Power & Market

Government Schools Use Covid as an Excuse to Tighten Totalitarian Grip

While the recent clamp-down on power from public universities has mainly been in the realm of speech and expression, like almost every other government institution, they have used covid-19 as an opportunity to control students further. Much to my dismay, this week I learned that my alma mater, Indiana University, has instituted a “COVID-19 Vaccine Requirement,” their website stating:

With the ultimate goal of returning our campuses to normal operations, beginning with the fall 2021 semester, all Indiana University (including IUPUI) students, faculty and staff will be required to have a COVID-19 vaccine and be fully vaccinated before returning to campus.

I was shocked that this was mandatory, as opposed to a mere recommendation, but slightly further down the page, it is abundantly clear—comply or leave:

If you choose not to meet the requirement

IU has outlined strong consequences for those who choose not to meet the COVID-19 vaccine requirement and do not receive an exemption. Everyone is strongly encouraged to get the vaccine as soon as possible not only for your own health and safety but for those around you as well.

For students, they will see their class registration cancelled, CrimsonCard access terminated, access to IU systems (Canvas, email, etc.) terminated, and will not be allowed to participate in any on campus activity.

Faculty and staff who choose not to meet the requirement will no longer be able to be employed by Indiana University. Working remotely and not meeting the COVID-19 vaccine requirement is not an option.

While forced vaccination is completely totalitarian, the argument could be made that new students were made aware of the university’s vaccine requirements and could make a voluntary decision to attend or not, given the information. What really strikes me is the nerve the university has forcing the vaccine on students already attending.

Suppose a student has spent three years of his life working toward his degree. Entering his final year, he doesn’t wish to receive the vaccine. Then what? His choice is to get a vaccine he doesn’t want so that he can finish his degree, or leave. This violates fundamental concepts of contract law. When the student undertook the education at the university three years ago, he was not aware that a new vaccine would be imposed on him in the final year of his education. With this knowledge, he might have chosen to attend a different university, or none at all. Of course, he may have gone to the university anyway, but he would have had this knowledge beforehand, and voluntarily agreed to those terms. Enforcing a new requirement unilaterally upon these students is an audacious power grasp, even for these institutions. One would expect to see a plethora of lawsuits in the future, but we all know how well the court system has prioritized essential liberties during the covid era.

Further down the page, Indiana University makes the same sales pitch that the vaccine is “safe, effective, and free, as is seen in TV ads and elsewhere that we are endlessly bombarded by. It is downright creepy that they are trying to convince students of the veracity of something they don’t have a choice to get. Another Orwellian aspect of the policy is the “COVID-19 vaccine report form.” Through the porthole, students can apparently login through their account and submit documentation proving they’ve received the vaccine and complied with all university requirements.

Indiana University isn’t alone in these requirements; the Chronicle of Higher Education indicates that more than three hundred colleges will require a covid vaccine. More are expected to follow.

So Much for Informed Consent

The Nuremberg Code (1947) states that legal capacity to give consent involves the ability “to exercise free power of choice, without the intervention of any element of force, fraud, deceit, duress, overreaching, or other ulterior form of constraint or coercion.” Students are coerced with the threat of being dismissed from the universities if they do not receive the covid vaccine—a clear violation of the Nuremberg Code.

It is no surprise that government schools are such heavy proponents of the agenda promulgated by the federal government and the pharmaceutical industrial complex, using their authority to indoctrinate a generation to not question authority—even when it comes to some of the most personal decisions an individual makes, such as essential health decisions.

Hopefully, students will resist the tyranny of having personal health decisions dictated to them. If enough refuse, administrations will be forced to change their policies. Enrollment numbers decreasing in these indoctrination stations as a result would be even better yet. One thing is for certain, without a clear repudiation of measures like mandatory covid vaccination, government schools will continue to tighten their totalitarian grip on young minds, creating more easily controlled subjects of the state.

Image source:
Getty
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Government as the Ultimate Cause of the Tragedy of the Commons

06/01/2021Patrick Barron

A good definition of the tragedy of the commons is that "resources that are unowned and/or unownable will be plundered to extinction." Consider the fish in the seas, especially those that migrate, such as whales, or may be found beyond any nation's territorial waters. No one owns them and it may be impossible to own them. Therefore, fishermen are incentivized to take them before other fishermen take them. Overfishing results. Catches shrink. The size of the fish shrinks. Treaties among fishing nations may mitigate the problem, as long as all sign the treaty and poachers are controlled.

