Their faith is in the legislator, not in mankind; ours is in mankind, not in the legislator.

Stephen Smith, of the Beginner's Guide To Freedom blog, left the following Frederic Bastiat quote underneath my previous post. 
Here's the whole thing:

"But, by a deduction as false as it is unjust, do you know what economists are accused of? It is, that when we disapprove of Government support, we are supposed to disapprove of the thing itself whose support is discussed; and to be the enemies of every kind of activity, because we desire to see those activities, on the one hand free, and on the other seeking their own reward in themselves.

It really is possible to love things like art, medicine, compassion, education, and jobs and still be opposed to government support of art, medicine, compassion, education, and jobs. 

Thus, if we think that the State should not interfere by taxation in religious affairs, we are atheists. If we think the State ought not to interfere by taxation in education, we are hostile to knowledge. If we say that the State ought not by taxation to give a fictitious value to land, or to any particular branch of industry, we are enemies to property and labour. If we think that the State ought not to support artists, we are barbarians who look upon the arts as useless.

And if we think that government shouldn't be trying to create jobs, we are nihilists.  Or nihlists, depending on which spelling Google likes the most. 


Against such conclusions as these I protest with all my strength. Far from entertaining the absurd idea of doing away with religion, education, property, labour, and the arts, when we say that the State ought to protect the free development of all these kinds of human activity, without helping some of them at the expense of others, - we think, on the contrary, that all these living powers of society would develop themselves more harmoniously under the influence of liberty; and that, under such an influence no one of them would, as is now the case, be a source of trouble, of abuses, of tyranny, and disorder.

Yeah, if you blow $538,000,000.00 of Other Peoples' Money on a company that is supposed to turn sunbeams and fairy farts into electricity, that's $538,000,000.00 that those people can't use for other, more productive purposes.  The same goes for all other subsidies, set-asides, prevailing wage regulations, earmarks, stimuli, and the like.  Some authorities are even thinking that this behavior might prolong recessions. 

Our adversaries consider, that an activity which is neither aided by supplies, nor regulated by Government, is an activity destroyed. We think just the contrary. Their faith is in the legislator, not in mankind; ours is in mankind, not in the legislator."

It's been 150 years, but I don't think anyone can improve on those 3 sentences.  No interpretation necessary. 
Here's a picture of Frederic Bastiat the economist along with Fred Bastiat the dachshund.  You're welcome. 

Harry Browne's Libertarian New Year's Resolutions

The other day, I mentioned to Stephen Smith (of A Beginner's Guide To Freedom) that I had been challenged by Harry Browne's Libertarian New Year's Resolutions. Stephen made a point of emailing me this version of the resolutions from The Adventures of Citizen X.

1. I resolve to sell liberty by appealing to the self-interest of each prospect, rather than preaching to people and expecting them to suddenly adopt my ideas of right and wrong.


2. I resolve to keep from being drawn into arguments or debates. My purpose is to inspire people to want liberty — not to prove that they're wrong.


3. I resolve to listen when people tell me of their wants and needs, so I can help them see how a free society will satisfy those needs.


4. I resolve to identify myself, when appropriate, with the social goals someone may seek — a cleaner environment, more help for the poor, a less divisive society — and try to show him that those goals can never be achieved by government, but will be well served in a free society.


5. I resolve to be compassionate and respectful of the beliefs and needs that lead people to seek government help. I don't have to approve of their subsidies or policies — but if I don't acknowledge their needs, I have no hope of helping them find a better way to solve their problems.


6. No matter what the issue, I resolve to keep returning to the central point: how much better off the individual will be in a free society.


7. I resolve to acknowledge my good fortune in having been born an American. Any plan for improvement must begin with a recognition of the good things we have. To speak only of America's defects will make me a tiresome crank.


8. I resolve to focus on the ways America could be so much better with a very small government — not to dwell on all the wrongs that exist today.


9. I resolve to cleanse myself of hate, resentment, and bitterness. Such things steal time and attention from the work that must be done.


10. I resolve to speak, dress, and act in a respectable manner. I may be the first libertarian someone has encountered, and it's important that he get a good first impression. No one will hear the message if the messenger is unattractive.


11. I resolve to remind myself that someone's"stupid" opinion may be an opinion I once held. If I can grow, why can't I help him grow?


12. I resolve not to raise my voice in any discussion. In a shouting match, no one wins, no one changes his mind, and no one will be inspired to join our quest for a free society.


13. I resolve not to adopt the tactics of Republicans and Democrats. They use character assassination, evasions, and intimidation because they have no real benefits to offer Americans. We, on the other hand, are offering to set people free — and so we can win simply by focusing on the better life our proposals will bring.


14. I resolve to be civil to my opponents and treat them with respect. However anyone chooses to treat me, it's important that I be a better person than my enemies.


