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Great Moments In Projection: Il Doofe Says His Opponents Are Anti-Democratic, Fascist

06 Tuesday Sep 2022

Posted by Nuetzel in Democracy, fascism, Uncategorized

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Administrative State, Angelo M. Codaville, Babylon Bee, Benito Mussolini, Classical Liberal, Constitutional Republic, Corporatism, crony capitalism, Dan Klein, Democracy, fascism, FDR, Federalism, Friedrich Hayek, G.W.F. Hegel, Hitler, Il Duce, Joe Biden, Joseph Stalin, Majoritarianism, Nationalism, New Deal, Semi-Fascism, Sheldon Richman, Socialism

When partisans want to make sure they get their way, perhaps we shouldn’t be surprised to hear them claim their opponents are “anti-democratic”. Well, one-party rule is not democratic, just in case that’s unclear to leftists prattling about “hunting down” the opposition. We now have those forces hurling cries of “fascism” and “semi-fascism” at political adversaries for opposing their use of the state’s coercive power to get their way and to punish political enemies.

Restrained Democracy

The U.S. is not a democracy; it is a constitutional republic. The reason it’s not a democracy is that the nation’s founders were wary of the dangers of majoritarianism. There are many checks on unbridled majoritarianism built into our system of government, including the many protections and guarantees of individual rights in the Constitution, as well as federalism and three branches of government intended as coequals.

In a short essay on democracy, Dan Klein refers to a mythology that has developed around the presumed democratic ideal, quoting Friedrich Hayek on the “fantasy of consensus” that tends to afflict democratic absolutists. Broad consensus is possible on many issues, but it might have been an imperative within small bands of primitive humans, when survival of the band was of paramount concern. That’s not the case in modern societies, however. Classical liberals are often derided as “anti-democratic”, but like the founders, their distaste for pure democracy stems from a recognition of the potential for tyrannies of the majority. Klein notes that the liberal emphasis on individual rights is naturally at tension with democracy. Obviously, a majority might selfishly prefer actions that would be very much to the detriment of individuals in the minority, so certain safeguards are necessary.

However, the trepidation of classical liberals for democracy also has to do with the propensity for majorities to “governmentalize” affairs so as to codify their preferences. As Klein says, this often means regulation of many details of life and social interactions. These are encroachments to which classical liberals have a strong aversion. One might fairly say “small government” types like me are “anti-pure democracy”, and as the founders believed, democratic processes are desirable if governing power is distributed and restrained by constitutional principles and guarantees of individual rights.

Democracy has vulnerabilities beyond the danger posed by majoritarian dominance, however. Elections mean nothing if they can be manipulated, and they are easily corrupted at local levels by compromises to the administration of the election process. Indeed, today powerful national interests are seeking to influence voting for local election officials across the country, contributing substantial sums to progressive candidates. It’s therefore ironic to hear charges of racism and anti-democracy leveled at those who advocate measures to protect election integrity or institutions such as federalism.

And here we have the White House Press Secretary insisting that those in the “minority” on certain issues (dependent, of course, on how pollsters phrase the question) are “extremists”! To charge that someone or some policy is “anti-democratic” usually means you didn’t get your way or you’re otherwise motivated by political animus.

Fascism

Biden and others are throwing around the term fascism as well, though few of these partisans can define the term with any precision. Most who pretend to know its meaning imagine that fascism evokes some sort of conservative authoritarianism. Promoting that impression has been the purpose of many years of leftist efforts to redefine fascism to suit their political ends. Stalin actually promoted the view that anything to the right of the Communist Party was inherently fascist. But today, fascism is an accurate description of much of Western governance, dominated as it is by the administrative state.

I quote here from my post “The Fascist Roader” from 2016:

“A large government bureaucracy can coexist with heavily regulated, privately-owned businesses, who are rewarded by their administrative overlords for expending resources on compliance and participating in favored activities. The rewards can take the form of rich subsidies, status-enhancing revolving doors between industry and powerful government appointments, and steady profits afforded by monopoly power, as less monied and politically-adept competitors drop out of the competition for customers. We often call this “corporatism”, or “crony capitalism”, but it is classic fascism, as pioneered by Benito Mussolini’s government in Italy in the 1920s. Here is Sheldon Richman on the term’s derivation:

‘As an economic system, fascism is socialism with a capitalist veneer. The word derives from fasces, the Roman symbol of collectivism and power: a tied bundle of rods with a protruding ax.’”

Meanwhile, Hitler’s style of governing shared some of the characteristics of Mussolini’s fascism, but there were important differences: Hitler persecuted Jews, blaming them for all manner of social problems, and he ultimately had them slaughtered across much of Europe. Mussolini was often brutal with his political enemies. At the same time, he sought to unite an Italian people who were otherwise a fairly diverse lot, but once Mussolini was under Hitler’s thumb, Italian Jews were persecuted as well.

Angelo M. Codevilla provides an excellent account of Mussolini’s political career and the turns in his social philosophy over the years. He always considered himself a dedicated socialist, but the views he professed evolved as dictated by political expediency. So did his definition of fascism. As he took power in Italy with the aid of “street fighters”, fascism came to mean nationalism combined with rule by the administrative state and a corresponding preemption of legislative authority. And there were concerted efforts by Mussolini to control the media and censor critics. Sound familiar? Here’s a quote from Il Duce himself on this matter:

“Because the nature of peoples is variable, and it is easy to persuade them of things, but difficult to keep them thus persuaded. Hence one must make sure that, when they no longer believe, one may be able then to force them to believe.”

Here is Codevilla quoting Mussolini from 1919 on his philosophy of fascism:

“The fascist movement, he said, is ‘a group of people who join together for a time to accomplish certain ends.’ ‘It is about helping any proletarian groups who want to harmonize defense of their class with the national interest.’ ‘We are not, a priori, for class struggle or for class-cooperation. Either may be necessary for the nation according to circumstances.’”

This framing underlies another basic definition of fascism: a system whereby government coercion is used to extract private benefits, whether by class or individual. Codevilla states that Mussolini was focused on formal “representation of labor” in policy-making circles. Today, western labor unions seem to have an important, though indirect, influence on policy, and labor is of course the presumed beneficiary of many modern workplace regulations.