It has been estimated that in nineteenth-century America hunters killed 40 million buffalo and trappers took 200 million beaver. The buffalo were hunted almost to extinction, and some scientists claim that the water shortage and erosion problems of the American West are a result of the overtrapping of beaver, nature's premier water conservationist.

Privately Owned Resources Are Capitalized, Ending Their Plunder

A solution to the problem lies in private ownership of the resource. Private owners manage natural resources to maintain their capital value. Scientists and economists have pointed out that the annual and apparently never-ending forest fires of the American West are partly due to the fact that they occur on government-owned land. But government ownership is not the same as private ownership. Government has little incentive to protect the trees in order to harvest them over long periods of time. Governments' main objective seems to be simply fighting forest fires once they have begun, a policy that doesn't seem to have worked very well. Radical environmentalists would not tolerate selling the land and forests to private companies. A pity, because that is exactly what would stop their destruction.

Notice that the main problem that results from the tragedy of the commons is resource depletion. It is true that the first to grab the resource benefits, but this is a one-time grab. Privately owned forests, fisheries, oil wells, copper mines, fertile farmland, etc. will yield their bounty to perpetuity, whereas a plunderer leaves nothing for the future. In other words, plunderers eat the seed corn.

This describes the state of government today. Through its money-printing monopoly, government has the ability to plunder resources without limit, leaving nothing for future growth. Austrian economists call this high time preference, as opposed to low time preference. Those with high time preference prefer the satisfaction of short-term wants at the expense of long-term wants. The ant versus the grasshopper fable is the perfect illustration of the principle. The ant works hard to save for the future, while the grasshopper plays in the summer sun. But the ant has food and shelter through the coming winter, while the grasshopper freezes and starves. Politicians have high time preference, because they occupy their positions of power for a limited time. They have constituents and supporters to placate. They want action and they want it now. They want free fill in the blank.

The Soviet Union was the poster child of this syndrome. Prior to the Russian Revolution of 1917, Russia was a highly industrialized nation that was a worthy competitor in world markets. After the revolution, it embarked on a one-time grab of all the nation's resources as it attempted to impose a completely socialist, state-directed economic model. Within a few years the Russian people were starving. Only Western aid, the sale of its vast natural resources, and the plunder of Eastern European nations after the Second World War allowed the Soviet Union to survive as long as it did. When asked if the US would help restore the Russian economy after the fall of communism, President George H. W. Bush insightfully said that there was not enough capital in the entire world to do that.

The Solution Is Private Money, but the Temptation for Plunder Is Too Great

Under a gold standard, government cannot spend more than it taxes and borrows honestly in the bond market. Gold is a finite medium of exchange, perfectly suited for trading finite goods and services. But government can manufacture fiat money in unlimited amounts. So we have finite resources exchanged by fiat money with no limit. The temptation for government to use this power to accomplish its high–time preference goals is too great for the politician/grasshoppers to ignore. Thus, all economies are being plundered by the ultimate expression of the tragedy of the commons—fiat money in the hands of profligate governments. There seems to be nothing that can prevent the disaster, since every citizen benefits in some way from government spending and no one is willing to give up his handout. In fact, the demand for handouts keeps increasing.

Conclusion: Consumer Spending Consumes Capital

In conclusion, we may say that the real tragedy of the commons is not that the plundered resources are claimed by a minority, but that the resources can never be capitalized to provide benefits into perpetuity. Government may plunder an economy only once. Western economies have a lot of accumulated capital resources, so it may seem that multitrillion-dollar budgets and deficits are sustainable. But they are not. What Keynesians call a postcovid boom, due primarily to pent-up consumer spending fueled by helicopter money, probably is capital decumulation. We are eating our seed corn. Fun, fun, fun … while it lasts.

Image source:
NOAA Fisheries West Coast via Flickr
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George Floyd and Generalized Justice

04/21/2021Jeff Deist

Listen to the Audio Mises Wire version of this article.

Minneapolis police officer Derek Chauvin was tried for the crime of second-degree unintentional murder under Minnesota law. The essential questions of fact for the jury were whether Chauvin actually caused George Floyd's death, and whether he did so while committing a felony offense with force. Quoted below is the relevant Minnesota criminal statute:

609.19 MURDER IN THE SECOND DEGREE. 

Subd. 2.Unintentional murders.

