Limited Government, Government Workers

I thought I would share my comments on a current debate that I am having with friends over whether limited government supporters are hypocrites for taking government handouts. Here is what I had to say:

“The issue at hand on whether or not taking government benefits is hypocritical, while criticizing government to me can be explained through public choice economics.  Gordon Tullock from George Mason (University), who should have won the Nobel Prize in Economics with James Buchanan, wrote a very interesting article that relates to this subject. It is entitled “The Paradox of Revolution.” He uses an interesting example…

“Ruritania is governed by a vicious, corrupt, oppressive, and inefficient government. A group of pure-hearted revolutionaries are currently attempting to overthrow the government, and we know with absolute certainty that if they are successful they will establish a good, clean, beneficial, and efficient government. What should an individual Ruritanian do about this matter? He has three alternatives: He can join the revolutionaries, he can join the forces of the repression, or he can remain inactive.”

He then comes to the conclusion that the benefit of revolution is public good, while an individual joining would have a near-zero chance of changing the outcome. But also, if the revolutionary forces win, he will benefit from the public good even if he does nothing. And doing nothing decreases his chance of jail, injury, or death if he joins and the government wins or puts up a good fight.

Therefore, economically, his incentive is not to join the revolution as the low probability of success combined with the large punishment for failure is much higher then the public good that he himself cannot influence but in the .00001 percentage.

A comparable example would be what if in a presidential popular vote election your chance of dying was 1 out of 10 and your chance of changing the election is 1 in a million. The individual would not vote even though he knows if his candidate wins the country will be better off.

So how does this relate?

Any individual who benefits from the government whether its a politician, a farmer who gets subsidies, or an government bureaucrat has no individual incentive to quit his job even if his believes are that his job shouldn’t exist say for example. The government bureaucrat knows that even though the public good would be better off without the existence of his job, does not mean that him quitting would change anything at all. More than likely the government would hire someone else and would spend more money doing so.

One government bureaucrat quitting their job, or in the case above one Congresswoman refusing her government health care is not going to change the outcome of government health care. All it does is impose costs on the individual and benefits to no one.

So folks, this is exactly why big government exists.

We assumed in the example above that we knew with 100% certainty that the new government would be the best government the world had ever seen. And that is a big assumption. Most revolutions that occur in the world are merely trading one dictator for another. One could argue that, in fact, the American revolution is one of the only examples in history (maybe the Roman revolution from kings to republic) is the only non-example of this.

Limited government is filled with public goods, while big government is filled with individual handouts and this is why every limited government in the history of the world has turned into big government.”

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Published in: on March 17, 2011 at 8:58 pm  Comments (1)  
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Successful Businessmen Cannot Hide, Politicians Can…

An interesting find is brought up over at a blog called Bacon’s Rebellion:

“Eric “Young Gun” Cantor, the Republican House Majority Leader from Henrico County, seemed older and out-gunned Wednesday when new Republican members in the GOP-controlled House voted 233-198 to kill an alternative engine for the new F-35 strike fighter that even the Pentagon didn’t want.

More than half of the new Congressmen voted against the engine that the House’s older leadership, represented by Cantor and House Speaker John Boehner of Ohio, worked desperately to keep in the federal budget.

Their reason? Pure pork. The alternative engines would be built jointly by Rolls Royce, which has its North American headquarters in Virginia, and in Ohio where partner General Electric has big manufacturing plants. The House decided to drop the alternative and go with the main supplier, Pratt & Whitney, thus saving $450 million.”

So obviously Republicans like Bacon’s Rebellion look at this as an instance when the old harden Republican politicians vote for pork and the new saviors vote against it. Whether these new Congressmen continue their votes against pork is still to be seen. What the important lesson here to take away is how a politician like Eric Cantor can vote for pork and write a book about deficit reduction at the same time.

The best fake limited government politician will convince the general populous that they are for limited government, while voting for bills that will give money out to special interests that will continue to help fund their campaigns. This may be a hard concept for the reader of this blog to grasp because the very fact that you are reading this does not make you apart of the general populous.

So how does this differ on the free market with businessmen? First, think about the places you visit on a weekly basis and do you know what policies the business owner gives speeches on in his free time? No. Would you want to know? Maybe. But the truth is it doesn’t matter.

When you go and visit a place of business, you go to purchase something. You are only satisfied if the business owner meets your demands. For example, if you go to the grocery store looking for the best cut of steak then you will only be satisfied if you find what you are looking for. In Economic terms, if the producer supplies the demands of the consumer.