Modern corporatism is directly descended from Mussolini’s fascist state. The symbiosis that exists between large corporations and government has several dimensions, including regulatory capture, subsidies and taxes to direct flows of resources, high rates of government consumption, rich government contracts, and of course cronyism. This carries high social costs, as government dominance of economic affairs gives rise to a culture of rent seeking and diminished real productivity. Here is Codevilla’s brief description of the transition:

“Hegel, as well as the positivist and Progressive movements, had argued for the sovereignty of expert administrators. Fascist Italy was the first country in which the elected legislature gave up its essential powers to the executive, thus abandoning the principle, first enshrined in the Declaration of Independence and the U.S. Constitution, by which people are rightly governed only through laws made by elected representatives. By the outbreak of World War II, most Western countries’ legislatures—the U.S. Congress included—had granted the executive something like ‘full powers,’ each by its own path, thus establishing the modern administrative state.”

Mussolini saw Italian fascism as the forerunner to FDR’s New Deal and took great pride in that. On this point, he said:

“… the state is responsible for the people’s economic well-being, it no longer allows economic forces to run according to their own nature.”

The Babylon Bee’s take on Biden and fascism would have been more accurate had it alluded to Mussolini, but not nearly as funny! The following link (and photoshopped image) is obviously satire, but it has a whiff of eerie truth.

Biden Condemns Fascism in Speech While Also Debuting Attractive New Mustache

Conclusion

Biden’s slur that Republicans are “anti-democratic” is an obvious distortion, and it’s rather ironic at that. The nation’s support for democratic institutions has always been qualified for good reasons: strict majoritarianism tends to disenfranchise voters in the minority, and in fact it can pose real dangers to their lives and liberties. Our constitutional republic offers “relief valves”, such as “voting with your feet”, constitutional protections, and seeking recourse in court. Biden’s party, however, has a suspicious advantage via control of election supervision in many key urban areas of the country. This can be exploited in national elections to win more races as long as the rules on election administration are sufficiently lax. This is a true corruption of democracy, unlike the earnest efforts to improve election integrity now condemned by democrats.

Joe Biden hasn’t the faintest understanding of what fascism means. He uses the term mostly to suggest that Trump, and perhaps most Republicans, have authoritarian and racist sympathies. Meanwhile, he works to entrench the machinery and the breadth of our own fascist state, usurping legislative authority. He is buttressed by a treacherous security apparatus, “street fighters” under the guise of Antifa and BLM, and the private media acting as a propaganda arm of the administration. Joe Biden, you’re our fascist now.

The EU Chokes the Free Flow of Information

14 Sunday Apr 2019

Posted by Nuetzel in Censorship, Free Speech

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Brexit, Catarina Midoes, Censorship Machines, Cory Doctorow, crony capitalism, Electronic Frontier Foundation, European Copyright Directive, European Union, Facebook, Fair Use, Google, Link Tax, Mark Zuckerberg, Scott Shackford, Stan Adams, Takedown Notice, Warren Meyer

The European Union wants to force me to pay “news sites” for links with “snippets” of content I might quote on this blog, and it wants the WordPress platform to flag and censor anything that might qualify as copyright infringement. The EU also wants search engines like Google and platforms like Facebook to pay for links and “snippets” or else censor them. Most members in the EU Parliament apparently think the best way to regulate information services is to choke off the flow of information. As Warren Meyer says, if you weren’t for Brexit, this single EU action might well convert you (though British statists have their own designs on censorship, Brexit or not). And if you think government involvement won’t ruin the internet, think again.

These restrictive demands are the essence of two controversial provisions of the so-called European Copyright Directive (ECD) passed by the EU Parliament on March 26th. My summary here leaves out lots of detail, but be assured that administering the Directive will require a massive regulatory apparatus:

The Link Tax: If you link to a source and quote a “snippet” of text from that source, you will have to obtain a license from the source, or else the link you use may be blocked. Keep in mind the rule applies despite full attribution to the original source! It remains to be seen how these licenses will be negotiated, but it will almost certainly impose costs on users.

Censorship Machines: Platforms will be required to monitor and assess everything posted for possible copyright infringement. That will require the development of automated “filters” to flag and remove material that might be in violation. That’s a stark change in the treatment of speech on platforms that, heretofore, have not been required to police their users. The responsibility was on those holding copyrights to go after unauthorized use with takedown notices.

Cory Doctorow of the Electronic Frontier Foundation (EFF) wrote an informative position paper on the ECD a week before the vote. He has been an active and articulate opponent of the legislation. Here are some of his comments (his emphasis):

“… text that contains more than a ‘snippet’ from an article are covered by a new form of copyright, and must be licensed and paid by whoever quotes the text …[the ECD] has a very vague definition of ‘news site’ and leaves the definition of ‘snippet’ up to each EU country’s legislature. … no exceptions to protect small and noncommercial services, including Wikipedia but also your personal blog. The draft doesn’t just give news companies the right to charge for links to their articles—it also gives them the right to ban linking to those articles altogether, (where such a link includes a quote from the article) so sites can threaten critics writing about their articles.”

The ECD seems intended as a gift to large news organizations, but it will discourage the free exposure now given to those news sites on the internet. It’s therefore not clear that the ECD will generate much incremental cash flow for news sites or other content providers. However, collecting the new license revenue will come at some expense, so it won’t be of much help to smaller “rights holders”. Therefore, the rule is likely to benefit large platforms and news outlets disproportionately, as they are in a better position to negotiate licenses for the use of material.

As for censorship machines, perhaps rights holders prefer a shift in the burden of policing the use of copyrighted material away from themselves and to the platforms. Some might suggest that it will achieve efficiencies, but that seems unlikely. These filters are costly and are likely to suffer from an excess of false positives. Moreover, the ECD creates risks that demand conservatism on the part of the platforms, so their censorship machines will systematically side against users. There is also a reasonable possibility that filters will be used to control political speech.