Whoever does either of the following is guilty of unintentional murder in the second degree and may be sentenced to imprisonment for not more than 40 years:

(1) causes the death of a human being, without intent to effect the death of any person, while committing or attempting to commit a felony offense other than criminal sexual conduct in the first or second degree with force or violence or a drive-by shooting; or

(2) causes the death of a human being without intent to effect the death of any person, while intentionally inflicting or attempting to inflict bodily harm upon the victim, when the perpetrator is restrained under an order for protection and the victim is a person designated to receive protection under the order. As used in this clause, "order for protection" includes an order for protection issued under chapter 518B; a harassment restraining order issued under section 609.748; a court order setting conditions of pretrial release or conditions of a criminal sentence or juvenile court disposition; a restraining order issued in a marriage dissolution action; and any order issued by a court of another state or of the United States that is similar to any of these orders.

The media's insatiable drive to portray Floyd's death as proof of a deeply racist society was both decidedly wrong and enormously harmful. Public statements outrageously made before the verdict by the Minneapolis mayor, several members of Congress, and even President Joe Biden fall into the same category. Was the verdict just, given the facts, or was the jury influenced by the threat of a conflagration across American cities had they acquitted? We may never know. But we do know the one thing that might actually have produced some good—a sober examination into Minneapolis police practices—was utterly subsumed by atavistic journalists hell bent on turning a local story into a national one. That story tells us more about their perceptions and biases than it does about racism in America.

In stark contrast, the trial of abortionist Kermit Gosnell in Philadelphia received scant national media coverage. That was a "local matter." It's not hard to understand why. Narratives rule our lives, and they have little to do with justice.

As usual, Americans were watching at least two different movies. One features a beleaguered police officer dealing with a recalcitrant suspect who was resisting arrest. The suspect had titanic levels of the opioid fentanyl in his system, perhaps enough to kill him. And he was no choir boy, having participated in a gang robbery of a pregnant woman at gunpoint. So even if the cop went too far and it's unfortunate the perp died, it wasn't murder—and Floyd probably was a rotten criminal anyway.

The highlight reel playing across town, however, shows a different tale. A bigoted cop jammed his knee into the neck of a handcuffed black man, killing him with impunity in a gross display of everything wrong with racist American justice. White supremacist America still can't come to terms with equality, and thus we still have indiscriminate police killings of unarmed black men.

Both of these narratives rely on generalized or cosmic justice rather than specifics on the ground. Chauvin was not tried for racism, slavery, Jim Crow, or some vague notion of America's racial sins. America was not on trial, white people were not on trial. Spinning the story into a broader general narrative to fuel race obsession was hardly designed to alleviate racial problems. It was designed to inflame them.

Justice is specific, not general. It is individual, not cosmic. In its best form, however imperfect, it is localized, temporal, dispassionate, and rooted in particularized restitution rather than punishment. It is impartial, hence Lady Justice's blindfold. All of this used to be broadly understood as basic and essential to a liberal justice system. Injustice happens to people, in terms of their physical bodies and property—not to groups or society. Even Rawls, no libertarian, differentiated between what he saw as justice for institutions and justice for particular justice relating to particular individual actions.

But justice requires some sense of shared understanding among people, some recognition of agreed-upon values. What are those values in America today? What will replace Christian notions of morality and justice in secular America? The Left's answer is egalitarianism, aggressively managed by the state. The Right's answer is AWOL. The better answer is social cooperation through markets and civil society, coupled with a common law system of evolving harms and remedies. Mises said, "The notion of justice makes sense only when referring to a definite system of norms which in itself is assumed to be uncontested and safe against any criticism." Justice, unlike economics, requires normative prescriptions to produce more cooperation and less harm. Yet our political and media class seems determined to destroy any sense of commonality or even objective reality.

There is no social justice, racial justice, or justice for historical deeds. The hard fact for race-obsessed progressives is this: egalitarianism is incompatible with justice precisely because it requires unequal treatment and a slippery slope of generalized context for specific injuries. Applying group identity in the courtroom will lead to disastrous consequences for America, and one wonders whether those consequences are actually the goal of our sick politicians and journalists.

Image source:
Jo Zimny via Flickr
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GameStop: A Sign of the Times

01/29/2021Robert Aro

Whether you call it the state, system, Swamp, or establishment, now we get to watch as they cry foul because recent trading activity has, as the Wall Street Journal puts it:

upended the natural order between hedge-fund investors and those trying their hand at trading from their sofas.

