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Pope Francis’s Graph of the Day by Ian Vásquez

As the Argentine Pope, ever critical of capitalism, visits the United States, my colleagues at HumanProgress.org have posted this graph.

pope graph

It shows that in 1896, income per person in the United States and Argentina, two of the richest countries in the world, was about identical. Argentina subsequently eschewed the free market, replacing it with trade protectionism and other corporatist policies intended to help the poor by redistributing wealth. By 2010, Argentine income was a third of that of the United States.

Perhaps Pope Francis doesn’t endorse Argentine economic policies, but having just arrived from Cuba, he missed an opportunity to denounce the lack of freedoms that have kept that island and other Latin American countries poor and repressed. He met with none of the many admirable Cuban dissidents, in or out of prison, who have been peacefully advocating basic rights. Nor did he mention the plight of the Cuban people they represent, even as authorities arrested or detained 250 Cuban activists during his visit.

The Cuban Forum for Rights and Liberties (Foro por los Derechos y Libertades), an independent group of dissidents in Cuba, summed up how it felt about, and experienced, the Pope’s visit. It read, in part:

We human rights activists, regime opponents and independent journalists have experienced days full of threats, harassment, telephone connections being cut off, homes besieged by the authorities, and violent, arbitrary arrests.

The behavior of the regime was expected. However, the position of the church has been surprising.

The exaggerated and repeated shows of approval of the dictatorship, the silence toward its excesses, and the refusal to hear dissident voices have created broad discontent among Cuban believers and non-believers both within and outside of the island.

The group might have added that the disappointment has spread more widely in the Americas.

This post first appeared at Cato.org.

Ian Vásquez

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The Speech Pope Francis Should Have Given by Lawrence W. Reed

Pope Francis, Address to the United States Congress — September 24, 2015:

Members of the U.S. Congress and the American people:

I come before you in glowing admiration for the historic accomplishments of your spirit of enterprise. In the pursuit of personal gain — the desire to improve your lives while serving others in the process — you Americans have fed, clothed and housed more people at higher levels than all the combined efforts of humanitarians worldwide throughout history.

In my profession, we speak of “collecting” money. Americans practically coined the phrase, “making money.” After 36 hours in the United States, I now realize that we can’t collect it until you first make it, and while both activities are motivated at least in part by a shared desire to “do good,” the one that your risk-taking, visionary entrepreneurs, investors, builders, inventors and job creators do so well is by far the bigger challenge.

I’ve said some things lately that gave you reason to think I was hostile to the dynamic spirit of enterprise that made this country a beacon for the world and the most generous society in history. I’ve spoken about excessive greed in the capitalist system, but now I realize that no variant of socialism ever does away with greed. It simply ensures that the only way a person can satisfy it is by using his political connections to steal what he wants, to pillage hapless value-creators while condemning the poor to a life of politicized dependency. I’m a little ashamed now that I fell for such nonsense, but I am happy to be here to begin my education in economics and politics in earnest.

One of the beautiful things about your country is the intellectual diversity. One example is my conversations with American Christians who have spent much time in thought and prayer on the question of Jesus’s views on property and politics. In my conversations, we have discussed how Jesus, the man whose teachings I regard as sacred and divine, never once argued for redistribution of income by political power.

While he disdained the worship of money, he never disparaged the crucial role of money as a medium of exchange or as a wealth-creating motivator. I had apparently forgotten Jesus’s advice (in the Book of Luke) to a man who asked him to redistribute some wealth. “Who made me a judge or divider over you?” he asked. I think as legislators, you should ask that very question of yourselves.

So rather than read a stock speech of clichés and finger-wagging, I’m simply going to implore you to keep learning, as I have dedicated my life to doing. And before any of us are quick to jump to policy prescriptions on things about which we know so little, let’s all remember what the Austrian economist Murray Rothbard advised:

It is no crime to be ignorant of economics, which is, after all, a specialized discipline and one that most people consider to be a “dismal science.” But it is totally irresponsible to have a loud and vociferous opinion on economic subjects while remaining in this state of ignorance.

Thank you.

Unfortunately, this was not the speech the Pope delivered to Congress today.

The good news is that you don’t have to wait for the Pope’s next encyclical to benefit from the insights on property, economics, and Jesus’s teachings on them that the Pope is no doubt gleaning on his American tour.

You can order a copy of Rendering Unto Caesar: Was Jesus a Socialist?yourself. In fact, you can even order multiple copies, get a bulk discount, and start informing others of the important principles the pamphlet champions! What are you waiting for?

Lawrence W. Reed
Lawrence W. Reed

Lawrence W. (“Larry”) Reed became president of FEE in 2008 after serving as chairman of its board of trustees in the 1990s and both writing and speaking for FEE since the late 1970s.

The Pope Is Morally and Factually Wrong about Capitalism by Daniel J. Mitchell

The biggest mistake of well-meaning leftists is that they place too much value on good intentions and don’t seem to care nearly as much about good results.

Pope Francis is an example of this unfortunate tendency. His concern for the poor presumably is genuine, but he puts ideology above evidence when he argues against capitalism and in favor of coercive government.

Here are some passages from a CNN report on the Pope’s bias.

Pope Francis makes his first official visit to the United States this week. There’s a lot of angst about what he might say, especially when he addresses Congress Thursday morning. …

He’ll probably discuss American capitalism’s flaws, a theme he has hit on since the 1990s. Pope Francis wrote a book in 1998 with an entire chapter focused on “the limits of capitalism.” …

Francis argued that … capitalism lacks morals and promotes selfish behavior. …

He has been especially critical of how capitalism has increased inequality… He’s tweeted: “inequality is the root of all evil.” …

He’s a major critic of greed and excessive wealth. …”Capitalism has been the cause of many sufferings…”

Wow, I almost don’t know how to respond. So many bad ideas crammed in so few words.

If you want to know why Pope Francis is wrong about capitalism and human well-being, these videos narrated by Don Boudreaux and Deirdre McCloskey will explain how free markets have generated unimaginable prosperity for ordinary people.

But the Pope isn’t just wrong on facts. He’s also wrong on morality. This video by Walter Williams explains why voluntary exchange in a free-market system is far more ethical than a regime based on government coercion.

Very well stated. And I especially like how Walter explains that markets are a positive-sum game, whereas government-coerced redistribution is a zero-sum game (actually a negative-sum game when you include the negative economic impact of taxes and spending).

Professor Williams wasn’t specifically seeking to counter the muddled economic views of Pope Francis, but others have taken up that challenge.

Writing for the Washington Post, George Will specifically addresses the Pope’s moral preening.

Pope Francis embodies sanctity but comes trailing clouds of sanctimony. With a convert’s indiscriminate zeal, he embraces ideas impeccably fashionable, demonstrably false and deeply reactionary.

They would devastate the poor on whose behalf he purports to speak… Francis deplores “compulsive consumerism,” a sin to which the 1.3 billion persons without even electricity can only aspire.

He specifically explains that people with genuine concern for the poor should celebrate industrialization and utilization of natural resources.

Poverty has probably decreased more in the past two centuries than in the preceding three millennia because of industrialization powered by fossil fuels.

Only economic growth has ever produced broad amelioration of poverty, and since growth began in the late 18th century, it has depended on such fuels. …

The capitalist commerce that Francis disdains is the reason the portion of the planet’s population living in “absolute poverty” ($1.25 a day) declined from 53 percent to 17 percent in three decades after 1981.

So why doesn’t Pope Francis understand economics?

Perhaps because he learned the wrong lesson from his nation’s disastrous experiment with an especially corrupt and cronyist version of statism.

Francis grew up around the rancid political culture of Peronist populism, the sterile redistributionism that has reduced his Argentina from the world’s 14th highest per-capita gross domestic product in 1900 to 63rd today.

Francis’s agenda for the planet — “global regulatory norms” — would globalize Argentina’s downward mobility.

Amen (no pun intended).

George Will is right that Argentina is not a good role model.

And he’s even more right about the dangers of “global norms” that inevitably would pressure all nations to impose equally bad levels of taxation and regulation.

Returning to the economic views of Pope Francis, the BBC asked for my thoughts back in 2013 and everything I said still applies today.