All of this is contrary to the doctrine of fair use, as codified and practiced in the U.S. This involves four conditions giving fairly broad latitude to users, described at the last link by Stan Adams:

“The relevant statutory provision (17 U.S.C. § 107) describes four factors to consider when determining whether a particular use of a work is “fair”: the purpose and character of the use; the nature of the copyrighted work; the amount and substantiality of the portion used in relation to the work as a whole; and the effect of the use on the potential market for, or value of, the original work.”

Copyright protection has never been absolute nor intended to guarantee perfect exclusivity. Ever lend a book to a friend? Ever heard a cover band perform pop hits? Ever offered a quote to forward a written argument? All of this falls broadly under fair use, and much of it serves to promote the economic interests of rights holders, as opposed to infringing on the market for their original work. The EU, however, has no provisions for fair use in its copyright laws (though EU countries may have limitations and exclusions to copyright protection).

It’s bad enough that Europeans will suffer the consequences of this ill-considered piece of legislation, but can the platforms be counted upon to apply their censorship machines only to select geographies? Adams encapsulates the difficulties the ECD presents to users elsewhere:

“… the rest of the world must rely on private companies to ensure that the EU’s misguided copyright policies do not restrict freedoms enjoyed elsewhere in the world.”

Internet regulations in Europe and the U.S. seem to be following different cronyist disease vectors. The ECD favors large news organizations at the expense of social media platforms, and ultimately consumers and the cause of free speech. The large tech platforms are of course equipped to survive, but perhaps not small ones. In the U.S., we have Mark Zuckerberg begging for regulation of Facebook, including the regulation of speech. That’s a spectacularly bad idea for public policy. It too would disadvantage smaller competitors in the social media space. Ultimately, in Europe and the U.S, these steps will come at the expense of consumers, possibly in higher monetary costs, but definitely in restrained trade in online services and in the marketplace of ideas. So goes the cause of free speech when government has the power to regulate the flow of information.

For further reading on the ECF, see Catarina Midoes: “Is this blog post legal (under new EU copyright law)?” She discusses how different factions view the ECD, gives additional perspective on the controversial provisions, and discusses some potential unintended consequences. Also see Scott Shackford’s “Hide Those Meme’s Folks…”

 

Slam the Damn Brakes on the Regulatory Potentate

28 Saturday Oct 2017

Posted by Nuetzel in Regulation

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Administrative State, Barry Brownstein, Corn Ethanol, crony capitalism, DARPA, Deregulation, Donald Trump, Drug Review, EPA, FCC, FDA, Greg Ip, Industrial Policy, Mercatus Center, NASA, Net Neutrality, Paris Climate Accord, Patrick McLaughlin, Puerto Rico, Renewable Fuel Standards, Steve Bannon, The Brookings Institution, Two-For-One Regulatory Order

The stock market’s recent gains have at least three plausible explanations: corporate earnings growth, the prospect of tax reform, and deregulation. Tax reform and deregulation are stated priorities of the Trump Administration and have the potential to lift the economy and generate additional earnings. Investors obviously like that prospect, though regulation itself is a tool used subversively by crony capitalists to stifle competition in their markets. Conceivably, some of the large firms that dominate major stock indices could suffer from deregulation. And I have to wonder whether the economic threat of Trumpian trade protectionism is not taken seriously by the equity markets. Let’s hope they’re right.

It’s no mystery that high taxes and tax complexity can inhibit economic growth. Let’s face it: when it comes to productive effort, we can all think of better things to do than tax planning, crony capitalist or not. The same is true of regulation: the massive diversion of resources into non-productive compliance activities stifles innovation, growth, and even the stability of the status quo. Regulation creates obstacles to activities like new construction and the diffusion of telecommunications services. And it discourages the creation of new products and services like potentially life-saving drugs and slows their introduction to market. The sheer number of federal regulations is so spectacular that one wonders how anything productive ever gets done! Patrick McLaughlin of The Mercatus Center and several coauthors tell of “The Impossibility of Comprehending, or Even Reading, All Federal Regulations“.

Regulation is more than a mere economic burden. It is the product of an administrative apparatus that is not subject to the checks and balances that are at the very heart of our system of constitutional government. That is a threat to basic liberties. Barry Brownstein offers an instructive case study of “The Tyranny of Administrative Power” involving violations of property rights in New Hampshire. The case involves the administrative machinations surrounding an installation of high-power lines.

Governmental efforts to spur innovation ordinarily take the form of spending on research, subsidies for certain technologies or favored industries (e.g., alternative energy), and large government programs dedicated to the achievement of various technological goals (e.g., NASA, DARPA). Together with regulatory rules that influence the allocation of resources, these governmental efforts are called industrial policy. An unfortunate recent example is Trump’s decision to retain the renewable fuel standard (RFS), but on the whole, industrial policy does not seem central to Trump’s effort to stimulate innovation.

It’s clear that a deregulatory effort is well underway: the so-called “deconstruction of the administrative state” hailed by Steve Bannon not long after Trump took office. First came Trump’s 2-for 1 executive order (also see here) requiring the elimination (or modification) of two rules for every new rule. In the Wall Street Journal, Greg Ip writes about changes at the FDA and the FCC that could dramatically alter the pace of innovation in the pharmaceutical and telecom industries. (If the link is gated, you access the article on the WSJ’s Facebook page.) Speedier and less burdensome reviews of new drugs will greatly benefit consumers. An end to net neutrality rules will support greater investment in broadband infrastructure and access to innovative services. There is a new emphasis at the FCC on enabling innovative solutions to communications problems, such as Google’s effort to provide cell phone service in Puerto Rico by flying balloons over the island. The Trump Administration is also reining-in an aggressive EPA, the source of many questionable rules that weaken property rights and inhibit growth. (Again, the RFS is a disappointing exception.) Health care reform could offer much needed relief from overzealous insurance regulation and high compliance costs for physicians and other providers.