So how can a politician as a producer of policies satisfy the demands of the consumer? If a business man says “come to my grocery store and you will find the best filet cut in town” and upon arrival you realize it is chuck roast at best you will stop going there. But for some reason in politics Eric Cantor can say “I am a deficit reducer” and vote for an increase at the same time with little to no repercussion.

So I ask the reader this question. Free market or government coercion? Which of the two satisfy the demands of the consumer the best? If it is the free market then how can we apply that to government?

Published in: on February 18, 2011 at 9:20 pm  Comments (2)  
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Law vs. moral values by Walter Williams

Today’s article of the day is from the Washington Times:

A civilized society’s first line of defense is not the law, police and courts but customs, traditions and moral values.

Behavioral norms, mostly transmitted by example, word-of-mouth and religious teachings, represent a body of wisdom distilled over the ages through experience and trial and error. They include important thou-shalt-nots such as shalt not murder, shalt not steal, shalt not lie and cheat, but they also include all those courtesies one might call ladylike and gentlemanly conduct. The failure to fully transmit values and traditions to subsequent generations represents one of the failings of the so-called greatest generation.

Behavior accepted as the norm today would have been seen as despicable in yesteryear. There are television debt-relief advertisements that promise to help debtors to pay back just half of what they owe. Foul language is spoken by children in front of and sometimes to teachers and other adults. When I was a youngster, it was unthinkable to use foul language to an adult; it would have meant a smack across the face. Back then, parents and teachers didn’t have child-raising “experts” to tell them that timeout is a means of discipline. Baby showers are held for unwed mothers. In yesteryear, such an acceptance of illegitimacy would have been unthinkable.

For men to sit while a woman or elderly person stood on a crowded bus or trolley car once was unthinkable. It was common decency for a man to give up his seat. Today, some cities require public conveyances to set aside seats posted “Senior Citizen Seating.” Laws have replaced common decency.

Years ago, a young lady who allowed a guy to have his hand in her rear pocket as they strolled down the street would have been seen as loose. Children addressing adults by first names was unacceptable.

You might be tempted to charge, “Williams, you’re a prude!” I’d ask you whether high rates of illegitimacy make a positive contribution to a civilized society. If not, how would you propose that illegitimacy be controlled? In years past, it was controlled through social sanctions, including disgrace and shunning.

Is foul language to or in the presence of teachers conducive to an atmosphere of discipline and respect necessary for effective education? If not, how would you control it? Years ago, simply sassing a teacher would have meant a trip to the vice principal’s office for an attitude adjustment administered with a paddle.

Years ago, the lowest of lowdown men would not say the kind of things often said to or in front of women today. Gentlemanly behavior protected women from coarse behavior. Today, we expect sexual-harassment laws to restrain behavior.

During the 1940s, my family lived in North Philadelphia’s Richard Allen housing project. Many families didn’t lock doors until late at night, if ever. No one ever thought of installing bars on the windows.

Hot, humid summer nights found many people sleeping outside on balconies or lawn chairs. Starting in the ’60s and ’70s, doing the same in some neighborhoods would have been tantamount to committing suicide.

Keep in mind that the 1940s and ’50s were a time of gross racial discrimination, high black poverty and few opportunities compared with today. The fact that black neighborhoods were far more civilized at that time should give pause to the excuses that blame today’s pathology on poverty and discrimination.

Policemen and laws can never replace customs, traditions and moral values as the means for regulating human behavior. At best, the police and criminal justice system are the last desperate line of defense for a civilized society. Our increased reliance on laws to regulate behavior is a measure of how uncivilized we’ve become.

Walter E. Williams is a professor of economics at George Mason University.

Published in: on May 5, 2009 at 6:36 pm  Leave a Comment  
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How Public Choice Economists are different…

This is somewhat of a following up from my previous post “How are Libertarians different?” Like libertarianism people often throwaway the explanations of Public Choice Economics when it is offered to them. Public Choice Economics is often offered to people as “looking at politicians as rational self-interest people.” The next phase is that people look at you and kind of go “duh.” It is much deeper in that. They also study institutions and the incentives politicians face.

Often times when you talk to Conservatives and Liberal (even some libertarians) the most important thing is getting the right person elected to office. What they end up doing is getting new people elected and fighting the fake Liberals and Conservatives who are already in place. Since they are usually unsuccessful with dethroning the fake Liberals and Conservatives, they often do this over a long time horizon and it becomes a neverending cycle.