Or, like Andrew Left of Citron Research, one of the short sellers who found himself on the losing side of the GameStop trade, said:

I didn’t realize it was this cultlike….It’s just a get-rich-quick scheme.

The historic short squeeze of 2021 is more than a simple underdog story. Perhaps the best thing to come out of this is that it exposes the hypocrisy of the “game.” In order to understand, we must look at those who brought us here.

First there's the Federal Reserve, which on Wednesday announced it will continue its $120 billion money creation scheme for the stated purpose of creating jobs and increasing prices on consumer goods. Then, there's the Bank of Japan, which just last month became the biggest owner of the nation’s stocks. Over in Europe, we see billions of dollars of bond buying and negative interest rates thanks to central bank intervention, while Switzerland's central bank continues to literally create Swiss francs in order to buy assets to add to its $128 billion US equity portfolio.

As for government’s culpability, the US debt is nearing $28 trillion. We are in an era where a rise in interest rates ever again has become unfathomable. Meanwhile one of the most popular economic books of last year, The Deficit Myth, argued for more money printing by the Federal Reserve and that we should all stop worrying about how to pay for public spending programs.

When it comes to Wall Street, it’s a mixed bag of socialistic policy. We see government bailouts for the rich while moral hazard runs rampant. Trillions of dollars over the last decade went into share buybacks. Investment firms use high-frequency trading and computer algorithms. There is (probably) a highly manipulated precious metals market, and who knows what other stock market collusion large firms participate in on a daily basis. The mainstream media and the majority of postsecondary academic programs provide nothing other than an apologetic anticapitalist bias for this unholiest of trinities: the Fed, the government, and Wall Street.

And who has been, and will continue to pay for this?

If we define an entity which can never repay a debt as being bankrupt, we must say the US government is bankrupt. It doesn’t have any savings of its own. The Fed provides a service very few people understand. Those who do understand seem to want no part of it. Despite this tax on society, the Fed remains steadfast on its tacitly understood purpose of propping up the financial system through its various money creation programs. Naturally, the people who pay for society are the only ones who actually produce goods and services people value, those same goods and services the government tried so hard to crack down on last year.

What transpired this week is that many who are likely eligible to receive a government stimulus check have, for the time being, found a way to beat a Wall Street hedge fund at its own game. This has upending the long-standing “natural order” which has taken many generations of lies and propaganda to perpetuate, all done using a fraction of the capital and tools available to those on Wall Street.

Fate, it seems, is not without a sense of irony.

After all, what is a hedge fund other than a pool of money being directed by a financial expert with the intent on taking risky bets in order to make a large return on his money? In other words, it’s a fancy way of saying a “get-rich-quick scheme.” Thanks to world wide expansion of the money supply and the favorable conditions money managers have had for entire lifetimes, Wall Street enjoyed almost guaranteed profits…until of course, an anonymous chat room on the internet left a dent in their pocket books.

Let’s not be naïve. When this ends, many retail investors will be left holding the bag. But that doesn’t take away from the profits and losses made by others, and the signal that has been sent. The fallout will be as entertaining as the show. So here we are, stuck in the casino with a possible hyperinflation and more market disorder ahead. The best we can do is either place our bets or trust the plan. What will it be?

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Goldman Sachs Bribes a Foreign Government

10/27/2020Robert Aro

Goldman Sachs was fined $2.9 Billion while pleading guilty to bribery charges involving the Malaysian government, breaking a record for the largest penalty under the Foreign Corrupt Practices Act. Under US law it is illegal to bribe foreign leaders, as reported by CNN. They quoted Goldman’s CEO who is “pleased to be putting the matter behind us.” Widely recognized as one of the most important financial institutions in the world, Goldman will survive, as the firm has approximately $153 Billion in cash and will likely claw back executive bonuses.

It could have been worse, considering the case centers around $4.5 Billion that was stolen from Malaysia’s Sovereign Wealth Fund, in which:

The money was used to buy New York condos, hotels, yachts and a jet, and to fund movies such as "The Wolf of Wall Street." 

The fine is less than the money allegedly stolen! Even more serendipitous for shareholders, Forbes notes:

The settlement amount is lower than the $3.2 billion Goldman set aside for ongoing regulatory and legal matters as of Sept. 30 and was largely accounted for in its 2020 financial results.

As far as continual compliance is concerned:

Goldman is not mandated to hire a compliance monitor… which would be costly and could have been long-term.