Well said.
Harry Browne is one of Libertarianisms best evangelists, bringing new converts into the fold. I'm more of the church preacher type, telling the congregation what they want to hear, and confirming their existing prejudices.

But I'm going to start trying harder. When the national debt hits $12 trillion, dollars are being made worthless, and Crony Capitalism gives free markets a bad name, it just makes me nuts. Totally nuts.

I sit down and start releasing bile onto the internet, and I probably need to dial it back.

Stephen, John Jay Myers, and all my other freedom-loving friends who never go into attack mode - I hope you're grading on the curve. Please be patient.


Go here to see a great Photoshop of Obama as Satan.

Stephen Smith on Democrats and Republicans

Stephen Smith, over at "A Beginner's Guide To Freedom", has a new post explaining the vital differences between Democrats and Republicans.

There aren't any.

"As the world recovers, we will face a temptation to replace the risk-and-reward model of the private sector with the blunt instruments of government spending and control. History shows that the greater threat to prosperity is not too little government involvement, but too much."
- George W. Bush, November 2009

At a fundraising event for his presidential library last week, former President George W. Bush warned that too much government intervention in the economy could hinder a recovery. He also expressed concern over what he sees as the Obama administration’s drift toward protectionism.

It’s nice to know that the former President is out there on the chicken dinner circuit defending limited government and free-market economics. It would have been nicer if he had done that from the Oval Office for those eight long years. Instead, while in office President Bush presided over record federal spending, massively increased the regulatory state, bailed out failing companies, levied protectionist tariffs on imported steel, helped fuel the real estate bubble, and signed into law a government prescription drug plan that represented the largest entitlement expansion since the creation of Medicare itself.

Now that former President Bush is safely out of power, however, he’s rediscovered the value of free market principles – the same free market principles he abandoned in order to "save the free market". Nice. Mr. Bush’s speech offers a shining example of a long-standing libertarian criticism of Republicans. Whenever they’re out of power, they talk like libertarians (on economic issues, anyway). But as soon as they’re back in power, they govern like Democrats.

This is not to say that Bush’s comments at the fundraiser were wrong. He’s quite correct that President Obama’s massive government intervention in the economy will have detrimental effects over the long run. But it takes an extraordinary degree of chutzpah for George W. Bush to level those criticisms at Obama given the fact that it was Bush who initiated many of the destructive policies he suddenly finds so troubling. One might argue that the current administration’s policies outstrip those of the Bush administration in their scope and degree, but it’s hard to identify any serious substantive differences between the two when it comes to the economy.

Go here to read the whole thing. It's worth the trip.

Here's the last paragraph, just in case I haven't convinced you....

There is another approach, however. Instead of arguing over numbers (one trillion or two?), we could debate fundamental principles of just law and proper governance. But that would require the key players to have identifiable principles in the first place, which is obviously too much to ask from the likes of Bush or Obama. From what I can tell, only the libertarians are ready for that kind of discussion.

Unless you hit one of the links, you'll never, ever know which iconic 1980 album cover Stephen chose to illustrate his post.

Stephen Smith on The Public Option

Go to Stephen Smith's "A Beginner's Guide To Freedom", for the best thing ever written on The Public Option.

A Beginner's Guide To Protectionism

I've been going back and reading a lot of the older posts on Stephen Smith's "A Beginner's Guide To Freedom" blog.

Here are a few excerpts from a piece on Protectionism. Nothing in this section is new. Nothing in this paragraph would be news to anyone who took Economics 101 (which would rule out most of Congress). But Stephen writes so well I'm tempted to email all of his posts to The Teleprompter Jesus in hopes that maybe the central logic will sink in.

Protectionism is nothing more than an unrelated third party interfering with the voluntary exchange of goods and services between two parties. If I have a quarter, and Joe has a pencil, we may decide to enter into an agreement in which I buy the pencil for a quarter. If we decide to do this, it is only because we both stand to gain from the exchange - otherwise we wouldn’t do it. If I buy the pencil, it’s only because I value the pencil more than I value the quarter. Conversely, if Joe sells me the pencil, it’s only because he values the quarter more than he values the pencil. As a result, we are both better off by having made the transaction.

But for some reason, people accept the idea that government bureaucrats can and should step between Joe and me and take a cut of the proceeds. Some guy from Washington says, “You can’t buy your pencil from Joe for a quarter. I want you to buy your pencil from Fred. If you still buy the pencil from Joe, you have to give me 5%.” It’s really no more complicated than that.

But does it really harm us if we can't get that pencil for a quarter? Well, yes. It does.