This first ran at Cato.org.

Daniel J. Mitchell

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Pope Karl Marx I: Blaming Capitalism

In FrontPage today I discuss how the Pope has blamed the refugee crisis on…capitalism:

Did Karl Marx become Pope on March 13, 2013?

As the leader of a Church that encompasses the globe, one might expect Pope Francis to be a bit more…spiritual. Instead, he has more than once had recourse to Marxist analysis to explain global events, appearing to see economic deprivation as the cause of all the world’s evils. He did it again in an interview published last Monday, when he opined that the root cause of the refugee crisis engulfing Europe was economic inequality:

It is the tip of an iceberg. These poor people are fleeing war, hunger, but that is the tip of the iceberg. Because underneath that is the cause; and the cause is a bad and unjust socioeconomic system, in everything, in the world – speaking of the environmental problem –, in the socioeconomic society, in politics, the person always has to be in the centre. That is the dominant economic system nowadays, it has removed the person from the centre, placing the god money in its place, the idol of fashion. There are statistics, I don’t remember precisely, (I might have this wrong), but that 17% of the world’s population has 80% of the wealth.

Let’s see. Are the Syrian refugees fleeing war and hunger? Certainly. Are they, however, fleeing an unjust economic system? Are they fleeing Syria because Bashar Assad on the one hand and the Islamic State on the other are top-hatted plutocrats puffing cigars and chuckling as they send the proletariat off to back-breaking labor? Are Assad and the Islamic State fighting one another for an increased market share? Are the Syrian refugees streaming into Europe because Syria is in love with the god money and the idol of fashion? (The Pope actually may be on to something with that idol of fashion bit: certainly women in the Islamic State holdings in Syria will get killed if they don’t bow to the Islamic State’s idol of fashion and cover everything but their hands and face.)

In reality, the refugees are leaving Syria because the Sunnis of the Islamic State and other jihad groups are waging jihad against the Alawite regime of Assad and his Shi’ite Iranian allies, and have torn the country apart in the process. But to acknowledge that would require the Pope to admit that there is such a thing as jihad violence in the first place, and he is not at all disposed to do that; back in November 2013, he proclaimed his “respect for true followers of Islam” and declared that “authentic Islam and the proper reading of the Koran are opposed to every form of violence.”

So the peaceful Koran couldn’t possibly have anything to do with this refugee crisis, could it? It must be those heartless Syrian tycoons, or more precisely the European and American ones who are presumably keeping the Syrians in a perpetual state of poverty and deprivation.

Meanwhile, the refugees are not all fleeing hardship in Syria at all. Last February, the Islamic State promised to flood Europe in the near future with as many as 500,000 refugees. And an Islamic State operative recently boasted that among the flood of refugees, 4,000 Islamic State jihadis had entered Europe. “They are going like refugees,” he said, but they were going with the plan of sowing blood and mayhem on European streets. As he told this to journalists, he smiled and said, “Just wait.” He explained: “It’s our dream that there should be a caliphate not only in Syria but in all the world, and we will have it soon, inshallah.”

And last Monday, Lebanese Education Minister Elias Bou Saab warned that Islamic jihadis make up as much as two percent of the Syrian refugees in his country alone. Since there are 1.1 million Syrians in refugee camps in Lebanon, that amounts to 20,000 jihadis. How many more are already in Europe?

Despite his Marxist analysis, in the same interview the Pope acknowledged the possibility that there could be Islamic jihadists among the refugees: “I recognize that, nowadays, border safety conditions are not what they once were. The truth is that just 400 kilometres from Sicily there is an incredibly cruel terrorist group. So there is a danger of infiltration, this is true.” He even admitted that Rome could be at risk: “Yes, nobody said Rome would be immune to this threat.”

Despite this, however, he reiterated his request that Catholic parishes take in refugees: “What I asked was that in each parish and each religious institute, every monastery, should take in one family. A family, not just one person. A family gives more guarantees of security and containment, so as to avoid infiltrations of another kind.” And he applauded Europe’s welcoming of the refugees: “I want to say that Europe has opened its eyes, and I thank it. I thank the European countries which have become opened their eyes to this.”

Yet in so many important ways his own eyes appear to remain firmly closed. Is societal suicide really a requirement of Christian charity? Must Europe allow itself to be overrun by hostile invaders in order to prove its lack of racism and willingness to extend help to the needy? These are questions that Church leaders ought to be considering, but they’re too busy with their “dialogue” sessions at the local mosque to busy themselves with such trivialities. No doubt that “dialogue” will result in calls for more redress of economic inequalities, in accord with the Pope’s own world view – and more money will be showered upon Muslim countries, enabling the purchase of more weaponry and the onset of more jihad. At least Europe, as the blade plunges into its collective throat, can congratulate itself that even unto death, it always welcomed the stranger.

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Bernie Sanders Is Wrong: Trade Is Awesome for the Poor and for America by Corey Iacono

Sen. Bernie Sanders, the Democratic presidential hopeful, is no fan of free trade. In an interview with Vox, Sanders’ made his anti-trade position clear: “Unfettered free trade has been a disaster for the American people.”

He also noted that he voted against all the free trade agreements that were proposed during his time in Congress and that if elected President he would “radically transform trade policies” in favor of protectionism.

Sanders and his ilk accuse their intellectual opponents of promoting “trickle-down economics,” but that is precisely what he is advocating when it comes to trade. The argument for protectionism ultimately relies on the belief that protecting domestic corporations from foreign competition and keeping consumer prices high will somehow benefit society as whole.

However, the real effect of protectionism is to increase monopoly and consequently reduce overall economic welfare. In fact, according to a paper by economists at the Federal Reserve Bank of Minneapolis, “Government policies…such as tariffs and other forms of protection are an important source of monopoly” that lead to “significant welfare losses.”

In contrast to Sanders’ assertion that the expansion of free trade has been a disaster for the American people, there is a near unanimous consensus among economists that the opposite is true.

An IGM Poll of dozens of the most renowned academic economists found that, weighted for each respondent’s confidence in their answer, 96 percent of economists agreed, “Freer trade improves productive efficiency and offers consumers better choices, and in the long run these gains are much larger than any effects on employment.”

When the vast majority of economists of all sorts of ideological stripes agree that free trade is a good thing, maybe, just maybe, they’re onto something.

In fact, they surely are. Using four different methods, economists at the Petersen Institute for International Economics estimated the economic benefits from the expansion of technology that facilitates international trade (such as container ships), as well as the removal of government imposed barriers to international trade (such as tariffs). Since the end of World War II, they generated “an increase in US income of roughly $1 trillion a year,” which translates into an increase in “annual income of about $10,000 per household.”

This result is mostly driven by the fact that foreign businesses produce many goods which are used in the production process at a lower cost than their domestic competitors. Access to these low-cost foreign inputs allows American businesses to decrease their production costs and consequently increase their total output, making the nation as a whole much wealthier than it otherwise would have been.

Moreover, contrary to common conjecture, the benefits of international trade haven’t simply accrued to the wealthy alone. Low and middle income individuals tend to spend a greater share of their income on cheap imported consumer goods than those with higher incomes. As a result, international trade tends to benefit these income groups more so than the wealthy.

Indeed, according to the President’s Council of Economic Advisers, middle income consumers have about 29 percent greater purchasing power as a result of international trade.

In other words, middle income consumers can buy 29 percent more goods and services as a result of the access to low-cost imports from foreign countries.

Low income consumers see even greater gains with 62 percent higher purchasing power as a result of trade. In contrast, the top 10 percent of income earners only saw an increase in purchasing power of 3 percent as a result of trade.

On top of that, international trade has provided benefits by bringing new and innovative products to American consumers.

According seminal research by Christian Broda of the University of Chicago and David E. Weinstein of Colombia University, the variety of imported goods increased three-fold from 1972 to 2001. The value to American consumers of this import induced expanded product variety is estimated to be equivalent to 2.6 percent of national income, about $450 billion as of 2014. That’s not exactly small change.

The spread of free trade has also made considerable contributions to environmental protection, gender equality, and global poverty reduction. As a result of the spread of clean technology facilitated by freer trade, “every 1 percent increase in income as a result of trade liberalization (the removal of government imposed barriers to trade), pollution concentrations fall by 1 percent,” according to the Council of Economic Advisers.