Is this an isolated incident? Or does it reflect systemic issues of power, corruption and theft? And what, if anything, does this have to do with the Federal Reserve?

On Thursday the Fed announced a fine:

$154 million for the firm's failure to maintain appropriate oversight, internal controls, and risk management with respect to Goldman's involvement in a far-reaching scheme to defraud a Malaysian state-owned investment and development company…

We know the Fed “conducts the nation’s monetary policy to promote maximum employment, stable prices, and moderate long-term interest rates,” but there are additional functions beyond what the central bank is charged, including regulation and supervision of financial institutions. Per the 10th edition of The Federal Reserve System Purposes & Functions:

Regulation entails establishing the rules within which financial institutions must operate… Once the rules and regulations are established, supervision… seeks to ensure that an institution complies with those rules and regulations, and that it operates in a safe and sound manner.

The Federal Reserve is one of the few, or only, regulators who literally pays the entity which it regulates! Under section 7 of the Federal Reserve Act:

Dividend Amount. After all necessary expenses of a Federal reserve bank have been paid or provided for, the stockholders of the bank shall be entitled to receive an annual dividend on paid-in capital stock…

Typically when an entity is mandated to be regulated by the government, that entity must pay the government (or its agency) an annual fee to cover the costs associated with the regulatory burden on the taxpayers. This is not true for the Fed. Despite having free reign on money creation, it is also funded via paid-in capital stock. The list of stockholders remains an elusive find, but it is well understood to be the very banks in which the Fed regulates. There is no secret nor conspiracy to this, as seen on the 2019 KPMG annual audit report, showing “Dividends on Capital Stock” was $999 million for 2018 and $714 million for 2019. Per the Act, this dividend is cumulative and paid out before the US Treasury receives its surplus payout. Perhaps an act of Congress will one day change the payment structure of the Fed. Until then, it’s the Fed’s world, taxpayers are just footing the bill.

…As for Goldman Sachs, they’ll be okay. Luck for them, it appears no jail time will be served for what could be a billion dollar theft.

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Google Is Making It Harder to Find Mises Institute Content

10/20/2020Tho Bishop

On October 5, Ryan McMaken’s article "Police Officers Threaten to Quit If the Public Keeps Demanding Accountability" managed to hit the top spot on Reddit. It was soon removed from the popular social media platform under very suspicious circumstances.

For those not familiar with Reddit, the platform consists of “subreddits” based on a particular topic or theme. The best performing posts within a subreddit are then highlighted on the front page. In this case, the subreddit was one titled Not the Onion, which features “true stories that are so mind-blowingly ridiculous that you could have sworn they were from The Onion.” The headline to Ryan’s article seemed like a natural fit; users of the subreddit agreed, but the thought police of Reddit disagreed.

Despite Reddit’s actions against the article, the piece managed over a hundred thousand views.

Read more: The Social Media Purge: Is the Mises Institute Next?

Unfortunately, Reddit hasn’t been the only Big Tech actor seemingly interested in downplaying Mises Institute content. In recent weeks, Google has made changes to its search engine that makes Mises Institute articles harder to find. This seems particularly true for articles on Big Tech and social media. The content itself doesn’t seem to be the issue—links to websites that republished our articles still appear on the front page—but the mises.org link has been buried.

While disappointing, none of this is surprising. The ideas of the Mises Institute are particularly dangerous to would-be central planners of all kinds. While social media and Big Tech have been useful tools in the promotion of our ideas, we have long understood the dangers of relying upon these platforms for distribution.

In the words of our founder, Lew Rockwell, “we don't beg for scraps from the imperial table, and we don't seek a seat at that table. We want to knock the table over.”

To those ends, we have actively worked to improve our internal email lists and search engine. We are lucky that a large portion of our frequent user base visits our site directly, which is the surest way to avoid the censorship of third parties. We also have backups of our online video library on censor-resistant platforms, such as Bitchute.

Read more: Notes on Trump's Executive Order for Tech Companies

No matter how the landscape of future politics and power unfolds in America, the ideas of the Mises Institute will not be silenced so long as there are those interested in finding the truth.

If you believe in these ideas, please consider becoming a Mises Institute member for just $5 a month at Mises.org/censor.

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Gun Sales Surge Again. This Time in California.

10/20/2020Ryan McMaken

As we noted back in July, Americans are buying guns in record numbers, with millions of Americans buying guns for the first time in recent months. Now, the New York Post reports that California is very much part of this trend:

About 47,000 Californians bought guns for the first time because of the coronavirus pandemic, according to researchers who also found a staggering amount keep their weapons locked, loaded and readily available.