What the Public Choice challenge is, is how can you arrange the incentives so that any President good or bad will not completely disrupt the system. Other Public Choice Economists come to the conclusion is that you can in fact never get the incentive structures changed. Further more there are other Public Choice Economists believe that a competitive system which prevents an identity from becoming a monopoly on force.

This may be hard to imagine without an example. If you think about the current political system we are faced with. The politicians that get elected are going to be the people who find the best ways to spread the costs and concentrate the benefits. This means pleasing special interests. They will also be the best at making political deals and saying things without saying anything at all. We all know this because we see it every election cycle. What we want is the straight talking, dudley do the right thing politician. The problem is that the incentive structure favors those who do the opposite.

Electing saints is what most regular people do, while Public Choice is more concerned with having institutions that protect us even if we elect a devil.

~PCCapitalist

Infrastructure Madness by Jack Shafer

Today’s article of the day comes from Slate Magazine:

Whenever the government and the construction industry start squawking to the press about the horrors of our aging, crumbling, decaying, decrepit infrastructure, and warn that we must spend hundreds of billions or even trillions of dollars on waterworks, bridges, and roads, please observe this three-step safety procedure:

1) Place your hand firmly on your wallet,
2) slip your B.S. detector over your ears and fasten tightly,
3) and read all the fine print before you take your hand off your wallet.

Why such extreme vigilance? Because it takes little to convince reporters that our infrastructure has rusted to hell and that tens of billions must be spent now on construction products lest both our economy and our bridges collapse.

The current round of infrastructure madness finds the New York Times reporting earnestly (Jan. 28) and the Los Angeles Times (Sept. 14, 2008) editorializing frightfully about the crisis contained in the fact that one-quarter of the nation’s bridges are “structurally deficient” or “functionally obsolete.” A Boston Globe editorial (Oct. 28, 2008) bemoans the fact that “150,000 US bridges [are] rated as deficient.” And Time magazine’s coverage (Nov. 4, 2008) likewise warns of “more than 150,000 structurally deficient bridges” and declares that “America’s infrastructure is broken.”

The scary-sounding phrases structurally deficient and functionally obsolete combined with those big numbers are enough to make you bite your nails bloody every time you drive over a river or beneath an underpass. Yet if any of the cited pieces paused to define either inspection term, you’d come away from the alarmist stories with a yawn. As a 2006 report by U.S. Department of Transportation’s Federal Highway Administration puts it (very large PDF):

Structural deficiencies are characterized by deteriorated conditions of significant bridge elements and reduced load carrying capacity. Functional obsolescence is a function of the geometrics of the bridge not meeting current design standards. Neither type of deficiency indicates that the bridge is unsafe. [Emphasis added.]

A “structurally deficient” bridge can safely stay in service if weight limitations are posted and observed and the bridge is monitored, inspected, and maintained. A bridge designed in the 1930s could be deemed “functionally obsolete” because it’s narrower than modern standards dictate or because its clearance over a highway isn’t up to modern snuff, not because it’s in danger of tumbling down. (The Department of Transportation’s 2004 inventory found 77,796 U.S. bridges structurally deficient and 80,632 functionally obsolete, for a totally of 158,428 deficient bridges.)

None of this is to suggest that we needn’t worry about repairing or maintaining bridges, only to observe that the state of the nation’s bridges ain’t as dire as the press makes it out. If you’ve read this far, you like the scent of my Web page or your care about infrastructure, so I’ll continue. Let’s say the federal government spends billions in stimulus cash both to bring 1930s bridges up to 2009 standards and to rescue other bridges from their deficiencies. What are the chances that the states that handle some that money will spend it in an accountable fashion? Not good.

In a Nov. 17, 2007, memorandum, Inspector General Calvin L. Scovel III of the Department of Transportation wrote that the Federal Highway Administration “is unable to determine how much of the funding provided to states is actually spent on structurally deficient bridges because its financial management system does not differentiate between spending on structurally deficient bridges and other bridge-related expenditures.”

So credulous is press coverage that reporters almost never ask whether some Rust Belt bridges might be redundant or economically superfluous because industry and population have moved on. And just because a bridge occupied a place on the traffic grid once shouldn’t give it a right to eternal service.

As Tom G. Palmer wrote in the February 1983 Inquiry magazine (disclosure: I worked there), “it is no accident that while the rhetoric is repair, the reality is new construction.” He continues:

Highway-improvement politics differs little from military hardware procurement. Rather than keeping old systems in good repair, money flows into flashy new structures where millions can be lavished on consultants, research, and planning.