But deconstructing the administrative state is hard. Regulations just seem to metastasize, so deregulatory gains are offset by continued rule-making. This is partly from new legislation, but it is also a consequence of the incentives facing self-interested regulators. With that in mind, it’s impressive that regulation has not grown, on balance, thus far into Trump’s first year in office. According to Patrick McLaughlin, zero regulatory growth has been unusual going back at least to the Carter Administration. In quoting McLaughlin, The Weekly Standard says that Trump might well earn the mantle of “King of Deregulation“, but he has a long way to go. Brookings has this interactive tool to keep track of his deregulatory progress. One item on the Brookings list is the President’s intention to withdraw from the Paris Climate Accord. That represents a big save in terms of avoiding future regulatory burdens.

I can’t help but be wary of other avenues through which the Trump Administration might regulate activity and undermine economic growth. Chief among these is Trump’s negative attitude toward foreign trade. Government interference with our freedom to freely engage in transactions with the rest of the world is costly in terms of both foreign and domestic prices. With something of a history as a crony capitalist himself, Trump is not immune to pressure from private economic interests, as illustrated by his recent cow-tow to the ethanol lobby. Nevertheless, I’m mostly encouraged by the administration’s deregulatory efforts, and I hope they continue. The equity market apparently expects that to be the case.

Ridley’s Case For Free Market Capitalism

05 Saturday Aug 2017

Posted by Nuetzel in Free markets

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Capitalism, Corporatism, crony capitalism, Invisible Hand, Liberalism, Markets, Matt Ridley, monopoly, Profit Motive

Matt Ridley delivered an excellent lecture in July addressing a generally unappreciated distinction: markets and free enterprise vs. corporatism. Many don’t seem to know the difference. Ridley offers an insightful discussion of the very radical and liberating nature of free markets. The success of the free market system in alleviating poverty and increasing human well-being is glaringly obvious in historical perspective, but it’s become too easy for people to take market processes for granted. It’s also too easy to misinterpret outcomes in a complex society in which producers must navigate markets as well as a plethora of regulatory obstacles and incentives distorted by government.

I agree with almost everything Ridley has to say in this speech, but I think he does the language of economics no favors. I do not like his title: “The Case For Free Market Anti-Capitalism”. Free Markets are great, of course, and they are fundamental to the successful workings of a capitalistic system. Not a corporatist system, but capitalism! Ridley seems to think the latter is a dirty word. As if to anticipate objections like mine, Ridley says:

“‘Capitalism’ and ‘markets’ mean the same thing to most people. And that is very misleading. Commerce, enterprise and markets are – to me – the very opposite of corporatism and even of ‘capitalism’, if by that word you mean capital-intensive organisations with monopolistic ambitions.“

No, that is not what I mean by capitalism. Commerce, free enterprise, markets, capitalism and true liberalism all imply that you are free to make your own production and consumption decisions without interference by the state. Karl Marx coined the word “capitalism” as a derogation, but the word was co-opted long ago to describe a legitimate and highly successful form of social organization. I prefer to go on using “capitalism” as synonymous with free markets and liberalism, though the left is unlikely to abandon the oafish habit of equating liberalism with state domination.

Capital is man-made wealth, like machines and buildings. It can be used more intensively or less in production and commerce. But capitalism is underpinned by the concept of private property. You might own capital as a means of production, or you might operate an enterprise with very little capital, but the rewards of doing so belong to you. Saving those rewards by reinvesting in your business or investing in other assets allows you to accumulate capital. That’s a good way to build or expand a business that is successful in meeting the needs of its customers, and it’s a good way to provide for oneself later in life.

Capitalism does not imply monopolistic ambitions unless you incorrectly equate market success with monopoly power. Market success might mean that you are an innovator or just better at what you do than many of your competitors. It usually means that your customers are pleased. The effort to innovate or do your job well speaks to an ambition rooted in discovery, service and pride. In contrast, the businessperson with monopolistic ambitions is willing to achieve those ends by subverting normal market forces, including attempts to enlist the government in protecting their position. That’s known as corporatism, rent-seeking, and crony capitalism. It is not real capitalism, and Ridley should not confuse these terms. But he also says this:

“Free-market ideas are often the very opposite of business and corporate interests. “

Most fundamental to business interests is to earn a profit, and the profit motive is an essential feature of markets and the operation of the invisible hand that is so beneficial to society. Why Ridley would claim that business interests are inimical to free market ideals is baffling.

I hope and believe that Ridley is merely guilty of imprecision, and that he intended to convey that certain paths to profit are inconsistent with free market ideals. And in fact, he follows that last sentence with the following, which is quite right: capitalism is subverted by corporatism:

“We need to call out not just the worst examples of crony capitalism, but an awful lot of what passes for capitalism today — a creature of subsidy that lobbies governments for regulatory barriers to entry.“

And, of course, crony capitalism is not capitalism!

Now I’ll get off my soapbox and briefly return to the topic of an otherwise beautiful lecture by Ridley. He makes a number of fascinating points, including the following, which is one of the most unfortunate and paradoxical results in the history of economic and social thought:

“Somewhere along the line, we have let the market, that most egalitarian, liberal, disruptive, distributed and co-operative of phenomena, become known as a reactionary thing. It’s not. It is the most radical and liberating idea ever conceived: that people should be free to exchange goods and services with each other as they please, and thereby work for each other to improve each other’s lives.

In the first half of the 19th century this was well understood. To be a follower of Adam Smith was to be radical left-winger, against imperialism, militarism, slavery, autocracy, the established church, corruption and the patriarchy.

Political liberation and economic liberation went hand in hand. Small government was a progressive proposition. Insofar as there was a revolution during the Industrial Revolution, it was the weakening of the power of the aristocracy and the landed interests, and the liberation of the bulk of the people.“

Do read the whole thing!

Socialism Is Concentrated Power

10 Thursday Mar 2016

Posted by Nuetzel in Big Government, Capitalism, Markets

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Charles Tiebout, Chelsea German, Concentrated Power, crony capitalism, Don Boudreaux, FEE, Foundation for Economic Education, John D. Rockefeller, Marian Tupy, monopoly, Police Power, Privilege, rent seeking, Richard Rahn, State Control, Tiebout Hypothesis, Vote With Their Feet

Power

Nobody likes to defend concentrated power, yet socialists earnestly crave power concentrated in the state. And state power is absolute power. They must imagine that those wielding state power, now and always, will be the sort of nice, benevolent folks they imagine themselves to be. Well, if only more power can be concentrated in the state, it will be alright. Good luck with that! Once granted, watch out.