Protectionism flies in the face of the division of labor. We all benefit by obtaining goods and services from the most efficient producers, no matter where they happen to be located. That frees up money that we can use to consume other goods and services, and it is this increase that raises our standard of living. Protectionism also ensures that capital remains tied up in less efficient industries instead of being freed up to be used in more efficient areas that would further increase our standard of living.

Stephen ends his post with a Milton Friedman parable that I hadn't heard before.

Milton Friedman used the following example which helps to clarify the true nature of protectionism. In a time of war, the enemy will often attempt to blockade a country to prevent the importation of goods and services. Protectionism is merely an effort to do to yourself in peacetime what your enemy would do to you in a time of war.
Keep that in mind the next time you hear some politician calling for additional restrictions on imports.

I wish I'd written that. Hit the top link to read the entire piece.

Of Regulations, Red Tape, and the Trade Deficit

The great economist Frederic Bastiat, one of the guiding lights of this blog, worked as an exporter. Here's some more info on his career from Mises.org :

Bastiat was orphaned at age ten, and was raised and educated by his paternal grandparents. He left school at age seventeen to work in the family exporting business in the town of Bayonne, where he learned firsthand the evils of protectionism by observing all the closed-down warehouses, the declining population, and the increased poverty and unemployment caused by trade restrictions.

I work in the shipping and logistics industry. I've seen the same "evils", and this is one of the many reasons I've started supporting the Libertarian Party.

My friend and fellow blogger Stephen M. Smith works in the shipping and logistics industry. I mentioned this to him about a month ago, and asked for his thoughts on why people in the shipping industry often have Free Market leanings.
This is what I got back from Stephen.
(Please bookmark his website - A Beginner's Guide To Freedom. In a just, rational world, Stephen's words would be carved into marble.)

Of Regulations, Red Tape, and the Trade Deficit
- by Stephen M. Smith

A number of pundits lately have declared that the recent housing-related chaos in the financial and banking sectors is proof that deregulation doesn’t work, or that markets can’t regulate themselves. Clearly, they argue, what we need is more government regulation and oversight. Evidently the same government that specifies the size of the holes in Swiss cheese and mandates the number of toilets each building must have just isn’t doing enough in the area of regulation.

The people calling for more red tape obviously don’t work in logistics. If they did, they would understand that the United States is already the most heavily regulated society in the history of man. The finance and banking industries are without a doubt the most heavily regulated sectors of the most heavily regulated society, but I suspect the logistics and transportation sectors aren’t too far behind.

Granted, my evidence is anecdotal rather than empirical, but given the fact that my entire job is dedicated to regulatory compliance, I think I speak with some authority. When I’m not busy annoying socialists with free-market blog posts, I spend most of my waking hours making sure my company complies with all of the relevant federal regulations covering exports.

And there are a lot of them. So many, in fact, that the bureaucrats hold a conference in Washington, D.C. each year just to review the changes in the regulations. The conference doesn’t cover all the regulations, mind you, just the changes from the previous year. But even that takes three full days. Last year there were well over a thousand attendees (and they were just the ones who managed to get in - demand for the conference routinely outstrips capacity). That’s at least 24,000 man-hours of lost productivity just so we can understand what’s different this year from last.

One of the many focus areas of the latest conference was a new electronic filing requirement mandated by the US Census Bureau. You probably thought that Census only existed to count the number of people and identify the languages spoken in your household once every decade. But it turns out that they are also responsible for compiling all of the statistics that go into those weighty government reports that are ignored by your elected representatives as they vote to separate you from your money.

But the boys and girls from the Census bureau were all fired up for this latest conference. And why were they so excited to see us this time? Because their new regulations increase the penalties for errors. In the past, the most Census could fine a violator was a paltry $1000 per mistake. Now, though, the penalties can include fines of up to $250,000 and - this is where it gets really exciting – jail time! The folks at the Census Bureau couldn’t be happier. They finally get to throw people in jail, just like the big kids in the other branches of government.

Now I know a lot of non-libertarians just roll their eyes when they hear us yammer on about the “gun of government,” but I can assure you it is not an exaggeration. Seriously – the guy with the gun actually gave a one-hour PowerPoint presentation about all of the terrible things he was willing to do us if we stepped out of line. Ironically, he was the most engaging and entertaining speaker of the entire event.

So what could be so important about this new filing requirement that they’re willing (and eager) to put people behind bars over it? It’s not about national security – that’s covered by a whole host of other government bureaucrats (who also carry guns). As I mentioned earlier, the Census bureau compiles statistics. And one of their most important (in their minds, at least) functions is to calculate the trade deficit. The fact that the US has been running a trade deficit for years is a horrible state of affairs according to the bureaucrats in D.C. To correct this “problem,” they drop a thousand pages of new regulations on our desks each year, threaten us with fines and imprisonment if we screw up on any of them, and then tell us we should export more. And at the end of the conference, they give us pocket calculators made in China. No kidding.