The CEA also has found that “industries with larger tariff declines saw greater reductions in the [gender] wage gap,” suggesting that facilitating foreign competition through trade liberalization reduces the ability of employers to discriminate against women.

In regards to global poverty reduction, research has shown that in response to US import tariff cuts, developing countries, such as Vietnam, export more to the US, leading to higher incomes and less poverty.

Despite the large gains from trade America has already reaped, there is still room for improvement (contrary to Sen. Sanders’ accusations of “unfettered” free trade). The PIIE economists estimate that further trade liberalization would increase “US household income between $4,000 and $5,300 annually,” leading the them to conclude that, “in the future as in the past, free trade can significantly raise income — and quality of life — in the United States.”

Ultimately, the conclusion that most economists seem to reach is that, from being a disaster, the expansion of free trade has been a tremendous success, and that further trade liberalization would most likely make Americans, and the rest of the world, considerably better off.

Don’t let fear-mongering about foreigners and China scare you: free trade benefits everyone, especially the poor, while protectionism benefits only the politically powerful.

Corey Iacono

Corey Iacono is a student at the University of Rhode Island majoring in pharmaceutical science and minoring in economics.

Are CEOs Overpaid? by Gary M. Galles

Are corporate managers and CEOs overpaid?

Many politicians rail against “overpaid” corporate managers. But these attacks overlook the issues of risk and uncertainty.

Workers agree to compensation before performing their work. Consequently, their compensation reflects not a known value but their expected value when arrangements are made.

Managers who turn out more productive than expected will have been underpaid, those less productive than expected will have been overpaid. But examples of the latter don’t prove managers are generally overpaid.

As performance reveals productivity, competition will also bid compensation of superior managers up and inferior managers down. And we must consider the present value of that entire stream, not a given year’s results, to evaluate managers’ productivity versus pay.

No manager is always right, but not every mistake is proof that they’re overpaid. They are paid for superior, not flawless, judgment — fewer mistakes, but not no mistakes.

That is another reason top managers of large enterprises will be very highly compensated. A 1% higher probability of being right on a $1 billion bet is very valuable, and even more so for a $10 billion bet. But even the best will err sometimes, so mistakes don’t prove shareholders are overpaying for managerial judgment.

This is part of a series of micro-blogs by Professor Galles responding to frequently asked questions on economic issues. If you have a question, emailAnythingPeaceful@FEE.org. 

The Pope’s Misplaced Focus

Pope John Francis’ upcoming visit to the U.S. is generating quite a bit of excitement here, especially among his Catholic faithful.  But for me and many others, his visit is generating consternation, not excitement.

Usually, most people tend to have great respect and affection for the Pope.  He is usually viewed by the public as a beacon of moral guidance, even for those who are non-Catholics.  This is definitely a view I once had of previous Popes.

But I must admit that my respect for this current Pope, John Francis is somewhat diminished.

I am totally confused by his constant advocating for policies that goes against the Catholic Church’s own teachings.  On the issue of homosexuality his position is, “Who are we to judge?”  Though church doctrine is very clear on this issue.

He is a fanatical supporter of open borders; in his view people have an inherent right to enter illegally into any country they choose as long as the ends justify the means.

He rabidly promotes theories in support of global warming, despite the fact that he is one of the biggest contributors to it.  When the Pope travels, he normally charters an Alitalia A320 jet.  It is estimated that the pope travels about 100,000 miles per year.  So this means based on the type of plane the Pope flies, he emits 20 pounds of CO2 for every mile of flight which is 2,000,000 pounds a year.

Every denomination has their own precepts that their members must abide by.  Likewise, nations have laws that their citizens or visitors must abide by.

Poverty or wanting a better life is not sufficient reason for people to break our laws to enter into our country.  The Pope expects Catholics to abide by the rules of Catholicism; so why should America expect anything less from those who seek entry into our country?

So, by the Pope’s standard I, as a Baptist, should still be able to participate in all things Catholic; even though I don’t adhere to Catholicism.

The Pope, in many ways, is operating just like Obama is in the U.S.  They both are picking and choosing which rules and laws they want to abide by.

Forgive me for not being able to get beyond the fact that the Pope has spent very little time dealing with the child abuse that has taken place in his church; but yet he seems to have plenty of time to meet with illegals, homosexuals and promote global warming

Am I the only one who finds it offensive that the Pope will be meeting with some of those in the U.S. illegally, but will not be meeting with families that have had family members killed, raped, or maimed by illegals?

Am I the only one who finds it offensive that the Pope will not be meeting with any of the victims of sexual abuse from within the Catholic Church?

Am I the only one who finds it offensive that the Pope constantly talks about income inequality and the need for employers to pay their employees more money; but he has never discussed what is the obligation of employees to their employers (more productivity and more efficiency, etc.)?

The Pope should not be aligned to a political agenda, but rather what is right or wrong.

America has no moral obligation to allow those who enter our country illegally to stay in our country no more so than the Pope allowing someone who refuses to abide by the rules of Catholicism should be allowed to say they are a member of the Catholic Church.

Furthermore, the Bible is very clear, a man’s first responsibility is for the well being of his family, not his neighbor’s family.

The Pope seems to be on a global tour to promote an entitlement agenda as opposed to being a beacon for right and wrong.  Even if you are poor and downtrodden, you still are responsible for being responsible.

Many of the illegals coming to the U.S. are having children that they can’t afford to provide for.  How many speeches has the Pope given on individual responsibility?

How many speeches has the Pope given on the need to fire and prosecute every priest that has molested or covered up sexual abuse of kids in the Catholic Church?

How many speeches has the Pope given about what are an employee’s obligations to his employer?

I really believe the Pope’s heart is in the right place, but the issues he is focusing on should be subservient to the more critical issues listed above.

I definitely think the church can and should play a constructive role in our society, especially to those who are in need.  In many respects, I think the faith community is better equipped to deal with a lot of the social ills of our society than our government is.

But the Pope cannot shine the light on my darkness until he is first willing to shine the light on his on darkness.  Until then, the Pope’s moral compass is pointing in the wrong direction.

How Sexist Is Your Office Temp? by Sarah Skwire

My Facebook wall is bursting with people arguing over a recent article from theWashington Post that claims that air conditioning in the office is sexist.

Women, argues Petula Dvorak, are naturally inclined to suffer more from the cold, so office thermostats set at 68 or 70 degrees keep men comfortable, but make women miserable. Her article strongly implies that this is done because men lack consideration for the comfort of others and because women are denied the power and the agency to get temperatures set where they want them.

I am a small cold woman who keeps two blankets in her office. I sympathize.

But despite my sympathy, I think Dvorak — and most of my Facebook friends — are missing an extremely important point: The fact that there are women suffering in overly air-conditioned offices is not a sign of how oppressed we are. It is a sign of how far we have come.

The economist Claudia Goldin has written persuasively about the long-term changes in women’s work over the course of the 20th century. She notes that the soaring rate of women’s labor force participation from the 1950s-1970s is part of a greater, century-long revolution. And it is that revolution that means that there are more and more women who are able to be in an office to begin with.

Once we’re in the office, we’re cold. But let’s not allow the chill to lull us to sleep. We can complain so loudly about the A/C because women are present in working environments in increasing numbers. That’s a good thing.

Dvorak gets a lot of mileage from her outrage over men’s office attire. They wear suits and ties and broadcloth shirts and are thus comfortable in air conditioning, while women dressed in seasonally-appropriate attire shiver from cold.

Why, she wonders, don’t men simply dress more appropriately?

Office dress codes are certainly part of the answer, but a larger part of the answer seems to be that women got a revolution that has missed men entirely — a revolution in dress.

Underneath her conservative suit, the working woman of the 1950s would have worn something like the Playtex Living Girdle, made of perforated rubber, and designed to produce the sleek figure required by the fashions of the time.

Rubber girdles certainly did that. But they were also hot, sweaty, and uncomfortable. Women who were freed of them by the new fashions of the ‘60s and the invention of pantyhose were nothing but grateful.