While this sort of magical thinking might seem naive, another paradox of leftist thinking is even more befuddling: the never-yielding distrust of capitalism and private initiative, a system under which power is largely dispersed. The attitude is more than a little misanthropic. It’s as if socialists expect us to believe that someone forces us to engage in transactions with private sellers, transactions that are always unfavorable in some way. But every transaction in a private economy is voluntary, dependent only on how both parties assess benefits relative to costs. Anyone can make a bad deal, of course, and you might get ripped off by an unscrupulous buyer or seller from time-to-time. But you are free to perform due diligence. You are free to assess risks.

The left goes so far as to blame capitalism for poverty, demonstrating a complete disconnect with reality. For a better perspective on the economic miracles made possible by capitalism, I  recommend a few timely pieces of reading: economist Richard Rahn makes note of the incredible bounty of products and technology brought to us by capitalism. This includes transformative breakthroughs in almost every area of life: communication, computing, transportation, refrigeration, safety, food, medicine and on and on:

“Almost all of the great innovations came from those in the private sector who created them out of the desire for more wealth or just intellectual curiosity. The socialist countries have produced almost nothing — except for bread lines, coercive and destructive taxation and regulation, and gulags. Yet politicians all over the world proudly proclaim themselves to be socialists and attack the capitalist wealth creators and innovators — as if the real world had never existed.“

At the Foundation for Economic Education (FEE), Chelsea German and Marian L. Tupy offer ample evidence of capitalism’s successes as they shred an absurd opinion piece in Forbes magazine claiming that  capitalism “will starve humanity“:

“Throughout most of human history, almost everyone lived in extreme poverty. Only in the last two centuries has wealth dramatically increased. Early adopters of capitalism, such as the United States, have seen their average incomes skyrocket.“

German and Tupy have a more detailed post here with statistics showing dramatic increases in the standard of living enjoyed by poor households in the U.S., increases for which capitalism is largely responsible.

Last month, Don Boudreaux reflected on the well being of average Americans today compared to an individual at the extreme high end of the wealth distribution 100 years ago. Boudreaux catalogues the many ways in which John D. Rockefeller’s comforts were drastically inferior to those available today. He concludes that trading places with Rockefeller would be a questionable deal:

“Honestly, I wouldn’t be remotely tempted to quit the 2016 me so that I could be a one-billion-dollar-richer me in 1916. This fact means that, by 1916 standards, I am today more than a billionaire. It means, at least given my preferences, I am today materially richer than was John D. Rockefeller in 1916. And if, as I think is true, my preferences here are not unusual, then nearly every middle-class American today is richer than was America’s richest man a mere 100 years ago.“

I maintain that even when power is concentrated in large private companies, the situation is far preferable to concentrated power in government. First, private companies do not have the police power necessary for absolute government authority. They cannot force you to do anything. Second, private companies do not simply shuffle resources and up-charge, as the left might have you believe; they innovate and create value as an inducement to trade, a concept that is rare in state-controlled activities. When any form of competition is present, private companies discipline each other, encouraging better quality and restraint on the prices charged for their wares. Even trading with a monopolist confers gains from trade, despite its drawbacks relative to trade in competitive markets.

Of course, government is generally not confronted with competition, unless it’s prompted by citizens who “vote with their feet”, as described by Charles Tiebout. That kind of responsiveness argues for decentralized government, however. Government services are typically monopolized, but the “terms of trade” are often worse than a monopolist would offer. It’s difficult to refuse a government service or your obligation to pay, no matter how much you abhor it, and quality usually suffers due to the extreme lack of accountability to citizen-consumers.

Capitalism gets a bad rap when private businesses engage in rent-seeking. That behavior is characterized by attempts to influence government policy for the business’ own benefit, promoting subsidies, other public spending or tax policies that go to the bottom line, and regulatory actions that disproportionally harm competitors. Those efforts put the crony in crony capitalism. But note that rent seeking is not an inherent feature of capitalism. It is enabled by the existence of activist government, its control over resources and its police power. What this means is that cronyism is fostered by power concentrated within the halls of government. In other words, private power becomes more concentrated and more impervious to competitive forces when it is favored by government. That is pure privilege.

If you dislike concentrated power, then vote for small government!

 

The Gains From Traits: GMOs Bring Welfare Gains

08 Friday Jan 2016

Posted by Nuetzel in Biotechnology

≈ 1 Comment

Tags

Biology Fortified, Biotechnology, Conflict of Interest, crony capitalism, EU GMO Research, Facebook, GE Pharmaceuticals, genetic engineering, Genetic Food Progress, GMO Labelling, GMO Safety, GMO Skepti-Forum, GMOs, Industry-Funded Research, Insulin and GMOs, Julie Kelly, Libertarianism and GMOs, Marc Brazeau, Multi-Generational Studies, Robert Wenzel

GMO-Right Genes
For about 30 years I have injected analog human insulin, produced by GMO E. coli bacteria, directly into my tissue. And I feel great, as do many other Type I diabetics who benefit from the advance this offers over earlier insulins made with pork and beef insulin crystals. Quite simply, I have the wrong genes. Those bad genes enabled my immune system to destroy the insulin-producing cells I needed to stay alive. At first, that necessitated the use of a faulty substitute, but later, an organism was created in a lab with the right gene to produce the powerful analog insulin I use now.