Big construction projects deliver political rewards, not well-executed maintenance projects, Palmer holds. “Nobody ever held a ribbon cutting-ceremony for the painting of a bridge,” he observes this week.

For those of us who track infrastructure madness in the press, the current round is mighty familiar. As deplorable as our bridges may be, they’re better than they were a generation ago. Today, the government classifies about 25 percent of U.S. bridges as structurally deficient or functionally obsolete. An April 18, 1982, New York Times article headlined “Alarm Rise Over Decay in U.S. Public Works” cites government statistics that classify 45 percent of U.S. bridges deficient or obsolete.

Infrastructure madness has already spread from the bridges to America’s waterworks, where the New York Times pegged an April 18 story about the fragility of America’s water system to the fact that the town of Chelan, Wash., still has some wood pipes. Not until you reach the story’s end do you learn that Chelan is a resort town (summer population 3,860) and that its remaining wood pipes are not an infrastructure problem. Chelan’s director of public works is replacing the last 500-foot section before it fails because repairing wood pipe requires expertise he doesn’t have.

Jack Shafer is Slate‘s editor at large.

Published in: on April 22, 2009 at 6:31 pm  Leave a Comment  
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The Charlotte Tea Party Speech by John Lewis (April 20, 2009)

The article(speech) of the day comes from Capitalism Magazine:

This is a slightly revised version by Dr. Lewis for printed publication. Permission is given to read this in full, wherever defenders of liberty may gather.

It is high time for a tea party in America! But to do this right, we need to understand what it means. So I want to think back for a moment to what happened over 200 years ago, at the time of the original Boston Tea Party. The Founders of this nation brought forth a radical idea. It was truly radical, practiced nowhere before this time. This idea was the Rights of Man.The Founders saw each of us as endowed with certain inalienable rights, rights that may not be separated from our nature as autonomous beings.

These inalienable rights are: · The Right to Life–the right to live your own life, to choose your own goals, and to preserve your own independent existence. · The Right to Liberty, which is the right to act to achieve your goals, without coercion by other men. · The Right to the Pursuit of Happiness, to act to achieve your own success, your own prosperity, and your own happiness, for your own sake. · And the Right to Property—the right to gain, keep, and enjoy, the material products of your efforts.

Unless I’m mistaken I don’t see anything here about a right to happiness. I see a right to the pursuit of happiness: the right to take the actions needed to attain one’s own happiness. Nor do I see any rights to things at all—no rights to food, clothing, healthcare or diapers. There is only a right to act to achieve those things. This is called freedom. These rights to act—the rights to life, to liberty, and to the pursuit of happiness—are founded on a certain view of man. Each of us is an individual, autonomous, moral being, with the right to choose his own values and capable of directing his own life. Look at the person next to you, and look in the mirror—do you see the individual sovereign human being, existing for his own sake, with the right to live, to love, and to act?

This idea—the Founders’ idea of the individual Rights of Man—led to a radical view of government. Government was not to be inherited by the force of an entrenched aristocracy as in Europe, imposed by the divine right of kings through generations of oppression, or enforced by the force of a club. Government in America was to be designed and instituted by thinking men, for a single purpose: to protect and defend the Rights of Man. This is what the American Declaration of Independence says: “To secure these rights, governments are instituted among men.” Thinking men, armed with the idea of rights, created a government limited to the protection of individual rights. (more…)

Want to Prevent Piracy? Privatize the Ocean by Peter T. Leeson

The article of the day comes from the National Review Online:

Following the freeing of American ship captain Richard Phillips from a band of Somali pirates Sunday, commentators have turned their attention to what can be done to control and prevent future piracy. The solutions suggested so far are what you might expect: Hit the Somali pirates at home with overwhelming force; reestablish “law and order” in Somalia so that pirates can’t flourish; and, closely-related, focus on state building in Somalia so citizens have lucrative employments other than piracy to turn to.

One suggestion that isn’t being considered, but should be, is to privatize the seas — especially those off Somalia’s coast. As the old adage (at least among economists) goes, “What nobody owns, nobody takes care of.” This is as true for oceans as it is for anything else. Piracy is just one manifestation of nobody taking care of what nobody owns when that “what” is the sea.

Governments exercise a kind of de facto ownership over the waters off their coasts; states have jurisdiction over, and thus control, what goes on in within so many miles of their shores. But there’s no government in Somalia to control what goes in Somalia’s would-be territorial waters. And in any event, pirates have taken to plying their trade 200-plus miles off the coast — watery territories nobody owns.