But the Post article also makes some rather odd assertions, implying people are buying guns because of a "health crisis":

An estimated 110,000 people in the Golden State recently purchased firearms and did so because of the global health crisis, including the 47,000 new owners.

But why would people buy guns because of a public health crisis? It's a safe bet new gun buyers don't think guns will protect them from a disease. If we look a little further, we then see it's the lockdowns that are the problem, not the disease:

The coronavirus pandemic and efforts to lessen its spread have compounded this burden. (emphasis added)

So there it is. By destroying the economy, social services, churches, and commerce, governments have laid the groundwork for more violence. Consequently, many more Americans now feel unsafe:

People who bought guns during the pandemic cited concerns over lawlessness, prisoner releases, the government going too far, government collapses and gun stores closing, the research found.

Not surprisingly, we have seen real-world increases in crime this year over last year. In some cities, the increases in homicide have been substantial, although overall homicide continues to be relatively low in a larger historical context. Moreover, many Americans have figured out that if civil unrest comes to your neighborhood, the police won't be doing much to protect you. The smoking ruins of Minneapolis have made this abundantly clear to many.

So much for that mythical "social contract" the governments keep talking about whenever it demands more power over the people it allegedly "keeps safe."

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Google Mobility Data Suggests Sweden "Socially Distanced" Less Than Other Countries

10/19/2020Ryan McMaken

As is often pointed out by prolockdown publications like the New York Times, Sweden has experienced covid-19 deaths at a rate above that of some of its neighbors that imposed relatively strict lockdowns, such as Denmark.

What is rarely mentioned, however, is that Sweden's deaths per million are also similar to or lower than many countries that did impose harsh lockdowns. For example, as of October 18, the deaths per million in the United Kingdom were 643 in the UK for only 585 in Sweden. Meanwhile, Belgium's death rate was 897 per million, and Italy's rate was 606. Moreover, while cases and deaths are increasing in the UK, Spain, Italy, and Belgium, deaths are apparently flatlining in Sweden. Sweden has reported fewer than ten deaths in the past week.

Clearly, this trend calls into question the official narrative, which is that any country without harsh lockdowns will experience far higher death rates than the countries that lock down.

That narrative having failed in the case of Sweden, prolockdown critics have attempted other explanations. One is that population density is lower in Sweden, so therefore it will have lower deaths per million. This claim leaves much to be desired. New research suggests the data is, at best, inconclusive on that matter. While density is like a factor of some kind, there's no evidence it is a factor to the extent that would be necessary to explain why Sweden has performed better than the UK and Spain, for instance.

Another theory is that the Swedes have voluntarily practiced social distancing so studiously, that this explains away the apparent failure of the "forced lockdown or die" narrative.

As one reporter at Quartz claimed: "Citizens seems to be taking their responsibility seriously. Residents point out that they are practicing social distancing, with the elderly isolated, and families mostly staying home, apart from kids in school."

Or in an article at MedPageToday:  "'Swedes in general have changed their behavior to a great extent during the pandemic and the practice of social distancing as well as physical distancing in public places and at work has been widespread,' said Maria Furberg, MD, PhD, an infectious diseases expert at Umea University Hospital in northeastern Sweden."

But, again, the data doesn't show this.

Using the Google Community Mobility Trends data, we find that the Sweden practiced social distancing far less than countries that had strict lockdowns in place.

For example, the amount of time spent at home surged 30 percent in the UK, Spain, and Italy during the harshest lockdown period. Yet during this same period, the Swedes's amount of time spent at home never exceeded 15 percent.

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Meanwhile, the decline in workplace visitors has tended to be relatively small compared to countries with stricter lockdowns and with higher death rates.

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We find similar trends in recreation and retail:

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And in the use of transit:

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Germany’s Greatest Philosopher of Freedom

06/22/2020Gary Galles

Americans, as a rule, are poorly informed about the vast insights into liberty that some their countrymen have offered them. But moving beyond our borders and language, many know next to nothing. That is why it is valuable to find, in Star Trek lingo, that “undiscovered country” of understanding.

One of the most valuable foreign sources of libertarian thought comes from Wilhelm von Humboldt. Born June 22, 1767, in Prussia, his book, translated from German into English, titledThe Sphere and Duties of Government (or The Limits of State Action in another translation) was a major work in liberty.

