, with 57 percent voting no.

Meanwhile, a proposed tax to fund government schools — for the children! — failed with 55 percent voting no. Two separate new taxes to fund new transportation projects failed with neither mustering more than 40 percent approval. There was a pro-hemp-industry measure, which passed with 60 percent approval, which is designed to allow more expansion for hemp businesses. 66 percent also voted against new proposed limits on campaign funds. Nor did voters look kindly on an effort to reduce the minimum age for serving in the state legislature to 21 (it's currently 25).The "youth vote" strikes out yet again.

So looking at these pro-business, anti-tax, anti-youth vote results, one might think, "golly, those Republicans must have done pretty well in Colorado!"

Think again.

Last night's election was an absolute bloodbath for the GOP in Colorado.

The same voters who voted to defeat all statewide tax increases also voted to elect Democrats to every single statewide office, including Governor, AG, and Treasurer. The Dems maintained control of the House, and they managed to flip a few seats to get control of the Senate.

With the governor, it wasn't especially close. Jared Polis won with 52 percent, but his opponent, Walker Stapleton, couldn't even muster more than 45 percent. He performed more poorly than all other statewide GOP candidates, all of whom got 47 percent.

With Polis at the top of the ticket, and with Stapleton as such an embarrassingly weak candidate, this hurt the rest of the GOP candidates.

But how could an electorate so opposed to taxes vote for so many Democrats? The answer is that Democrats ran as fiscally responsible moderates, while Republicans largely ran as conservative culture warriors.

This could be seen in the campaign ads of the two gubernatorial candidates. Stapleton, who should ask for his money back from his campaign advisors, ran with the tag line "A conservative who gets things done!" Stapleton should have asked his advisors when was the last time anyone won the governor's mansion playing up his conservatism. The answer is maybe one time: 2002, when incumbent Bill Owens crushed hard-left candidate Rollie Heath.

When Owens ran the first time, though, his campaign had a laser-like focus on three things: increase infrastructure spending, lower taxes, increase school accountability. The end. He avoided talking about anything else. And he won with a less-than-one-percent margin in the 1998 race.

Using that sort of simple approach, Owens remains the only Republican to win the governorship since John Love back in the 1960s. And Love was no "conservative." He signed one of the nation's most expansive pro-abortion statutes at the time.

Since then, when Democrats run as moderates — as was the case with Roy Romer (1987-1999) and John Hickenlooper (2011-2019) — they win.

And Polis ran as a moderate. I know this because I live in a core city (i.e., not the suburbs), which means the marketing consultants assume I'm likely to vote Democrat. So, I was fed Polis ads before pretty much every YouTube video I've seen in the past two months. I can even quote from memory Polis's tag line: "Jared Polis: saving you money!"

And who's going to vote against that? Had I been less cynical, given the content of the ads, I probably would have concluded, "this Polis guy sure sounds reasonable!" What Polis certainly did not do was say "Jared Polis: a liberal who fights for reform!" or something like that. It would have been disastrous.

In fact, the anti-Polis ads said Polis was "too radical for Colorado." The problem is, few non-Republicans believed it. This is especially the case since Polis's Congressional career was, as far as Washington politicians go, not especially terrible.

Moreover, Polis was helped by how awful a candidate Walker Stapleton was. If you assumed that someone named "Walker Stapleton" was from the manicured lawns of a manse in Connecticut, you would be right. Stapleton is a cousin of George W. Bush, and while he is the grandson of a five-term mayor of Denver, Stapleton is not from Colorado. He moved to Colorado just six years before he decided to run for statewide political office and begin his march toward his rightful place — in his mind — at the top of Colorado's political establishment. Worse yet, his mayor grandfather is largely notable for being a high-ranking Klansman. And while you might say "gee, a man shouldn't be punished for who his grandfather was," it was just one more thing that made Stapleton's biography so un-compelling.

Polis, by the way, is fabulously wealthy, and while he was born rich, he has managed to cultivate an image (accurately or not) of being someone who turned a small fortune into a large fortune in mundane industries like the greeting card and florist industries. In Colorado, no one begrudges people with self-made riches. But wealthy carpetbaggers from east-coast political families don't fare quite so well.