There are many other genetically-engineered pharmaceutical products on the market today, and more are coming. Julie Kelly discusses some of these developments in “The March of Genetic Food Progress” (if gated, Google “wsj Julie Kelly Genetic”). One in particular is an egg laid by a GM chicken that treats:

“… a rare and potentially fatal disorder called lysosomal acid lipase deficiency. The chicken… produces eggs with an enzyme that replaces a faulty human enzyme, addressing the underlying cause of the disease.“

She also writes of GM piglets that resist a viral respiratory disease. Her article mentions a few promising new GMOs foods in the pipeline. In a Sacred Cow Chips post in July 2015, “Nice Splice: New & Old GMO Varieties Blossom“, I quoted William Saletan on a large number of new GMOs, which I repeat here:

“… drought-tolerant corn, virus-resistant plums, non-browning apples, potatoes with fewer natural toxins [and fewer carcinogens when fried], and soybeans that produce less saturated fat. … virus-resistant beans, heat-tolerant sugarcane, salt-tolerant wheat, disease-resistant cassava, high-iron rice, and cotton that requires less nitrogen fertilizer. … high-calcium carrots, antioxidant tomatoes, nonallergenic nuts, bacteria-resistant oranges, water-conserving wheat, corn and cassava loaded with extra nutrients, and a flaxlike plant that produces the healthy oil formerly available only in fish.“

GMO foods enhance farm productivity, reduce waste, conserve land, improve the environment and provide better nutrition. They offer solutions to a variety of human problems that are otherwise out-of-reach.

Anti-GMO activists have smeared all of these GMO crops and even GM insulin as unsafe, but they base their claims on shoddy “research” or willful misinterpretation of research. To scare-monger people with diseases like diabetes is repugnant. Decades of experience have proven the safety of modern insulin products. Those negative claims about insulin arose from a paper reviewed here, which had a different research purpose and did not even mention GMO-produced insulin.

GMOs have been in the food supply to some extent for over 25 years. There is no shortage of high-quality, independent, peer-reviewed research proving the safety of GMOs in various contexts, including multi-generational studies for GMO animal feeds. Here is a review of GMO safety and environmental research funded by the EU. Another review of 10 years of safety research found that:

“The scientific research conducted so far has not detected any significant hazards directly connected with the use of genetically engineered crops.”

An excellent post by Marc Brazeau on the Biology Fortified blog, “About Those Industry Funded GMO Studies“, covers a variety of research demonstrating GMO safety for humans, livestock, honey bees, and invertebrates. As the title suggests, Brazeau also probes the question of financial or professional conflict of interest, industry funding and their alleged impact on GMO research. Favorable GMO research is often condemned by activists on this basis. The “industry shill” argument is often invoked by activists to dismiss positive results regardless of the experimental rigor involved. Brazeau reviews some research on these questions, and notes the following:

“… where compositional studies are concerned … the company has already performed in-house studies. They are contracting independent scientists to confirm their findings. This is going to skew the results of the sample towards industry favorable study outcomes. This doesn’t mean the studies were suspect. They were just more likely to result in a favorable outcome to begin with. If the in-house study had an unfavorable outcome in compositional assessment or other tests, then that project would be stopped and it’s back to the drawing board for a new project. There is no need for follow up testing by outside independent researchers. That’s a big reason why so many studies … will produce favorable results.“

I highly recommend the GMO Skepti-Forum on Facebook as a site on which informed (and usually civil) debate takes place on GMOs. Many of the discussants are scientists actively involved in GMO research. It’s a go-to location for me when investigating on-line memes that reference GMO research.

Finally, Robert Wenzel posts some thoughts regarding “Libertarianism and GMOs“. His position on GMOs mirrors my own. He asserts that individuals have a choice about whether to consume GMOs; they are capable of finding alternatives without imposing restrictions the behavior of others who wish to avail themselves of the benefits or are unconcerned about alleged risks. In fact, the benefits often include affordability and safety. Wenzel argues that this position is consistent with the non-aggression principle, the philosophical anchor of Libertarianism.

Some libertarians object to Wenzel’s defense of biotechnology based on the crony capitalism that undoubtedly benefits the biotech industry, as well as his opposition to GMO labelling. There are certainly ties between the large biotech firms and regulators, but that is no reason to condemn the technology. Labelling proponents start from the faulty premise that there is something inherently harmful about consuming GMOs. Their solution is to impose costs on others, while they are already free to purchase their food from purveyors who offer non-GMO assurances. Hence, the argument that forced labelling represents a form of aggression.

 

Carbon Farce Meets Negative Forcings

22 Saturday Aug 2015

Posted by Nuetzel in Global Warming, Technology

≈ 2 Comments

Tags

Carbon Capture, Carbon Forcing Models, Carbon Nanotubes, Climate Change, crony capitalism, Fossil fuels, Green Cronies, MIT Technology Review, Nanotechnology, Negative Forcing, Peter Yeadon, Shape Shifting, Variable Transparency

NanoMan copy

A new technology is being refined that could reverse years of carbon forcings, given sufficiently wide application, and do so at a profit. That profit should not require the kind of costly subsidies that are now routinely paid to green crony capitalists. Instead, the profit should derive from real market demand for a valuable material. The MIT Technology Review covers the technology under “… How To Suck Carbon From The Air, Make Stuff From It“. It makes possible a form of carbon capture that produces carbon nanotubes, a promising material already in use but having much wider potential. From the second link above:

“Carbon nanotubes are a great example of how useful materials are being developed. This material is said to be one hundred times stronger than steel because of its ‘molecular perfection’ as explained in the paper ‘Year 2050: Cities in the Age of Nanotechnology’ by Peter Yeadon. In addition, because carbon atoms can bond with other matter; such material can be an ‘insulator, semi-conductor or conductor of electricity’”.

Carbon nanotubes have remarkable properties that will revolutionize fabrics and allow buildings to have incredible strength, “transient features” such as variable transparency, and shape shifting. The new technology is said to be more efficient than existing methods of producing carbon nanotubes, and probably much cheaper.

The first link above quotes the developers on the technology’s massive potential for carbon capture:

“They calculate that given an area less than 10 percent of the size of the Sahara Desert, the method could remove enough carbon dioxide to make global atmospheric levels return to preindustrial levels within 10 years, even if we keep emitting the greenhouse gas at a high rate during that period.“

That area is twice the size of California, but a much more modest deployment would certainly reduce the political pressure to decrease carbon emissions. The extent would depend upon the demand for nanotubes, which is expected to grow dramatically in the presence of declining costs. Perhaps we’ll want more carbon emissions if nanotube materials come into widespread use. That would be a welcome development in the developing world, where fossil fuels hold the potential to lift millions out of poverty, as they have for advanced countries in the past. However, such a change would require elites to acknowledge and yield to the supremacy of markets over politics.