Humboldt’s own description of the heart of his book was that “The grand, leading principle, towards which every argument…directly converges, is the absolute and essential importance of human development in its richest diversity.”

J.W. Burrow wrote that “Humboldt explores the role that liberty plays in individual development, discusses criteria for permitting the state to limit individual actions, and suggests ways of confining the state to its proper bounds. In so doing, he uniquely combines the ancient concern for human excellence and the modern concern for what has come to be known as negative liberty.” And The Sphere also inspired John Stuart Mill’s On Liberty (though Barrow noted that “many commentators even believe that Humboldt’s discussion of issues of freedom and individual responsibility possesses greater clarity and directness than Mill’s”). In fact, Mill wrote in his Autobiography that “the only author who had preceded me…of whom I thought it appropriate to say anything, was Humboldt.”

George Smith wrote that The Sphere was “one of the best defenses of limited-government libertarianism ever written.” It led Friedrich Hayek to call him “Germany’s greatest philosopher of freedom.” Ralph Raico wrote that Humboldt came to “passionately defend personal liberty,” which led him to ask, “To what end ought the whole apparatus of the state to aim, and what limits ought to be set to its activity?” What was his answer? “The one good which society cannot provide for itself is security against those who aggress against the person and property of others.” As a result, “the provision of security, against both external enemies and internal dissensions must constitute the purpose of the state, and occupy the circle of its activity.” But “for the [other] services which it is commonly held must fall within the scope of government action…Humboldt believes that they need not be provided by political institutions, but can safely be entrusted to social ones” (a theme strongly echoed by Albert Jay Nock). Humboldt’s approach also infused Leonard Read’s work at the Foundation for Economic Education, with its central focus on enabling individual growth or “blooming.”

Even though The Sphere was first published in its entirety in 1850, and first translated into English in 1854, long after Humboldt’s death, few American writers can claim a closer connection to America’s revolutionary era. Humboldt was born in 1767, just ten days before the British passed the Townsend Acts, a major impetus toward our revolution. He completed the book in 1792, when George Washington won a second term. Much of his adult life overlapped that of James Madison (Humboldt died one year before him), whose efforts dealt with related themes. Further, few works have better caught the spirit of liberty that infused our revolution.

Consider a selection of Humboldt’s insights below as food for thought.

  • “Inquiry into the proper aims and limits of State agency [is]…more vitally momentous than any other political question.”
  • “The due limits of State agency must conduct us to an ampler range of freedom.”
  • “The freedom of private life always increases in exact proportion as public freedom declines.”
  • “The highest ideal…consist[s] in a union in which each strives to develop himself from his own inmost nature, and for his own sake.”
  • “Reason cannot desire for man any other condition than that in which each individual…enjoys the most absolute freedom of developing himself by his own energies, in his perfect individuality…restricted only by the limits of his powers and his rights.”
  • “State measures…accustom men to look for instruction, guidance, and assistance from without, rather than to rely upon their own expedients.”
  • “In proportion as each individual relies upon…the State, he learns to abandon to its responsibility the fate and wellbeing of his fellow-citizens.”
  • “Men are not to unite themselves together in order to forego any portion of their individuality.”
  • “The State, in its positive solicitude for the external and physical well-being of the citizen, cannot avoid creating hindrances to the development of individuality….[S]uch a solicitude should not be conceded to it.”
  • “The whole argument conducts us [to] the necessity of securing the consent of every individual.”
  • “The more a man acts for himself, the more does he develop himself.”
  • “Now, without security, it is impossible for man either to develop his powers, or to enjoy the fruits of his exertion; for, without security, there can be no freedom.”
  • “The State…is not to meddle in anything which does not refer exclusively to security.”
  • “The State may not attempt to act upon the citizen’s peculiar condition with any reference to positive ends.”
  • “The citizens of a State [are] secure, when, living together in the full enjoyment of their due rights of person and property, they are out of the reach of any external disturbance from the encroachments of others.”
  • “The State…is not to withhold a man from the free exercise of his chosen pursuit because he has not submitted himself to its tests of capability.”
  • “The less a man is induced to act otherwise than his wish suggests or his powers permit, the more favorable does his position as a member of a civil community become.”
  • “The manifold and ever-varying plans and wishes of individual men are to be preferred to the uniform and unchangeable will of the State.”
  • “Secure a due regard to the rights of others.”
  • “The nation can accomplish [many important objects] as effectually and without incurring the evils which flow from State interference.”
  • “Fatal consequences…flow for human enjoyment, power, and character, from confounding the free activity of the nation with that which is enforced upon its members.”
  • “The government whose activity we have so narrowly circumscribed does not stand in need of such abundant sources of revenue.”
  • “The grand point to be kept in view by the State is the development of the powers of all its single citizens in their perfect individuality.”