And the current generation of women — who have rejected even pantyhose as a relic of the past — are freer than ever… and colder. Ditching girdles and hose means that we have fewer layers between us and the office air conditioning. We’ve burned our foundation garments, but the fire hasn’t kept us warm.

I certainly don’t suggest returning to girdles or leaving the workplace in order to stay warm.

But I do think it’s dumb to blame the patriarchy, as represented by the guy in the next cubicle, for the fact that we’re cold.

We’re cold because we won the revolution. And now we have the power to request more equitable dress codes for our male colleagues, or to design offices with individualized climate controls, or to recognize that the world isn’t perfect, but that sometimes a little sweater can help.

Sarah Skwire
Sarah Skwire

Sarah Skwire is a senior fellow at Liberty Fund, Inc. She is a poet and author of the writing textbook Writing with a Thesis.

The War on Air Conditioning Heats Up: Is Climate Control Immoral? by Sarah Skwire

It started with the pope. In his recent encyclical, Laudato Si’, he singled out air conditioning as a particularly good example of wasteful habits and excessive consumption that overcome our better natures:

People may well have a growing ecological sensitivity but it has not succeeded in changing their harmful habits of consumption which, rather than decreasing, appear to be growing all the more. A simple example is the increasing use and power of air-conditioning.

Now, it seems to be open season on air conditioning. From a raging Facebook debate over an article that claims that air conditioning is an oppressive tool of the patriarchy to an article in the Washington Post that calls the American use of air conditioning an “addiction” and compares it unfavorably to the European willingness to sweat through the heat of summer, air conditioning is under attack. So I want to defend it.

Understand that when I defend air conditioning, I do so as something of a reluctant proponent. I grew up in the Midwest, and I have always loved sitting on the screened-in porch, rocking on the porch swing, drinking a glass of something cold. I worked in Key West during the summer after my sophomore year of college, lived in an apartment with no air conditioning, and discovered the enormous value of ceiling fans. A lazy, hot summer day can be a real pleasure.

However, let’s not kid ourselves. There were frequent nights in my childhood when it was just too hot to sleep, and the entire family would hunker down in the one air-conditioned room of the house — my father’s attic study — to cool off at night. When we moved from that house to a place that had central air, none of us complained.

And after my recent article on home canning, my friend Kathryn wrote to say,

When I was growing up in the Deep South, everybody I knew had a garden, shelled beans and peas, and canned. It could have been an Olympic event. What I remember most — besides how good the food was — is how hot it was, all those hours spent over huge pots of boiling something or other on the stove in a house with no air conditioning.

There’s a lot to be said for being able to cook in comfort and to enjoy the screened-in porch by choice rather than necessity. Making your family more comfortable is one of the great advantages of an increasingly wealthy society, after all.

So when I read that the US Department of Energy says that you can save about 11 percent on your electric bill by raising the thermostat from 72 to 77 degrees, mostly I want to invite the Department of Energy to come over to my 1929 bungalow and see if they can get any sleep in my refinished attic bedroom when the thermostat is set to 77 degrees, but the room temperature is a cozy 80-something.

And when I read Petula Dvorak arguing that air conditioning is a tool of sexism because “all these women [are freezing] who actually dress for the season — linens, sundresses, flowy silk shirts, short-sleeve tops — changing their wardrobes to fit the sweltering temperatures around them. … And then there are the men, stalwart in their business armor, manipulating their environment for their own comfort, heaven forbid they make any adjustments in what they wear,” mostly I want to ask her if she’s read the dress codes for most professional offices. In my office, women can wear sleeveless tops and open-toed shoes in the summer. Men have to wear a jacket and tie. Air conditioning isn’t sexist. Modern dress codes very well might be.

But arguments based on nostalgia or gender are mostly easily dismissed. Moral arguments, like those made by Pope Francis or by those who are concerned about the environmental and energy impact of air conditioning, are more serious and require real attention.

Is it immoral to use air conditioning?

Pope Francis certainly suggests it is. And the article in the Washington Post that compares US and European air conditioning use agrees, suggesting that the United States prefers the short-term benefits of air conditioning over the long-term dangers of potential global warming — and that our air conditioning use “will make it harder for the US to ask other countries to continue to abstain from using it to save energy.” We are meant to be deeply concerned about the global environmental impact as countries like India, Indonesia, and Brazil become wealthy enough to afford widespread air conditioning. We are meant to set a good example.

But two months before the Washington Post worried that the United States has made it difficult to persuade India not to use air conditioning, 2,500 Indians died in one of the worst heat waves in the country’s history. This June, 780 people died in a four-day heat wave in Karachi, Pakistan. And in 2003, a heat wave that spanned Europe killed 70,000. Meanwhile, in the United States, heat causes an average of only 618 deaths per year, and the more than 5,000 North American deaths in the un-air-conditioned days of 1936 remain a grim outlier.

Air conditioning is not immoral. Possessing a technology that can prevent mortality numbers like these and not using it? That’s immoral.

Air conditioning is, for most of us, a small summertime luxury. For others, it is a life-saving necessity. I am sure that it has environmental effects. Benefits always have costs, and there’s no such thing as a free climate-controlled lunch. But rather than addressing those costs by trying to limit the use of air conditioning and by insisting that developing nations not use the technologies that rocketed the developed world to success, perhaps we should be focusing on innovating new kinds of air conditioning that can keep us cool at a lesser cost.

I bet the kids who will invent that technology have already been born. I pray that they do not die in a heat wave before they can share it with us.


Sarah Skwire

Sarah Skwire is a senior fellow at Liberty Fund, Inc. She is a poet and author of the writing textbook Writing with a Thesis.

Capitalists from Outer Space by B.K. Marcus

When the aliens stop trifling with crop circles, bumpkin abduction, and indelicate probes and finally introduce themselves to the rest of humanity, will they turn out to be partisans of central planning, interventionism, or unhampered markets?

This is not the question asked by the Search for Extraterrestrial Intelligence (SETI) Institute, but whether or not the institute’s scientists realize it, the answer is crucial to their search.

Signs of Intelligent Life

The SETI Institute was founded by Frank Drake and the late Carl Sagan. Its scientists do not believe we have been visited yet. UFO sightings and abduction stories don’t stand up under scientific scrutiny, they say. Nor are they waiting for flying saucers. Because the aliens’ signals will likely reach Earth before their spaceships do, SETI monitors the skies for transmissions from advanced civilizations orbiting distant stars.

The scientific search for evidence of advanced alien societies began in 1960, when Drake aimed a 25-meter dish at two nearby stars. The previous year, the journal Nature had published an article called “Searching for Interstellar Communications,” which suggested that distant civilizations might transmit greetings at the same wavelength as the radio emission of hydrogen (the universe’s most common element). Drake found no such signals, nor has SETI found any evidence of interstellar salutations since. But it’s not giving up.

The Truth Is Out There

Before we can ask after advanced alien political economy, we must confront the more basic question: Is there anybody out there? SETI has been searching for over half a century. That may seem like a long time, but there are, as Sagan underscored, “billions and billions of stars.” How many of them should we expect to monitor before finding one that’s transmitting?

In an attempt to address, if not answer, the question, Drake proposed an equation in 1961 to summarize the concepts scientists think are relevant to any educated guess.

Here is how Sagan explains the Drake equation in the book Cosmos:

N*, the number of stars in the Milky Way Galaxy;
fp, the fraction of stars that have planetary systems;
ne, the number of planets in a given system that are ecologically suitable for life;
fl, the fraction of otherwise suitable planets on which life actually arises;
fi, the fraction of inhabited planets on which an intelligent form of life evolves;
fc, the fraction of planets inhabited by intelligent beings on which a communicative technical civilization develops;
and fL, the fraction of a planetary lifetime graced by a technical civilization.

The End of the World as We Know It

Sagan expounds on all the terms in the equation, but it’s that last one that absorbs him: How long can an advanced civilization last before it destroys itself?

Perhaps civilizations arise repeatedly, inexorably, on innumerable planets in the Milky Way, but are generally unstable; so all but a tiny fraction are unable to survive their technology and succumb to greed and ignorance, pollution and nuclear war.

Sagan wrote Cosmos toward the end of the Cold War. He mentioned other threats — greed, ignorance, pollution — but the specter of mutual annihilation haunted him. When he imagined the end of an advanced society, he pictured something permanent.