Polis's riches, though, allowed him to spend massively on political ads, which is why even people like me saw hundreds of those ads telling us what a reasonable, fiscally responsible fellow he is. Stapleton, meanwhile, spent time talking about his conservatism and "sanctuary cities" and other things few Coloradans have ever cared about. (I suppose there's some comfort for the GOP in the fact that even with all his spending, Polis still only got 52 percent.)

But, if you seek victory as a Colorado candidate, offer the voters tax cuts, offer the voters shiny new roads (paid for without tax increases). But whining about immigrants never did much to win anyone statewide office around here. This isn't Trump country. It's not the Bible Belt (and never has been). But as the voter-initiative results showed, most Coloradans aren't fans of taxes or commie rhetoric about business owners. One would think that's a fairly easy winning formula to figure out.

It's unknown if the state GOP will ever get its act together again and run some decent candidates, but one might note that the voters of Maryland just re-elected a Republican governor. If a Republican can win in Maryland of all places, what does that tell us about the Colorado GOP?

When commenting, please post a concise, civil, and informative comment. Full comment policy here

Censorship and Gun Control Will Not Make Us Safe

11/06/2018Ron Paul

Sadly, but not unexpectedly, the mass shooting at the Tree of Life Synagogue in Pittsburgh is being used to justify new infringements on liberty. Of course, opponents of gun rights are claiming this shooting proves America needs more gun control. Even some who normally oppose gun control say the government needs to do more to keep guns out of the hands of the “mentally ill.” Those making this argument ignore the lack of evidence that background checks, new restrictions on the rights of those alleged to have a mental illness, or any other form of gun control would have prevented the shooter from obtaining a firearm.

Others are using the shooter’s history of posting anti-Semitic comments on social media to call for increased efforts by both government and social media websites to suppress “hate speech.” The shooter posted anti-Semitic statements on the social media site Gab. Gab, unlike Twitter and Facebook, does not block or ban users for offensive comments. After the shooting Gab was suspended by its internet service provider, and PayPal has closed the site’s account. This is an effort to make social media websites responsible for the content and even the actions of their users, turning the sites’ operators into thought police.

Some social media sites, particularly Facebook and Twitter, are eager to silence not just bigots but those using their platforms to advocate for liberty. Facebook has recently banned a number of libertarian pages— including Cop Block, a site opposing police misconduct. Twitter has also banned a number of conservatives and libertarians, as well as critics of American foreign policy. Some libertarians say we should not get upset as these are private companies exercising private property rights. However, these companies are working with government and government-funded entities such as the Atlantic Council, a group funded by NATO and the military-industrial complex, to determine who should and should not be banned.

The effort to silence “hate speech” is not just about outlawing racist, sexist, or anti-Semitic speech. The real goal is to discredit, and even criminalize, criticism of the welfare-warfare state by redefining such criticism as “hate.” It is not just progressives who wish to use laws outlawing “hate speech” to silence political opponents. Some neoconservatives want to criminalize criticism of Israel for the nonsensical reason that any criticism of Israel is “anti-Semitic.” Other right-wing authoritarians wish to expand hate crime laws to include crimes committed against police officers.

Ironically neoconservatives and other right-wing authoritarians are among the biggest purveyors of real “hate speech.” What could possibly be more hateful than speech advocating perpetual war? Cultural Marxists are also guilty of hate speech with their calls for both government and private violence against political opponents, and for the use of government force to redistribute property. Just about the only individuals advocating a political philosophy not based on hate are those libertarians who consistently advance the non-aggression principle.

Preserving the right to free speech is vital to preserving liberty. All who value freedom should fight efforts to outlaw “hate speech.” “Hate speech” laws may initially be used to target bigoted and other truly hateful speech, but eventually they will be used to silence all critics of the welfare-warfare state and the authoritarian philosophies that justify omnipotent government. To paraphrase Ludwig von Misses, libertarians must fight hate speech—including the hate speech emanating from Washington, D.C.— with the “ideas of the mind.”


When commenting, please post a concise, civil, and informative comment. Full comment policy here

Capitalism Makes Us More Humane

10/19/2018Ryan McMaken

Why is it that starving Venezuelans are eating dogs while Americans are rescuing dogs from hurricanes?