A technology capable of such significant carbon capture obviously constitutes a negative carbon “forcer”. Therefore, another implication is that climate models with a heavy emphasis on carbon forcings may be rendered moot. Those models have persistently generated over-predictions of global temperatures, so a deemphasis is already long overdue.

Another hat tip to my buddy John Crawford, who recently has fed me some great information. John should accept my invitation to guest-blog on SCC sometime soon, or start his own blog!

Manipulating Temperatures, People & Policy

21 Friday Aug 2015

Posted by Nuetzel in Global Warming, Tyranny

≈ 2 Comments

Tags

Bob Tisdale, Climate fraud, crony capitalism, global warming, Matt Ridley, NASA, NOAA, Robert Brown, Ronald Bailey, Satellite Temperatures, Surface Temperatures, Temperature adjustments, UK Met Office, Werner Brozek

image

The heavily-manipulated global surface temperatures quoted by NOAA and NASA point to another “hottest month on record” in July, but the satellite temperature measurements do not agree. Nor do several other widely-followed global temperature series maintained elsewhere, such as the UK Meteorological Office (UK Met Office). I wrote about the manipulation of surface temperatures by NOAA and NASA in January in “Record Hot Baloney“, and in “Fitting Data To Models At NOAA” in June:

“If the facts don’t suit your agenda, change them! The 18-year “hiatus” in global warming, which has made a shambles of climate model predictions, is now said to have been based on “incorrect data”, according to researchers at National Oceanic and Atmospheric Administration (NOAA). Translation: they have created new data “adjustments” that tell a story more consistent with their preferred narrative, namely, that man-made carbon emissions are forcing global temperatures upward, more or less steadily.“

The last link provides detail on the nature of the manipulations. Perhaps surprisingly, rather large downward adjustments have been made to historical temperature data, reinforcing any upward trend in the late 20th century and hiding the current 18-year pause in that trend. Suffice it to say that the “adjustments” made by these agencies are at fairly detailed levels; some of the before-and-after comparisons shown by gifs at this link are rather astonishing. Some climate researchers have started to refer to the temperature series as “reconstructions” instead of “data”, out of respect for the legitimacy of actual data.

In the meantime, the “warmist” propaganda keeps flowing from NOAA and NASA, and it is hungrily swallowed and then regurgitated by media alarmists. The media love a good scare story. They are so complicit in reinforcing the warmist narrative they will ignore the revelation of a faulty temperature sensor at National Airport in Washington, D.C. (another hat tip to John Crawford). It has been recording temperatures averaging 1.7 degrees Fahrenheit too warm for the past 19 months. Now that the sensor has been changed, NOAA states that it will not make any adjustments to the past 19 months of recorded temperatures from the National weather station, despite the fact that they have routinely made many other changes, often without any real explanation.

Here is a recent opinion from Duke University Professor Robert Brown on the divergence of satellite and NASA/NOAA surface temperatures and the adjustments to the latter:

“The two data sets should not be diverging, period, unless everything we understand about atmospheric thermal dynamics is wrong. That is, I will add my “opinion” to Werner’s and point out that it is based on simple atmospheric physics taught in any relevant textbook. …

This does not mean that they cannot and are not systematically differing; it just means that the growing difference is strong evidence of bias in the computation of the surface record.“

Every new report issued by NOAA/NASA on record warm temperatures should be severely discounted. They are toiling in the service of a policy agenda; it will cost you dearly, and it will severely punish the less fortunate here and especially in less developed parts of the world; and it will reward the statist elite, bureaucrats and Green crony capitalists. Ronald Bailey in Reason recently weighed in on the consequences of this “apocalyptic anti-progress ideology“. Or read the wise words of Matt Ridley on “The recurrent problem of green scares that don’t live up to the hype“. Hey greens, relax! And don’t waste our resources and our well being on precautions against exaggerated risks.

Trump Tower of Babble

09 Sunday Aug 2015

Posted by Nuetzel in Big Government, Marketplace of Ideas, Obamacare

≈ 2 Comments

Tags

Andrew Popkin, Bankruptcy, Brett Baier, crony capitalism, Donald Trump, eminent domain, GOP Debate, Hillary Clinton, Megyn Kelly, Obamacare, Peter Suderman, Rand Paul, single-payer plan, Vox

Presidential candidate, Donald Trump, has been critical of fellow Replubicans including Sen. John McCain. Some voters are curious about his "daffy" behavior.

Here’s a post-debate follow-up on Donald Trump the Shape Shifter: I’m surprised to hear anyone praising his performance after that debacle. He came off as a dick, and that’s really The Donald. I thought so before I heard that he suggested Megyn Kelly was menstruating that evening. Megan was tough, but please…. Trump is a loud-mouthed, offensive, and often incoherent bully.

Two Trump moments that I thought were amazing were his exchange with Brett Baier about political donations and his dust-up with Rand Paul over a single-payer health care system.

On donations, Trump seemed to take satisfaction in the fact that Hillary Clinton “had no choice” but to attend his wedding after he gave to her Senate campaign. He then made the following statement, which made me laugh:

“I will tell you that our system is broken. I gave to many people. Before this, before two months ago, I was a businessman. I give to everybody. When they call, I give. And you know what? When I need something from them, two years later, three years later, I call them. They are there for me. And that’s a broken system.“

Should I love him or hate him for that statement? He admits with no shame that he participates in crony capitalism, and he realizes that it’s corrupt. Andrew Popkin at Vox has a good analysis:

“Something Trump identifies that doesn’t always get mentioned is the way transactional politics transcend partisanship and ideology. Trump gave to Democrats and he gave to Republicans. He didn’t care what they believed. He cared what they could do for him. He wasn’t supporting them — he was buying them, and that’s completely different.“

It’s convenient for Trump to brag that he doesn’t need donations from others when campaigning. When he’s on the other side of the table, he’s happy to participate in the corruption. Did Trump buy the politicians who helped him arrange eminent domain actions against property owners who were in the way of his developments? He’s also quite proud of his use of bankruptcy laws allowing him to stiff lenders and investors in his enterprises. By the way, in comparing his four corporate bankruptcies to the many “deals” he’s executed over the years, he’d have you believe that the “deal” is always the relevant unit for a bankruptcy proceeding. That’s loose and misleading jargon.