“It is hardly out of the question,” he wrote, “that we might destroy ourselves tomorrow.” Perhaps, Sagan feared, the general pattern is for civilizations to “take billions of years of tortuous evolution to arise, and then snuff themselves out in an instant of unforgivable neglect.”

The Rise and Fall of Civilization

We cannot know if the civilizational survival rate on other planets is high or low, and so the final term in the Drake equation is guesswork, but some guesses are better than others.

“One of the great virtues of [Drake’s] equation,” Sagan wrote, “is that it involves subjects ranging from stellar and planetary astronomy to organic chemistry, evolutionary biology, history, politics and abnormal psychology.”

That’s quite an array of topics to inform an educated guess, but notice that he doesn’t mention economics.

Perhaps he thought politics covered it, but Sagan’s political focus was more on questions of war and peace than poverty and wealth. In particular, he considered the end of civilization to be an event from which it would take a planet billions of years to recover.

The history of our own species suggests that this view is too narrow. Yes, a nuclear war could wipe out humanity, but civilizations do destroy themselves in less permanent ways.

There have been two dark ages in Western history: the Mycenaean-Greek and the post-Roman. Both were marked by retrogression in technology, art, and literacy. Both saw a drop in overall population and in population density, as survivors left towns and cities for a more autarkic existence in the countryside. And both underwent a radical decline in foreign trade and the division of labor. Market societies deteriorated into disparate cultures of subsistence farming.

The ultimate causes of the Greek Dark Age are a mystery. As with the later fall of the Roman Empire, the Mycenaean demise was marked by “barbarian” invasions, but the hungry hoards weren’t new: successful invasions depend on weakened defenses and deteriorating infrastructure. What we know is that worsening poverty marked the fall, whether as cause, effect, or both.

The reasons for the fall of the Roman West are more evident, if still debated. Despite claims of lead poisoning, poor sanitation, too much religion, too little religion, and even, believe it or not, inadequate central planning, the empire’s decline resulted from bad economic policy.

To help us see this more clearly,Freeman writer Nicholas Davidson suggests in his magnificent 1987 article “The Ancient Suicide of the West” that we look to the signs of cultural and economic decline rather than to the changes, however drastic, in political leadership. While the Western empire did not fall to the barbarians until the fifth century AD, “The Roman economy [had] reached its peak toward the middle of the first century AD and thereafter began to decline.” As with the Mycenaean Greeks, the decay was evident in art and literature, science and technology. Civilization cannot advance in poverty. Wealth and civilization progress together.

How to Kill Progress

“The stagnation in all aspects of society,” Davidson writes, “was associated with a continuous extension of governmental functions. Social engineering was tried on the grand scale. The state relentlessly expanded into commerce, industry, and private life.”

As we look to our own future — or anticipate the politics of our alien brethren — we can draw on the experience of humanity’s past to help us appreciate the economics of progress and decline. Over and over, we see the same pattern: some group gains a temporary benefit from a world in flux. When further social and economic changes check those advantages, the old guard turn to the state to protect them from the dynamism of a healthy society. Adaptation is stymied. Nothing is allowed to evolve. The politically privileged — military and civilian, rich and poor — sacrifice their civilization in an doomed attempt to ward off change.

The Sustainable Society

Evolutionary science, economic theory, and cybernetics yield the same lessons: stability requires flexibility; complexity flourishes under spontaneous order; centralization leads to stagnation.

To those general lessons, economics adds insights specific to the context of scarcity: private property and voluntary exchange produce greater general wealth, longer time horizons, and ever more investment in the “luxuries” of scientific investigation, technological innovation, and a more active stewardship of the environment. Trade promotes peace, and a global division of labor unites the world’s cultures in mutual self-interest.

If, as Sagan contends, an advanced civilization would require political stability and sizable long-term investment in science and technology to survive an interstellar spacefaring phase, then we should expect any such civilization to embrace a planetwide system of free trade and free markets grounded in private property. For the civilization to last the centuries and millennia necessary to explore and colonize the stars, its governing institutions will have to be minimal and decentralized.

The aliens will, in short, embrace what Adam Smith called “the system of natural liberty.” Behind their transmissions, SETI should expect to find the invisible hand.

Scientists versus Freedom

When we do make contact, “the consequences for our own civilization will be stunning,” Sagan wrote. Humanity will gain “insights on alien science and technology, art, music, politics, ethics, philosophy and religion…. We will know what else is possible.”

What did Sagan himself believe possible? Had he survived to witness first contact, would he be surprised to learn of the capitalist political economy at the foundation of an advanced extraterrestrial civilization?

Neil deGrasse Tyson, who remade the Cosmos television series for the 21st century, recommends reading Adam Smith’s Wealth of Nations but only “to learn that capitalism is an economy of greed, a force of nature unto itself.”

We shouldn’t assume that Tyson represents Sagan’s economic views, but when Sagan did address questions of policy, he advocated a larger welfare state and greater government spending. When he talked about “us” and “our” responsibilities, he invariably meant governments, not private individuals.

Sagan wrote, “It may be that civilizations can be divided into two great categories: one in which the scientists are unable to convince nonscientists to authorize a search for extraplanetary intelligence … and another category in which the grand vision of contact with other civilizations is shared widely.”

Why would scientists have to persuade anyone else to authorize anything? Sagan could only imagine science funded by government. It was apparently beyond credibility that less widely shared visions can secure sufficient funding.

It’s a safe guess, then, that when he talks of civilizations that are “unable to survive their technology and succumb to greed,” Sagan is talking about the profit motive.

And yet, it is the profit motive that drives innovation, and it is the great wealth generated by profit seekers that allows later generations of innovators to pursue their visions with fewer financial inducements. Whether directly or indirectly, profits pay for progress.

Self-Interested Enlightenment

Why does it matter if astronomers misunderstand the market? Does SETI really need to appreciate the virtues of individual liberty to monitor the heavens for signs of intelligent life?

Scientists can and do excel in their fields without understanding how society works. But that doesn’t mean their ignorance of economics is harmless. The more admired they are as scientists — especially as popularizers of science — the more damage they can do when they speak authoritatively outside their fields. Their brilliance in one discipline can make them overconfident about their grasp of others. And increasingly, the questions facing the scientific community cross multiple specialties. It was the cross-disciplinary nature of Drake’s equation that Sagan saw as its great virtue.

The predictions of the astronomer looking for extraterrestrial socialists will be different from those of someone who expects the first signals of alien origin to come from a radically decentralized civilization — a society of private individuals who have discovered the sustainable harmony of self-interest and the general welfare.

After that first contact, after we’ve gained “insights on alien science and technology” and we get around to learning alien history, will we discover that their species has witnessed civilizations rise and fall? What was it that finally allowed them to break the cycle? How did they avoid stagnation, decline, and self-destruction?

How did they, as a culture, come to accept the economic way of thinking, embrace the philosophy of freedom, and develop a sustainable civilization capable of reaching out to us, the denizens of a less developed world?


B.K. Marcus

B.K. Marcus is managing editor of the Freeman.

The Gig Economy Makes Karl Marx’s Dreams Come True And It’s All Capitalism’s Doing by Max Borders

When Joe Average steps out of his car after completing his shift for Lyft, he does so on his own terms. Nobody tells him when to start. Nobody tells him when to stop. The siren song that is prime time pricing might have coaxed him off the couch, but ultimately it was his call. And with the rest of his day, he’s going to go fishing. You see, Joe loves to fish — even more than he loves making money. After dinner, he might take some time to criticize the second season of True Detective.

Would ole Karl Marx have been happy with this result?

In The German Ideology, Marx wrote,

For as soon as the distribution of labour comes into being, each man has a particular, exclusive sphere of activity, which is forced upon him and from which he cannot escape. He is a hunter, a fisherman, a herdsman, or a critical critic, and must remain so if he does not want to lose his means of livelihood; while in communist society, where nobody has one exclusive sphere of activity but each can become accomplished in any branch he wishes, society regulates the general production and thus makes it possible for me to do one thing today and another tomorrow, to hunt in the morning, fish in the afternoon, rear cattle in the evening, criticise after dinner, just as I have a mind, without ever becoming hunter, fisherman, herdsman or critic.

