Freedom Failure?

What does it mean to say "The free market doesn't work"?

It means: freedom doesn't work.

Is that really what people believe? That freedom has failed and what we need instead is an authoritarian elite (or the whims of the majority) telling us not just how to live our lives, but criminalizing actions deemed "not in our best interest"?

Perhaps some definitions would help clarify our thinking and any subsequent debate.

Free Market
The free market is nothing more than the sum total of the voluntary exchanges of goods and service which take place within a division of labor economy. "Voluntary" is to be contrasted with "coercion." The coercion we are concerned with here is that which involves an initiation of force*. Nothing wrong with force used in retaliation or self-defense--though these actions are properly delegated to a government in order to achieve objective laws under the rule of law.

In a free market, individuals are not prevented by the government from participating in voluntary exchanges of mutual agreement. Contracts are legally enforced. Fraud is punishable by law. Demonstrable harms to life, liberty and property are subject to prosecution and legal punishment. The rest is up to us.

"Innocent until proven guilty" is applied not just in the court room, but also in economic transactions--which would require the dismantling of most of the regulatory behemoth we have come to view as "government."

We are all free to advise, educate, advertise, promote, offer, suggest, even propagandize-- but no one is "free: to coerce those whom they are unable to convince. Not even for the sake of a "living wage" or providing medical care or protecting people from their own mistakes.


Freedom
Freedom is not a hedonistic license to do as you please. One man's freedom ends where another man's rights begin.

The Freedom that is an essential foundation of civil society is freedom from the initiation of force--not just in economic transactions, but in all social interactions.

Freedom is a social concept not a metaphysical concept. We can never be free from the need to act in order to gain the values we require to sustain our lives and achieve our happiness. There is no freedom from want --anymore than there is freedom from gravity. The natural state of man is one of poverty and hunger. Through voluntary cooperation and exchange to mutual benefit, man has progressed from a live-by-the-moment animal to the abundant prosperity of western civilization. Truly, a heroic achievement.

"Works"
What does is mean to say the free market "works" or doesn't "work"?

For a market to work, it does not mean there must never be any mistakes, or that every exchange is always the best of all possible exchanges, or that everyone achieves equal material reward for a given amount of effort, or that honesty and hard work will guarantee success, or that every resource is always used to maximum efficiency. The free market is a process of discovery and experiment, trial and error, reward and painful consequence, of learning, accumulating knowledge and experience, and hopefully, steady gradual progress.

The free market, as life, is a process of learning by thinking and doing, replete with both failures and successes. Life "works" through focused attention, learning and action--constantly evaluating, adjusting, compensating, innovating. The free market works in exactly the same way-- because the market isn't a "thing" with properties of its own, but simply the name we give to the sum of our economic exchanges. What works is life--and for human beings, that means (on the most fundamental level) reason applied to the facts of reality. On a social level, it means recognizing, both formally through laws and informally through ethics and mores, that in order to survive, man must be as free to live by the judgment of his own mind in his social interactions as he is in his encounters with reality.

What works is reason, and reason requires freedom from the initiation of force. Applied to the realm of economic exchange and progress, that means a free market.

Freedom works, and because it does, so does the free market.




*[Fraud entails the use of deception to obtain a consent which would be denied if the truth were disclosed and thus is a variation of initiated force.]

objective laws http://www.tafol.org/bulletins/b07.html
rule of law http://duhaime.org/LegalDictionary/R/RuleofLaw.aspx
rights http://aynrandlexicon.com/lexicon/individual_rights.html
freedom http://www.facebook.com/note.php?note_id=25395209900
reason http://aynrandlexicon.com/lexicon/reason.html

India forms new climate change body

Headline from last Thursday's Telegraph in the UK. Here's an excerpt:

The Indian government has established its own body to monitor the effects of global warming because it “cannot rely” on the United Nations’ Intergovernmental Panel on Climate Change, the group headed by its own leading scientist Dr R.K Pachauri...

[India's environment minister Mr Jairam Ramesh] announced the Indian government will establish a separate National Institute of Himalayan Glaciology to monitor the effects of climate change on the world’s ‘third ice cap’, and an ‘Indian IPCC’ to use ‘climate science’ to assess the impact of global warming throughout the country.