I have said that Trump’s supporters really don’t know what their getting. Perhaps he won’t tell anyone because he’d lose “leverage”. A prime example of Trump’s shiftiness was his response to the following question on single-payer health care systems, including his attempt to embarrass Rand Paul:

Baier: “Now, 15 years ago, you called yourself a liberal on health care. You were for a single-payer system, a Canadian-style system. Why were you for that then and why aren’t you for it now?“

As Peter Suderman noted, Trump’s response to this question about health care began with his views on the war in Iraq. Donald’s rules…. But eventually, he addressed the health care question with a stream of words that thinking people might have been tempted to process logically in order to divine a coherent “Trump” position on the issue, but that would have been a mistake:

“As far as single payer, it works in Canada. It works incredibly well in Scotland. It could have worked in a different age, which is the age you’re talking about here.

What I’d like to see is a private system without the artificial lines around every state. I have a big company with thousands and thousands of employees. And if I’m negotiating in New York or in New Jersey or in California, I have like one bidder. Nobody can bid. You know why? Because the insurance companies are making a fortune because they have control of the politicians, of course, with the exception of the politicians on this stage. But they have total control of the politicians. They’re making a fortune.“

This is not a great moment of clarity for Trump. We still don’t know what he has in mind. He demonstrates that he doesn’t quite understand the inherent flaws in single-payer. If his complaint is with consolidation of the health insurance industry, single-payer would imply an even greater consolidation, indeed, a monopoly. A “private system” does not rule out single-payer. While the insurance companies have undoubtedly influenced politicians, just as Trump has, why is he complaining about a lack of choice, having just asserted that single-payer could work so well? And artificial lines have to do with non-price rationing, a typical feature of government intervention in markets. Thus far, the profits of under-pricing insurers have been protected by so-called “risk corridors” built into Obamacare. Would Trump allow health care providers and insurers to reprice in order to eliminate “artificial lines”? Trump’s words did not settle any questions about his position.

The end of Trump’s response is this:

“And then we have to take care of the people that can’t take care of themselves. And I will do that through a different system.“

So… was Trump still talking about single-payer or not? I forgive Rand Paul for imagining that he was. It was the only solid statement that one could cling to in Trump’s ramble.

Here is Suderman’s summary of Trump’s response with an account of the exchange with Rand Paul that followed:

“What matters is that [Trump] would be different. Different how? So very, very different—and definitely not a moron/loser/dummy/incompetent (pick one) like this other guy.

This is how Trump responds to almost everything: By not answering the question, by babbling out some at-best semi-relevant references, by promising to somehow be different and better without explaining how or why, and then by lobbing an insult.

An insult is how Trump finishes the Obamacare exchange as well. After Trump finishes answering the question, Sen. Rand Paul cuts in, saying, ‘News flash, the Republican Party’s been fighting against a single-payer system for a decade. So I think you’re on the wrong side of this if you’re still arguing for a single-payer system.’ [SCC’s bolding]

Trump’s comeback: ‘I’m not—I’m not are—I don’t think you heard me. You’re having a hard time tonight.’

The gist, as always, is that someone else—indeed, practically everyone else—is a dummy, a loser, a politician. Trump is the only one who really gets it, whatever it is.“

While I thought Rand Paul’s interjectory approach to debating was unwise, his comment to Trump was on-target, and he even qualified it. Trump responded with snark. Trump has yet to take a real position on health care in this campaign, but he has supported single-payer in the past. He doesn’t want to go to the trouble of deciding or revealing a specific plan just yet. Perhaps he’s “maintaining leverage”, keeping his options open, because he’s such a smart businessman. If you want to treat politics like a business deal, fine, but smart voters should be your partners, and they will expect you to reveal your terms.

More Obamacare Follies

31 Thursday Jul 2014

Posted by Nuetzel in Uncategorized

≈ Leave a comment

Tags

ACA, adverse selection, crony capitalism, Don Boudreaux, Medicare, Megan McArdle, Obamacare, rent seeking

follies
Disconcerting news regarding the administration of the ACA just keeps on coming. The so-called “risk corridors” represent a bailout for health insurers for whom Obamacare premium revenue proves inadequate. Sure enough, but more interesting is how the Obama administration attempted to manipulate several provisions of the law on reimbursement in order to keep insurers happy after other changes with negative implications for their risk pools. In addition, when insurers expressed alarm about the “budget neutrality” of the corridors, the administration backtracked on that position. “… the administration had a choice: provide a bailout, or face the unpleasant prospect of having insurers price their products honestly.” The unfolding of these events is detailed in Emails Show Cozy Government- Insurer Alliance….

Don’t get too excited about the improvement in Medicare’s finances under the ACA. The chief actuary for the Centers for Medicaid and Medicare Services says that the ACA’s Medicare changes aren’t sustainable. Reimbursement rates under the ACA are inadequate barring “an unprecedented change in health care delivery systems and payment mechanisms.” In other words, an unlikely advance in productivity will be necessary in order to make Medicare’s finances work.

A few days ago, I posted about the Halbig vs. Sebelius District Court decision here, highlighting Jonathan Gruber’s one-time defense of the ACA’s rules that premium subsidies could be paid only on policies purchased on state exchanges. More recently, he claimed that the rule was not the intent of the legislation. Here are some further thoughts from Don Boudreaux on Gruber’s memory lapse, in which he links to a piece by Megan McArdle. Boudreaux:

The very claim that such a simple “mistake” infects the ACA calls into question the competence (or the incentives, or both) of elites, both political and intellectual, who seek ever more power for government.

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