Marx should be delighted — oh, except that it’s capitalism, not communism, that’s allowing Joe to be a fisherman and a critic on his own terms.

The sharing or “gig” economy is not only disrupting the way people live and work; it’s dividing the left considerably.

On the one hand, you have the nostalgic leftists who want Joe to work a nine-to-five job and skip the fishing. You know, like people did in the 1950s. As Freeman columnist Steve Horwitz writes, presidential candidate Hillary Clinton

longs for a time like the 1950s when workers had the structure of the corporate world and unions through which to lobby and negotiate for pay and benefits, rather than the so-called “gig” economy of so many modern freelance employees, such as Uber drivers. “This on-demand or so-called gig economy is creating exciting opportunities and unleashing innovation,” Clinton said, “but it’s also raising hard questions about workplace protection and what a good job will look like in the future.”

Joe already told us what a good job looks like. It’s one that lets him spend time fishing and criticizing.

More confusing (or confused, perhaps) is Paul Mason’s writing in the Guardian. He lauds “postcapitalism,” which has all the hallmarks of a society Clinton is worried about:

Postcapitalism is possible because of three major changes information technology has brought about in the past 25 years. First, it has reduced the need for work, blurred the edges between work and free time and loosened the relationship between work and wages.

Bingo. The gig economy. But does it make sense to give capitalism a different name? I suppose one could. After all, Marx coined the term. But Marx’s definition of capitalism is a system based on private ownership of the means of production. Has that dynamic fundamentally changed?

Far from it. The sharing economy is simply decentralizing power by allowing ordinary people to use their own small-scale means of production. By solving coordination problems and lowering transaction costs, technology is augmenting capitalism.

When Joe drives for Lyft, for example, his car is still his car. And now more of his time is his, too. Capitalism, even as Marx defined it, hasn’t fundamentally changed. But the use of technology to awaken sleeping private capital is allowing the system to evolve — and rather nicely if you’re Joe Average, or one of thousands of other workers like him.

Now, I’m not saying that there is nothing interesting going on in the electronic commons. Ideas are being configured and reconfigured in the networked economy. Many of those ideas are being taken out of the intellectual-property regime, thanks to open sourcing, and this can be a good thing. There are fierce debates about whether intellectual property (claims to property in ideas and in nonscarce goods) is justifiable. But passing over those debates, more and more open-source technologies are coming online for exploitation by everyone.

Do open sourcing and the creative commons take us to postcapitalism?

I don’t know. But fundamentally, as long as the process is voluntary and carried out peacefully by a community of cooperators, who cares what you call it? Should we be upset that the guy who founded Lyft is getting rich from the tech? Some people are, because they see the accumulation of wealth as taboo. But Joe’s life is better than it would have been in the absence of Lyft. The company allows him to live more of the life he wants to live.

As long as Joe Average is happier, who cares what Hillary Clinton thinks?


Max Borders

Max Borders is the editor of the Freeman and director of content for FEE. He is also cofounder of the event experience Voice & Exit and author of Superwealth: Why we should stop worrying about the gap between rich and poor.

Clinton’s Startup Tax Will Crush New Businesses by Dan Gelernter

Hillary Clinton has announced that she will, if elected, raise the capital-gains tax to a maximum that equals the highest income tax bracket. She hopes to promote long-term investments by penalizing short-term ones with a tax rate that gets lower the longer an investment is held, reaching the current 20% rate only after six years.

This, Ms. Clinton says, would allow a CEO to focus on the company’s true interests rather than just making the next quarter. It is, unfortunately, exactly the sort of plan you would expect from someone who has never started a company — and who doesn’t seem to know anyone who has.

The CEO of a startup is unlike the CEO of an established business. He is not the head of a chain of command: he is the spokesman or agent of a few colleagues, entrusted for the moment to represent them. The startup CEO has one primary job, which is raising money. It is the hardest thing a young company has to do — and it is an unending process.

Most germinal startups never raise any money at all. The ones that get seed funding are already breathing rarified air, and can afford perhaps a day of celebration before they start pursuing the next round.

The picture is especially tough for tech startups. A startup that builds software doesn’t have any machinery or physical supplies to auction off if the company fails. This means that banks won’t make the kind of secured business loans of the sort small companies traditionally get.

As a result, tech startups are wholly reliant on a relatively small number of investors who are looking for something more exciting than the establishment choices and are willing to take a big gamble in the hope of a big, short-term payoff. Though Ms. Clinton’s proposal would only affect those in the top income bracket, she may be surprised to learn that those are the only people who can afford to make such investments.

Professional investors think in terms of risk: they balance the likelihood of a startup’s failure against the potential payoff of its success. Increasing the tax rate reduces the effective payoff, which increases risk. Investors can lower that risk by reducing the valuation at which they are willing to invest, which means they take a larger share of the company — a straightforward transfer of risk from investors to entrepreneurs.

Ms. Clinton’s tax therefore will not be borne by wealthy investors: it comes out of the entrepreneur’s payday. The increased tax rate means a risk-equivalent decrease in the percentage of the company the entrepreneur gets to keep. And that’s just the best-case scenario.

The other option is that the tax doesn’t get paid at all, because the investor decides the increased risk isn’t worth it — the startup can’t attract funding and dies.

That sounds melodramatic, but it is no exaggeration. A startup company never has more offers than it needs; it never raises money with time spare. Even a slight change in the risk-return balance — say, the 3.8% which Obamacare quietly laid on top of the current capital-gains — kills companies, as investors and entrepreneurs see the potential upside finally shaved past the tipping point.

A tech startup has short-term potential. That is a major part of the attraction to investors, and that makes Ms. Clinton’s proposal especially damaging. In the tech world, we all hope we’ll be the next Facebook or Twitter, but you can’t pitch that to an investor. A good tech startup takes a small, simple idea and implements it beautifully.

The most direct success scenario is an acquisition by a larger company. In the app world — and this is the upside to not having physical limitations on distribution — the timescale is remarkably accelerated. A recent benchmark example was Mailbox, purchased by Dropbox just two months after it launched.

Giving investors an incentive to not to sell will hurt entrepreneurs yet again, postponing the day their sweat equity finally has tangible value, and encouraging decisions that make tax-sense rather than business-sense.

If Hillary Clinton really wants to help entrepreneurs, she should talk to some and find out what they actually want. A lower capital-gains tax — or no capital-gains tax — would be an excellent start.

Dan Gelernter

Dan Gelernter is CEO of the technology startup Dittach.

Government Ruins the Dishwasher (Again) by Jeffrey A. Tucker

The regulatory assault on the dishwasher dates back at least a decade. For the most part, industry has gone along, perhaps grudgingly but also with a confidence that dishwashers would survive. Surely government rules wouldn’t finally make them useless.

But the latest regulatory push by the Department of Energy might have finally gone too far. The DoE says that loads of dishes can’t use more than 3.1 gallons. This amounts to a further intensification of “green” policies that are really just strategies to wreck the consumer experience.

The agency estimated that this would “save” 240 billion gallons of water over three decades. It would reduce energy consumption by 12 percent. It would save consumers $2 billion in utility bills.

But as with all such estimates, these projections have three critical problems.

First, saving money and resources is not always an absolute blessing if you have to give up the service for which the resources are used. Giving up indoor plumbing would certainly save water, just as banning the light bulb would save electricity. The purpose of resources is to use them to make our lives better.

Second, the price system is a far better guide to rational resource use than bureaucratic diktat. If the supply of water or electricity contracts, prices go up and consumers can make their own choices about how to respond. This is true with one proviso: There has to be a functioning market. This is not always true with public utilities.

Third, the bureaucrats rarely consider the possibility that people will respond to rationing by using resources in a different way. A low-flow toilet causes people to flush two and three times, a low-flow showerhead prompts people to take longer showers, and so on, with the end result of even more resource use.

What does breaking the dishwasher accomplish? It drives us back to filling sinks or just running water over dishes for 10 minutes until they are all clean, resulting in vastly more water use.

The Association of Home Appliance Manufacturers, which has quietly gone along with this nonsense all these years, has finally said no.