As Ralph Raico summarized The Sphere and Duties of Government, “Humboldt shows himself to be a thoughtful but passionate believer in the efficacy of truly social forces, in the possibility of great social ends being achieved without any necessity for direction on the part of the state.”

That is something our current age, in which the presumed sphere of government extends to virtually everything, would profit from remembering. And for those interested in reading further, more of his insightful words can be found here and here.

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Greece Never Really Recovered from Its Financial Crisis

Now that Greece’s bailout program has ended, what are the prospects for economic growth and development in Greece? These two definitions are different, as economic growth is the increase of income while economic development includes factors as increased schooling, life expectancy etc. However, economic growth is mandatory for economic development. There are many theories in the international literature about economic growth. The fundamental theory is  Robert Solow’s that combines two variables — capital and labor — but there are many other such as the theories of Romer and Lucas which focus on human capital and innovation. I am going to examine investment, savings and labor as variables of economic growth in Greece scrutinizing data of Greece from the latest years before I reach a conclusion.

Greece has made numerous efforts to attract foreign investment. While the benefits of foreign direct investment are controversial, as they depend on the kind of investment, this effort seems not to have had significant results in Greece. The first graph depicts the foreign direct investment per year. The straight line shows the trend of foreign direct investment that is almost a horizontal line, there is no sizable increase.

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The second graph shows the Foreign Direct Investment as a percentage of GDP from the World Bank. Over the last two years, the FDI does not exceed 2% of GDP:

fot2.png

From my point of view, there are three main factors that have led to this failure. First, it is worth mentioning that Greece has the fifth-highest corporate tax rate in Europe (29%). This reduces the profit margin of a potential investor. It is 5.7 percentage points higher than corporate tax rate in Euro area (23.3%) while the rate of the neighboring countries is on average 14.2%.

Another drawback is the public bureaucracy. It is a problem that governments have tried to solve in recent decades, but little has been done. In any case, the facilitation of potential investors is crucial in order to attract investments.

Finally, political instability undermine investment and growth. The World Bank provides data from which an index has been created that depicts political stability. 2.5 points of the index indicates strength political stability and -2.5 points indicates political instability. The picture below proves the political instability of Greece.

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Savings are vital in economic growth according to economic theory as an increase in savings increases the capital stock which is one of the two variables in Solow’s model. A simple way to understand the importance of savings is that someone’s saving could be someone else’s funds for investment. Financial institutions play the role of closing the gap between them. The following graph depicts the savings in Greece per year. Domestic savings have been reduced from 2008 to date dramatically due to consumption needs as Greeks’ income has decreased.

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This reduction has a negative effect on economic growth and it is a necessity the savings start to increase again.

The last variable we'll examine is labor. Labor force participation has decreased over the last ten years. An explanation behind this may be the frustration that unemployed citizens feel from the high unemployment rate that the Hellenic Statistical Authority has approximately calculated at 19.9%. This increased by 12.1 percentage points from 2008. But the quantity of the labor force is not the only important factor. One must also consider the quality.

Unfortunately, the quality of workers may be getting worse: approximately 400.000 Greeks have emigrated the last eight years in order to work abroad, the majority of them not only graduates of universities but also holders of a master’s degree. This brain drain has a huge impact on economic growth as affects productivity and innovation, both significant for economic growth. There are many factors that affect productivity but surely education is one of them. Also, according with the European Commission, the innovation performance of Greece from 2010 to 2017 has decreased by 0.9% and Greece is considered as modest innovator. Needless to say, it is the same period that brain drain was more intense. The next graph depicts the trend of labor force participation rate.

fot5.png

Greece still faces many headwinds. Investments have not increased sufficiently, savings are going down, and the labor force is not only reduced compared to previous years, but highly educated Greeks have emigrated. Taking everything into consideration, it seems that Greece will have to change course to improve capital stock (via investment and savings), and labor, in order to achieve higher levels of productivity and actual production. Both are key in improving economic growth — and thus the Greek standard of living.

Image source:
Getty
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