“There is a fine line between climate science and climate evangelism. I am for climate science. I think people misused [the] IPCC report, [the] IPCC doesn’t do the original research which is one of the weaknesses… they just take published literature and then they derive assessments, so we had goof-ups on Amazon forest, glaciers, snow peaks.

“I respect the IPCC but India is a very large country and cannot depend only on [the] IPCC and so we have launched the Indian Network on Comprehensive Climate Change Assessment (INCCA),” he said.

India's voracious need for energy to fuel a rapidly growing and developing country makes it the perfect candidate to provide some much needed counterpoint to the entrenched, politicized views of the IPCC.

Life never stops being interesting!

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Climate change policy: A treatment worse than the "disease"

Disease is in quotes, because catastrophic anthropogenic global warming in not a proven fact.



Poverty is the problem.

Wealth (including the cheap, abundant Wealth (including the cheap, abundant energy of fossil fuels) is the solution.

Vote for Change in Healthcare

I have been alerted by Galileo Blogs to Change.org, a website hosting a national competition for ideas to change America (for the better one would hope.)

Jared Rhoads of The Lucidicus Project has submitted a recommendation for improving health care access in the United States:

Allow private citizens to associate freely and provide health insurance based on individual preferences and risk factors.

Please read the full statement then submit your vote in support of this idea. The message of free association and the right to privately contract to mutual advantage without government interference is one that needs to be more prominent in the debate over health care policy.

This message is posted in the sidebar: "This idea is currently in 18th Place in Health Care and needs 95 more votes to make it into the final round."

Let's keep this ideas in the running.

And don't forget to read the comment by Raymond Niles which explains why health care is NOT a right.

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Numbed by Numbers

The federal debt ceiling is now 14.3 trillion dollars, an increase of $1.9 trillion in order to continue a bloated federal budget of government expenditures, the bulk of which goes to support wealth transfer programs.

Just under a year ago, I provided images in attempt to improve our grasp of just how large that deficit is. Current government spending is unprecedented, even compared to WWII--a time of total global war. The numbers are so large it is difficult to wrap one's mind around them in order to understand their true meaning--but it is crucial that we do so. Failure to understand the seriousness of the situation prevents proper outrage and action.

First, let's visualize a bit of historical perspective.



The first graph illustrates the accumulation of debt in nominal dollars. The second illustrates the trend in government spending in constant (2000) dollars, removing the distortions that inflation causes when attempting to compare costs from year to year. Below is a graph which takes a closer look at the national debt since 1940 (also in constant Y2000 dollars) but the last year shown is only 2007.


National debt at the end of 2007: 9.0 trillion

National debt at the end of 2008: 10.0 trillion

National debt at the end of 2009: 11.9 trillion

Current National debt: 12.36 trillion


or "to the penny" as of 9:00 AM PST 02/05/2010: $12,354,041,054,846.90

That's just over $40,000 per U.S. citizen: man, woman and CHILD!


A statutory limit was first placed on the national debt in 1917. A history of the debt ceiling is presented in a 2008 report for Congress, "The Debt Limit: History and Recent Increases." This limit has been raised and lowered (mostly raised) several times since then. Most recently, the debt ceiling was 9.815 trillion in Sept. 2007, and then raised to 12.4 trillion in December of 2009. Because our current debt (12.36 trillion) is rapidly approaching that limit, Congress has just increased it again (just 2 months later!) to 14.3 trillion.

Why call it a limit? It doesn't seem to be limiting anything.

Another way to try and get a handle on the burden that government spending is placing on us is to compare the size of the debt to the size of the economy as measured by Gross Domestic Product. From this point of view, the federal deficit (the annual imbalance between revenue and spending) is not as bad as during WWI or WWII. But, when ALL government debt is accounted for (federal, state, local) we are rapidly approaching the debt burden of the years of WWII and the Great Depression.


When I first looked at these graphs, I thought there must be some error. How could our debt be over 100% of the GDP? But it is.

From the Bureau of Economic Analysis, our current GDP is around 14 trillion.


The federal government debt is 12.36 trillion--



but that figure does not include the debt held by state and local governments. Total government dept is now over 120% of the GDP.

Here's a graph showing the break down:




And for a final bit of perspective, let's visualize just how much is a trillion.

First, here's one million in a stack of $100 dollar bills:


Now one billion:


And here's one trillion. (Remember to look for the man in the lower left corner for perspective.)




And then, just for fun, here's 14 trillion:







Don't forget the little man--because that's you!


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