A lot of people get all torqued up about the trade deficit, of course. Take Lou Dobbs (please). Lou has made a fortune complaining about the trade deficit, but at least he’s not pointing a gun at anyone to make it go away (as far as I know). I’m not sure why the trade deficit evokes such a fierce reaction in so many people, since any first-year economics major can tell you it’s a completely meaningless number. To see just how ridiculous the whole thing is, allow me to summarize an illustration originally provided by my favorite economist, Frederic Bastiat. (It seems they were torqued up about the trade deficit in 19th century France as well).

A French merchant ships goods valued at €200,000 to the United States. After freight, insurance, and cost of goods sold, the merchant clears €40,000. He then imports American goods valued at €320,000, which he turns around and sells for €400,000. Foolishly, he believes that he has made a profit of €120,000 from these two transactions - €40,000 from the first shipment to America, and another €80,000 from the sale of the imported American goods. To the layman, this may seem like a pretty good business model and the kind of thing one might wish to continue. But there’s a problem, you see. France now has a trade deficit with the United States – after all, she wisely exported €200,000, but then foolishly imported €320,000. All the politicians start whining that France has “given away” €120,000 to foreigners.

Later, the same merchant ships out another €200,000 worth of French goods. But the ship is lost at sea. For some strange reason, the merchant records this as a loss of €200,000. But how can that be? After all, the trade deficit is now greatly improved. French Customs recorded €200,000 of exports, and there were no corresponding imports. Not only has the previous trade deficit with the United States been erased, but France now finds itself in the eviable position of having a trade surplus of €80,000.

Based on the logic of the balance of payments, it becomes obvious that France can easily double its capital at any moment. All the French have to do is load their goods onto ships, and once they’ve cleared Customs, dump them into the ocean. France will gain all that the sea swallows up.

With Bastiat’s illustration in mind, worrying about the trade deficit doesn’t seem to make a lot of sense. So does it make any sense to threaten people with jail time over it? And even if we were to accept the primitive notion that exports are good and imports are bad, why would we wish to increase the regulatory burden associated with exporting from the United States? If the trade deficit were the demonic force most people believe it to be, then surely we would want to reduce the costs associated with exporting, not increase them.

The regulatory burden is by no means limited to the export sector. All areas of economic life in the United States are burdened by miles of red tape – to a far greater degree than most people realize. Every one of these regulations increases the cost of doing business in the United States. Presumably we should be looking for ways to cut the cost of doing business in this country so that we could afford to do more of it. This should be standard practice even in the best of times, but given the depressed state of the economy these days, it is more important now than ever.

I wish I'd said that.
The only thing I might add? If an American firm purchases something from China, what are the Chinese given in return?
Little green pieces of paper with Benjamin Franklin's picture on them.
What is the only use for these green pieces of paper? Where can they be redeemed for something else?
Thank you, Stephen. The world is a better place with you in it.

More On The Tarrant County Libertarians

I made it to the Tarrant County Libertarians meetup last Saturday afternoon.

The tables were full of laid-back people throwing around names like Milton Friedman, Ludwig von Mises, and Thomas Sowell, in addition to discussing getting their candidates elected in November.

I instantly geeked out. These people were speaking my language. Compared to the usual Democrat and Republican bilge in the newspaper and on TV, this was heaven. It was poetry. Imagine finding a King James Bible after spending twenty years all alone with nothing but a copy of Good News for Modern Man.

They knew all about Angelina Jolie's interest in making a movie of Ayn Rand's "Atlas Shrugged". And they were pumped about it !

These are my people.

Then my dang cell phone started ringing. Every truckload that I'd brokered for pickup that afternoon was either late, missing, or lost. I had drivers in Dallas who couldn't find Texas. Future phone records will show that I made or received 20 phone calls in 40 minutes. Libertarians are a very tolerant bunch, but I was stretching their patience, constantly getting up from the table, leaving the coffee bar, coming back to the table, and trying to catch up on the agenda.

The offending freight companies know who they are, and they WILL atone....

Here's a plug for one of the guys I met there.... Stephen M. Smith is running for Texas State Representative, District 98. He's a very smart, extremely committed person. Look here for his priorities. And I thought I favored limited government....

According to his web page, which I hope you'll check out, Smith also works in shipping and logistics. mostly with shipments going to, from, and within Latin America. His cell phone was silent throughout the entire meeting.

If he's that effective with Latin America, just imagine what he could do with Austin.

Our next meetup will be held at Fort Worth's Rahr Brewery, May 17, 1:00 p.m.

They also put out the word about a new blog for the Libertarian Party of Texas: Lone Star Liberty.

If you don't think these guys are for real, look at what George Will had to say in the latest issue of Newsweek. There just might be a Libertarian surge.