Predictably, the absence of ownership of these waters means no one has had much incentive to prevent activities that destroy their value — activities such as piracy. The result is a kind of oceanic “tragedy of the commons” whereby, since no one has an incentive to devote the resources required to prevent piracy, piracy flourishes. In contrast, if these waters were privately owned, the owner would have a strong incentive to maximize the waters’ value since he would profit by doing so. That would mean suppressing and preventing pirates.

Rather than trying its hand at Somali state building, the international community should try auctioning off Somali’s coastal waters. According to some Somali pirates, greedy foreign corporations are exploiting valuable resources in these waters, which is allegedly why they’ve resorted to piracy (the large ransoms earned from pirating are a happy but unexpected byproduct of pursuing social justice, I suppose). If this is right, Somalia’s coastal waters should be able to fetch a handsome price. The international community can use the proceeds of the auction for humanitarian assistance in Somalia, or put it in a trust for Somalia’s future government, if one ever emerges. The “high seas” should be similarly sold. It’s not so important where the proceeds go. The important thing is that the un-owned becomes owned.

Establishing private property rights where they don’t currently exist is the solution to about 90 percent of world’s economic problems. Piracy is no exception.

Published in: on April 15, 2009 at 6:21 pm  Leave a Comment  
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What we need is a government recession!

Often times when our economy goes into a recession, the media and policymakers get obsessed with spending. Here is their argument: spending causes more money to flow into businesses, which flows into employees, and employees are consumers. All along the way the money multiplies. We seem to discourage savings. Many Conservatives and others come to me and they say their reason for not supporting the government fiscal “stimulus” is because most people will save the money anyways.

What is wrong with saving? If we save our money most of the times that means we put it in the bank. The bank then takes that money and loans it out to a business owner. That business owner may then hire someone new, thus doing the same thing as consumer spending, except without the massive amounts of debt. During a recession savings increase and spending decreases and many people see this as a bad thing, but at the same time they complain about the debt each person has. This simply does not make sense.

What we truly need is a government recession! One where the government saves more and spends less. This way they too can also not run up large amounts of debt. If the government slows spending, that means they require less taxes. If they take less in taxes, then more people will have more of their own money to spend. This is not even mentioning the loss due to the collection and transfer itself.

Debt is nothing but a future tax. Since the future taxpayers cannot vote, we have decided that they are now the target for us to spread the cost to. You think we have a bad recession, wait until you see the one years from now when our children and their children have very high percentage income tax.

The government is acting like a bad teenager who cannot control his money. He goes up spends it on things he shouldn’t and charges up credit cards like there is no tomorrow. What America needs to do is to take that money away from little Barry and show him how the money should be spent (because after all it is YOUR money).  We call that the Free Market!

Self-Governance vs. Government (Available for Mac)

This from Wired.com:

“A colleague once defined “work” as “that which you accomplish while not distracted by the internet,” and he was onto something. Anyone who works on a computer  understands how easily personal communication (e-mail, instant messaging, social networks) can distract from the task at hand.

Eyebeam Lab’s Steve Lambert, creator of Add-Art and co-creator of the New York Times spoof, released an application over the weekend that solves the problem: SelfControl, a simple open source program for Mac OS X that prevents you from resorting to well-worn procrastination techniques by blocking access to websites and e-mail servers.”

Some people may not understand this and say why would one want to restrict your own freedom? The answer lies in what Nobel Prize Winning Economist James Buchanan talked about. This is a social contract. The founding fathers created the Constitution to restrain the government enough to protect it’s rights but not to take them away. Buchanan sees this as a risky but necessary institution to ensure freedom. So what does this have to do with Mac Software? James Buchanan would called this the “alarm clock” on Robinson Crusoe’s island. In other words, Robinson does not have to worry about anyone else but yet he still uses the clock to restrain him. As I agree with James Buchanan in a lot of ways, the problem lies in that we cannot always renew and create social contracts and often we are born in them without any input.

The second part to take away from this software is that it gives a good example of governance versus government. Government does not allow you to exit. In Buchanan’s world, people agreed to it unanimously and thus there is no reason to exit. In the software’s case a person agrees to the restrain unanimously and may exit at any time. Government does not allow you to do this. For example, if they were to not allow you to check your email from the hours of midnight and 4 am. People often do not see the distinction between governance and government and it is as simple as taxes are not voluntary, the software above is.

The rest is here.

~PCCapitalist

The devalued Prime Minister of a devalued Government

This Video of the Day is from Daniel Hanna MEP:

~PCCapitalist