This is an audio version of the article "Capitalism Makes Us More Humane".

Find more Radio Rothbard on iTunes, Stitcher, Soundcloud, Google Play, and via RSS.

Capitalism Makes Us More Humane

When commenting, please post a concise, civil, and informative comment. Full comment policy here

Cop Amber Guyger Is One Reason We Need Private Gun Ownership

09/12/2018Ryan McMaken

When advocates of gun confiscation complain about "guns" and say "no one needs a gun for x" all they are really saying — whether they understand it or not — is "I want only cops and soldiers to have guns."

While gun control advocates often claim to be suspicious of police power, logic dictates that the gun-confiscation position is simply the position that only government employees should have guns. Similarly, more mild gun-regulation positions are designed to increase the coercive power of government over the taxpaying citizenry, and to lessen access to private sources of self-defense — thus increasing private-sector dependence on government police for "protection."  The gun-regulation position is premised on the idea that only the police can really be trusted with gun ownership.

And what a terrible position that is.

Richard Black could tell us more about this. Were he still alive today. After Black killed a home intruder in self-defense, he called the police. Sometime later, the police showed up and shot Black dead in his own home.

The dead victims of the school shooting in Parkland could tell us more also. When sheriff's deputy Scot Peterson — who was specifically supposed to provide security at the school — was faced with an armed intruder, he ran away and hid.

And now we hear about the case of Amber Guyger. Guyger is the police officer who confused another man's apartment for her own. She trespassed on the man's property, saw his "silhouette" and then open fired. Her victim, Botham Shem Jean, died.

A Double Standard

In cases like these, police could not be counted on to use firearms appropriately — or they failed to use them to defend the innocent.

Moreover, this latest case serves to illustrate, yet again, the enormous double standard that is employed when police behave in ways that any private citizen would be roundly and viciously denounced for. Were a private citizen to do what Guyger did, his actions would be provided as more evidence that private ownership of guns ought to be curtailed.

Guyger has claimed in her defense that she "gave verbal commands" to her victim before she shot him.

That this should even be considered any sort of "defense" requires a special kind of deference to government. But this is how police officers and their defenders think. If a normal person is woken or surprised in the middle of the night by an intruder with a badge, the victim is supposed to know — by magic, apparently — that the intruder is a police officer and then do what you're told. Never mind that the person might just be claiming to be a police officer.

For police of course, private citizens are always supposed to respond calmly and obediently when screamed at by multiple police officers. Often, the victims receive conflicting orders from police.

Similar rules do not apply to police. Police — we are told — "must make split-second decisions under extreme pressure. "In other words, if the police make a poor decision under pressure, they're heroes who did what had to be done. If a private-sector taxpayer like Richard Black makes the "wrong" decision? He deserved to die.

The law reinforces this view as well. It is extremely rare for a police officer to be prosecuted for gunning down unarmed victims. In the Black case, the police chief has already blamed the 73-year old war veteran for his own killing. The chief's reasoning? Black, who was hearing impaired, should have responded faster to verbal police commands. Case closed.

Even when a trigger-happy police officer is brought up on charges, the law is written in such a way as to make it extremely hard to thread that needle. Members of the jury are easily browbeaten into coming down on the police officer's side. We saw this in the case of Daniel Shaver, an unarmed man who was crawling and begging for his life when gunned down by police. Police officer Philip Brailsford was so fearful of this weeping, trembling man on the ground that Brailsford just couldn't keep himself from opening fire. The jury's verdict? Not guilty.

What If a Private Citizen Did the Same Thing?

But imagine if a private citizen did what Guyger did. If a private citizen trespassed into someone's house, screamed at the residents, and then opened fire — regardless of the details in the case — we all know what would happen.1 We'd all be told we need to have "a national conversation" about how there are "too many guns" in private hands. If the whole thing were shown to be an accident, pundits would endlessly be quoting statistics designed to make it look as if guns in private hands lead to countless accidental shootings. But since it was a police officer who did the shooting, we'll hear about none of this. Why? Because gun control does nothing to control the use of firearms by police. Although we're repeatedly told that guns in private hands lead to spades of accidents, mistaken shootings, and overly-aggressive gun owners, none of this applies when that gun is in government hands. Then it's all just unavoidable. It's never a problem with the guns themselves.