“At some point, they’re trying to squeeze blood from a stone that just doesn’t have any blood left in it,” said Rob McAver, the lead lobbyist.

The Association demonstrated to the regulators that the new standards do not clean the dishes. They further pointed out that this can only lead to more hand washing. The DoE now says it is revisiting the new standards to find a better solution.

All of this is rather preposterous, since dishwashers are already performing at a far lower level than they did decades ago. Even when I was growing up, they were getting better, not worse. You could put dirty dishes in, even with stuck-on egg and noodles, and they would come out perfectly clean.

I started noticing the change about five years ago. It was like one day to the next that the dishes started coming out with a gross-me-out film on the glasses. I thought it was my machine. So I bought a new one. The new one was even worse, and it broken within a year. Little by little, I started hand washing dishes first, just to make sure they are clean.

It turns out that this was happening all over the country. NPR actually discerned this trend and did a story about it. The actual source of the problem was not the machine or the user, but something that everyone had taken for granted for generations: the soap itself.

The issue here is phosphorous. The role of phosphorus in soap is critically important. It is not a cleaning agent itself but a natural chemical that unsticks the soap from fabrics and surfaces generally. You can easily see how this works by adding phosphorus to a sink full of suds. It attacks the soap and causes it to bundle up in tighter and heavier units, taking oil and dirt with it and pulling it down the drain. It is the thing that extracts the soap, making sure that it leaves surfaces.

Painters know that they absolutely must use phosphorous to prepare surfaces for painting. If they do not, they will be painting on a dirty, oily surface. This is why the only phosphorus you can now find at the hardware store is in the paint department (sold as Trisodium Phosphate). Otherwise, it is gone from all detergents that you use on clothes and dishes, which is a major reason why both fabrics and dishes are no longer as clean as they once were.

Why the war on phosphorous? It is also a fertilizer. When too much of it is dumped into rivers and lakes, algae growth takes over and kills off fish. The bulk of this comes from large-scale industrial farms in specific locations around the country. Regulators, however, took on the easy target of domestic soaps, and manufacturers faced pressure to remove it from their soaps.

Now it is impossible to get laundry or dish soap with phosphorous as part of the mix. If you want clean, you have to physically add your own by purchasing trisodium phosphate in the paint department and adding it to the mixture by hand.

Welcome to regulated America, where once fabulous consumer inventions like refrigerators, freezers, washing machines, and dishwashers have been reduced to a barely functioning state. The reasons are always the same: 1) phosphorous-free detergent, 2) a fetish with saving water, 3) weaker motors that use less electricity, 4) more tepid water due to low default settings on hot water heaters, and 5) reduced water pressure in general.

Put it all together and you have an array of products that no longer function in ways that make our lives better. There is an element of dystopia about this, especially given that these household appliances were first invented and widely deployed in postwar America. This was the country where women, in particular, first started to enjoy the “freedom from drudgery.” It was machines as much as ideology that began to enable women to cultivate professional lives outside the home.

No, we are not going to be forced back to washboards by the river anytime soon. But suddenly, the prospect of having to hand wash our dishes does indeed seem real. If the regulators really do get their way, functioning dishwashers could become like high-flow toilets: contraband to be snuck across borders and sold at a high black market prices.

It seems that the regulators can’t think of much to do these days besides ruining things we love.


Jeffrey A. Tucker

Jeffrey Tucker is Director of Digital Development at FEE, CLO of the startup Liberty.me, and editor at Laissez Faire Books. Author of five books, he speaks at FEE summer seminars and other events. His latest book is Bit by Bit: How P2P Is Freeing the World. Follow on Twitter and Like on Facebook.

Is Politics Obsolete? How People Outpace Politicians by Max Borders and Jeffrey A. Tucker

Hillary Clinton talks of cracking down on the gig economy. Donald Trump speaks of telling American corporations where they can and can’t do business abroad. Bernie Sanders says we have too many deodorant choices. They all speak about immigrants as if it were 1863.

What the heck are these people talking about?

More and more, that’s the response many people have to the current-day political speeches and rhetoric. It’s a hotly contested election, somewhat like 2008, but this time around, public engagement is low, reports Pew.

That’s no surprise, really. Whether it’s the leftists, the rightists, or everyone in between, all of these politicians seem to be blathering about a world gone by — one that has little to do with the 21st century. If they’re not tapping into people’s baser instincts of fear and nativism, they’re dusting off 20th-century talking points about creating “good jobs.”

Maybe there was a time when the political culture seemed to keep up with the pace of innovation. If so, those times are long gone. The rhetoric of electoral politics is exposing the great rift in civic life.

The tools we use every day, the technologies we love, the way we engage each other, the means by which our lives are improving are a consequences of innovation, markets, community, and globalization — that is, by the interactions of free people. Not by politics. And not by the systems politics creates.

The political election is a tired old ritual in which we send our hopes and dreams away to distant capitals. Why do we outsource them to politicians, lobbyists, and bureaucrats: people who are trapped in a system that rewards the worst in people? What’s left of governance is logrolling, spectacle, and unwanted interference in the lives of everyone else.

Politicians seem more concerned with putting the genie of innovation and entrepreneurship back in the bottle than doing anything meaningful. After the election, we try our best to ignore them and get on with life.

Politicians seem more concerned with putting the genie of innovation and entrepreneurship back in the bottle than doing anything meaningful.

In 2012, US voters reelected Barack Obama, and now we’re gearing up to elect someone else. Candidates will talk about their visions and their wonderful plans for the country. But in the last three years, virtually none of the incredible, beautiful upheaval we’ve seen has had anything to do with the presidency or with anyone politician’s plans.

In fact, when you think about what government has done for us in recent years, only one new program comes to mind: Obamacare. Opinions vary on whether that program has been deeply disappointing or an unmitigated disaster.

Now, take a step back and observe the evolution of commercial society and how it is bringing us unprecedented bounty. The digital sector of emergent, market-generated, people-driven, technology-fueled innovation is fulfilling human aspirations and spreading useful services to people in all walks of life. National borders seem ever more arbitrary. Surprises await us around every corner. Our political systems can claim credit for none of it.

And yet, we are once again being asked to turn to politicians to drive progress.

Consider how much our lives and technologies have changed since the last presidential election. Smartphone ownership has gone from 300 million to 2 billion, meaning that most of the population of the developed world — and large parts of the rest — now have access to a wireless supercomputer in their pockets. As a result, we are more in touch than ever.

There are now dozens of ways for anyone to keep in contact with anyone else through text messaging and video, and most of the services are free. Transportation in cities has fundamentally changed due to ridesharing and app-based systems that are outcompeting municipal taxis. Traditional travel lodging has been disrupted through mobile applications that turn every empty room into a hotel, and finding permanent lodging is easier than ever. You can find the ratings for any service or establishment instantly with a click or a tap, long before you purchase. You can feasibly shop for and buy a house without ever having stepped inside of it.

Cryptocurrency is becoming a viable alternative to national monies, and payment systems on distributed networks are being customized for peer-to-peer exchanges of property titles.

The mass distribution and availability of mobile applications with maps means that you are never lost, and, moreover, that you can be intensely aware of everything around you, wherever you are or wherever you are planning to be. Extended families that are spread out over large geographic regions can stay constantly in touch, chatting and playing games.

The way we help our neighbors and communities is improving. We can contribute to charitable causes with just a click. We are closer to our neighbors and their needs — whether it’s a missing cat, a call for a handyman, or childcare for Saturday night. We can be on the lookout after a break-in and share video of the perpetrators instantly.

The way we consume music has fundamentally changed. We once bought CDs. Then we downloaded particular tracks and albums. With Internet everywhere, we now stream a seemingly endless variety of genres. The switch between classical and indie rock requires only a touch. And it’s not just new music we can access, but vast archives and recreations of music dating to antiquity. Instantly.

Software packages that once cost thousands are now low-cost downloadable apps. Many of us live in the cloud now, so that no one’s life is ruined by a computer crash. Lost hardware can be found with built-in tracers — even stealing computers is harder than ever.