And the double standard doesn't stop with the media. Were the roles of Jean and Guyger reversed, the response by criminal-justice officials would be totally different. A person who trespassed into someone else's home and started shooting — even if totally accidental —  would be arrested immediately. A plethora of charges would be aggressively applied to the defendant, ranging from illegally discharging a firearm to criminal trespass to second-degree murder.

In Guyger's case, she isn't even arrested at the scene, and so far she only faces manslaughter charges. The Texas Rangers have handled her with kid gloves, allowing her to turn herself in at her convenience. All her statements to the police have been treated as indisputable facts — and not as the claims of a person who breaks into people's homes and starts shooting. Attorneys who have read the arrest warrant are saying that, given the way it is written, law enforcement clearly thinks it's all just an accident and "the Texas Rangers were careful not to implicate Officer Guyger."  It's the usual "professional courtesy" of the Thin Blue Line. There is one set of laws for government agents. And another set of laws for the taxpayers who pay all the bills.

Guyger's chain of mistakes in this case belies the pro-gun-control argument that police ought to have a monopoly or near-monopoly on firearms because private citizens can't be trusted with weapons. These ordinary people are too likely to be mentally unstable, too trigger-happy, or too lacking in training to be allowed to own firearms.

But who is to defend us from the mentally unstable or poorly-trained police officers? Or perhaps from the ones who are too distracted or unintelligent to figure out which apartment is theirs?

It is precisely this sort of thing that led to the infamous Indiana law which explicitly states that it is not a crime to defend ones self from an abusive police officer — even using deadly force if necessary. That law was a response to an Indiana Supreme Court decision which stated that “there is no right to reasonably resist unlawful entry by police officers.”

Amber Guyger will benefit form this sort of judicial thinking if her case ever goes to trial. The deck in stacked in favor of the government and its law enforcement arm. It's not a coincidence that government judges too often side with government police. They all work for the same organization — and they all live off the sweat of the taxpayers who have very little say in the matter. Moreover, courts have ruled that police have no obligation to protect the citizenry. Thus, "officer safety" is priority number one.

[RELATED: "Lack of Police Accountability Shows the "Social Contract" Isn't Working" by Ryan McMaken]

At this point, the details of Guyger's motivations and actions remain vague. But let's assume it was just an innocent mistake. There's not much comfort there since we've already seen the double-standard — even in cases of accidents — employed for police shootings and shootings by private citizens. The definition of "innocent mistake" varies widely between police officers and everyone else.

But could anything have been done to change the outcome in Jean's apartment? Even once we know the details, it will be impossible to say — and there's no way to assume that Jean would have successfully defended himself with a firearm in this case. But what if Guyger had missed at first? Botham Jean would have been perfectly rational to retreat, grab a gun, and then return fire. Then Jean might at least had a chance.  After all, what reason had he to believe she was a police officer beyond her uniform? It's not as if imposters can't buy those. And even if Jean had believed she was a police officer, he still would have been within his rights — morally speaking — to shoot her dead.

Few who know the realities of real-life violence would see this is a "good" alternative — but it's hard to see how this is any worse than a reality in which police can shoot innocent bystanders without any fear of self-defense on the part of the citizenry. For gun-control advocates, however, this is all too messy. For them, it would all be much more neat and tidy to make sure that private citizens like Jean have no access to the tools of self-defense. "Why you just want the Wild West!" is the typical refrain. The implication is that in a "civilized" society, these sorts of "shoot-outs" should never happen. Apparently, being shot dead while defenseless by a government-employed home intruder is the preferred "civilized" alternative — and only when we all learn to embrace this sort of untrammeled police power will we all be "safe."

  • 1. Guyger's defenders are already trying to claim she is innocent of any misdeed because Jean's door was unlocked. However, whether or not the door was locked is irrelevant to the question of whether or not Guyger was trespassing.
When commenting, please post a concise, civil, and informative comment. Full comment policy here
Shield icon power-market-v2