Where we work no longer matters as much. 4G LTE means a powerful Internet connection wherever you are, and WiFi on airlines means staying in touch even while above the clouds. Online document signing means total portability and the end of the physical world for most business transactions. You can share almost anything — whether grocery lists or whole writing projects — with anyone and work in real time. More people than ever work from home because they can.

News is now crowdsourced through Twitter and Facebook — or through mostly silly sites like BuzzFeed. There are thousands of competitors, so that we can know what we want to know wherever we are. Once there was only “national news”; now a news event has to be pretty epic to qualify, and much of the news that we are interested in never even makes old-line newspapers.

Edward Snowden revealed ubiquitous surveillance, escaped prosecution, and now, thanks to technology, has been on a worldwide speaking tour, becoming the globe’s most famous public intellectual. This is despite his having been censored and effectively exiled by the world’s biggest and most powerful state. He has a great story to tell, and that story is more powerful than any of the big shots who want him to shut up.

Pot has been effectively legalized in many American cities, and the temperature on the war against it has dropped dramatically. When dispensaries are raided, the news flies all over the Internet within minutes, creating outrage and bringing the heat down on the one-time masters of the universe. There is now a political risk to participating in the war on pot — something unthinkable even 10 years ago. And as police continue to abuse their power, citizens are waiting with cameras.

Oil prices have collapsed, revealing the fallacy of peak oil. This happened despite pressure in the opposite direction from every special interest, from environmentalists to the oil industry itself. The reason was again technological. We discovered better and cheaper ways of drilling, and, in so doing, exposed vastly more resources than anyone thought accessible.

At the very time when oil and gas seemed untouchable, we suddenly saw electric cars becoming viable options. This was not due to government mandates — regulators tried those for years — but due to some serious innovation on the part of one remarkable company. It’s not even the subsidies, such as they are, that are making the difference; it’s the fine-tuning of the machine itself. Tesla even took it a step further and released its patents into the commons, allowing innovation to spread at a market-based pace.

We are now printing houses in one day, vaping instead of smoking, legally purchasing pharmaceuticals abroad, using drones to deliver consumer products, and enjoying one-day delivery of just about everything.

In the last four years, the ebook became a mass consumer item, outselling the physical book and readable on devices within the budget of just about everyone. And despite attempts to keep books offline, just about anything is now available for download, putting all the world’s great literature, in all major languages, at our fingertips.

Here we go again, playing “let’s pretend” and electing leaders under the old-fashioned presumption that it is politics that improves the world and drives history forward.

And speaking of languages, we now have instant access to translation programs that allow us to email and even text with anyone in a way he or she can understand regardless of language. It’s an awesome thing to consider that this final barrier to universal harmony, once seen as insuperable, is in the process of melting away.

These are all ways in which the world has been improved through markets, creativity, and free association. And yet, here we go again, playing “let’s pretend” and electing leaders under the old-fashioned presumption that it is politics that improves the world and drives history forward.

Look around: progress is everywhere. And it is not because we are electing the “right people.” Progress occurs despite politics and politicians, not because of them.

Max Borders

Max Borders is the editor of the Freeman and director of content for FEE. He is also cofounder of the event experience Voice & Exit and author of Superwealth: Why we should stop worrying about the gap between rich and poor.

Jeffrey A. Tucker

Jeffrey Tucker is Director of Digital Development at FEE, CLO of the startup Liberty.me, and editor at Laissez Faire Books. Author of five books, he speaks at FEE summer seminars and other events. His latest book is Bit by Bit: How P2P Is Freeing the World. Follow on Twitter and Like on Facebook.

Who Is Building the Private, Peer-to-Peer Marketplace? An Interview with Sam Patterson

Sam Patterson (sam@samuelrpatterson.com) is an author and technology enthusiast from Virginia. He has written about decentralized technologies such as bitcoin and OpenBazaar. Sam recently cofounded a company called OB1 to help build the decentralized marketplace OpenBazaar.

The Freeman: Your project, OpenBazaar, has been awarded $1 million in seed funding so far. Congratulations. What is it, and what does it do?

Patterson: OpenBazaar is an open source project to create a decentralized marketplace online where anyone in the world can buy or sell any goods or services with anyone else in the world, for free, using bitcoin. A few of the core project members (including myself) recently started a company called OB1, which received the funding in order to hire full-time developers and make OpenBazaar a reality.

Online commerce today is mostly centralized; companies own websites where users visit to buy and sell things. Those companies charge fees, monitor their users’ data, and censor their transactions based on their own rules and on behalf of the government.

OpenBazaar is different. Instead of relying on a centralized third party, trades occur directly between buyers and sellers. Users install peer-to-peer software on their computers, similar to bitcoin or BitTorrent, and this connects them to other users running the same software. They transact in bitcoin. Since there’s no middleman, there are no fees, no collection of data, and no censorship of trade.

The Freeman: Some people will object to OpenBazaar by saying it’s not transparent — that it will help criminals thrive. How do you answer such charges?

Patterson: Some have inaccurately labeled us as an evolved Silk Road — an underground drug marketplace. This is absolutely false, for many reasons. The Silk Road was centralized and run by a small group for profit. It catered to a specific group of people who traded in illicit goods.

In contrast, OpenBazaar is a decentralized marketplace, not run for profit. It doesn’t cater to any group, or any type of trade, but is open for all users to buy and sell anything they want with each other. It’s a much bigger vision than these narrow dark markets.

We expect that use of OpenBazaar will reflect markets in society. There will be some users who engage in activity that is morally or legally objectionable, but the vast majority of users will be engaging in positive and constructive trade. We don’t know exactly how people will use OpenBazaar to better their lives, but we believe that it will, and we can’t wait to see it happen.

The Freeman: What are the implications of this kind of technology for the world’s poorest people?

Patterson: Most of the existing centralized market platforms that I mentioned earlier don’t focus on the developing world, or even if they do, the payment methods used aren’t accessible for many of the world’s poor. Bitcoin requires no credit checks to use; an Internet connection and computer are all that’s needed. OpenBazaar is the same as bitcoin in this sense. It costs nothing to join and use, and the trade is direct between buyers and sellers; there are no middlemen to take a cut. We hope that by lowering the barriers to entry for online trade, OpenBazaar and bitcoin will bring millions of new users into the online economy.

The Freeman: What are the implications of this kind of technology for most of our readers — that is, wealthier Westerners?

Patterson: Establishing a protocol, client, and network for people to directly engage in trade with each other allows for more efficient transactions. Sellers on eBay who use PayPal regularly pay up to 10 percent fees on each sale. Those are 0 percent on OpenBazaar.

OpenBazaar is also more private. Instead of the centralized platforms getting all the information about your buying or selling habits, now that information is only available to the parties you directly engage with.

Also, if some of your readers are already bitcoin users, OpenBazaar is the first decentralized platform for them to spend their decentralized money. Many value decentralized technology simply because it takes power away from the gatekeepers in our world.

The Freeman: How do you market OpenBazaar? How do you build culture around it?

Patterson: We haven’t needed to market OpenBazaar so far. The bitcoin community is very excited to see it built. Once we look to go beyond bitcoin users and into the broader e-commerce space, then we’ll need to consider how to market ourselves. Likely, it will be around the lack of fees, which is compelling to retailers who have small margins.

Our culture is one that supports free trade and voluntary interactions in society. The ability to engage in trade directly with someone in person is a great thing, and it’s a shame that hasn’t been possible online — until now.

The Freeman: How flexible, robust, and “anti-fragile” is this system — especially with respect to predatory states who will likely try to foil its development?

Patterson: OpenBazaar is very robust, similar in design to bitcoin or BitTorrent. Because it’s run locally on users’ computers, there’s no central point of failure to attack. We don’t anticipate that OpenBazaar will face opposition from governments any more than other online platforms have; they have the same tools at their disposal to go after individual storeowners. But they cannot take down the whole system at once, unlike the existing platforms.

The Freeman: When will OpenBazaar be ready to use?

Patterson: We plan on publishing the first full release in November this year. The code is open source so developers can view it any time at our Github.

The Freeman: Thank you for speaking with us, Sam.


The Freeman

The Freeman is the flagship publication of the Foundation for Economic Education and one of the oldest and most respected journals of liberty in America. For more than 50 years it has uncompromisingly defended the ideals of the free society.