Category: free trade & free markets

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free trade & free markets political economy Popular

Opportunity for . . . All?

licensing, license, permission, work, labor, regulations

Simple pleasures are the best. So are simple questions.

Senate Bill 2306 in North Dakota “would make it easier for spouses of military personnel to transfer their existing occupational licenses for use in North Dakota, provided they are in good standing and licensed by a reasonable entity,” explains Rob Port at his SayAnythingBlog.

Occupational licensing has exploded, covering a mere 4-5 percent of occupations 60 years ago, but nearly 30 percent today. That’s a serious hurdle for folks trying to break into the marketplace.

Over at the Foundation for Economic Education, economist Daniel Mitchell calls licensing a “win-win” for politicians and interest groups that “get to impose barriers that limit competition.” 

Not winning? Taxpayers and consumers, says Mitchell. “Or a poor person who wants to get a job.”

An Institute for Justice report released last November concluded that “licensing costs the American economy $197.3 billion” annually by “preventing people from working in the occupations for which they are best suited” and “forcing people to fulfill burdensome licensing requirements that do not raise quality.” Meanwhile, the health and safety benefits attributable to this licensing labyrinth seem scant.

A recent Grand Forks Herald editorial endorsing SB-2306 pointed to the state’s “more than 13,000 unfilled jobs, many of which require licensing,” arguing that “[o]ften, trailing military spouses are qualified to fill those openings, but because of the existing licensing process they are not able to immediately work.”

“[W]hy not make this sort of license reciprocity good for everyone moving into our state?” Mr. Port adroitly inquired.

Yes, Big Government: Tear down these barriers!

For all.

This is Common Sense. I’m Paul Jacob.

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licensing, license, permission, work, labor, regulations

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free trade & free markets media and media people too much government

A Former Economist

Paul Krugman, libertarianism, libertarian, freedom, shutdown

Paul Krugman, New York Times columnist and former economist, tested our patience last week with “Trump’s Big Libertarian Experiment.” How many non sequiturs will squeak past the Gray Lady’s editorial department? 

Loads — and all about how the federal government shutdown gives limited government folks what they want: less government.

Subsidy checks to farmers aren’t going out, as “libertarian organizations like Cato” have long advocated. Sure. But it’s no policy change.

As soon as there’s a budget deal, those checks will be made up.

Further, “businesspeople are furious that the Small Business Administration isn’t making loans.” 

Well, it’s high time businesses were weaned off the SBA teat — and a few whiners do not a case for subsidy make.

And then there’s the Food and Drug Administration, which can no longer inspect foods. Since “there’s a long conservative tradition, going back to Milton Friedman, that condemns the F.D.A.’s existence as an unwarranted interference in the free market” libertarians must be pleased, eh?

There is also a long tradition among economists that says businesses don’t get rich poisoning their customers, and that there are many mechanisms in place — and, barring the FDA, more would be in place — to ensure customers that they won’t be infected by eating . . . Romaine lettuce.

Which then Krugman admits . . . as if he had belatedly recalled Friedman’s lesson in Capitalism and Freedom. He concedes that the shutdown is not the way Friedman would go about limiting government. Besides, “libertarian ideology isn’t a real force within the G.O.P.”

So what’s the point?

Krugman ends with talk of a smell test: does lack of food inspections smell like freedom?

Something stinks here. But it isn’t spoiled food. Or freedom.

This is Common Sense. I’m Paul Jacob.

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Paul Krugman, libertarianism, libertarian, freedom, shutdown

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Towards a Genealogy of Policy

tenement, rent control, New York, de Blasio

If it seems like each new government program is more intrusive than the last, there’s a reason. That last one did not work as planned. So a new one gets concocted to fix its mess. 

The latest? New York City Mayor Bill de Blasio has established a new enforcement bureau, the Mayor’s Office to Protect Tenants, to sic a “new sheriff” on property owners.

“When a landlord tries to push out a tenant by making their home unlivable, a team of inspectors and law enforcement agents will be on the ground in time to stop it,” the mayor explained last week in his latest State of the City Address. 

And he means business, er, government: “we will seize their buildings, and we will put them in the hands of a community nonprofit that will treat tenants with the respect they deserve.”

Well, that cannot possibly go wrong!

But what was the earlier program that put New York in its current situation?

Look to a very old government program, rent control, which New York has suffered under since World War II. 

Rent control protects current renters from rate hikes and the like, sure. But it discourages the production as well as the maintenance of rental properties, which in turn limits supply and ultimately hikes rents for future tenants.

Perhaps even worse, it incentivizes the landlords to boot out tenants while it more than nudges tenants to dig in . . .  even when moving would otherwise make more sense. 

The market thus thwarted, the de Blasios then set up more laws and more policing . . . and antagonism ramps up another notch.

This is Common Sense. I’m Paul Jacob.

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tenement, rent control, New York, deBlasio

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San Francisco Obstructionism

San Francisco, homeless, zoning, housing, regulations

Bob Tillman wants to build a 75-unit apartment building in San Francisco.

He owns the property — a laundromat. He just wants to convert it. But although there are no good reasons why he shouldn’t, city officials and activists opposed to the property rights of developers have been blocking the project. Tillman has spent years and hundreds of thousands of dollars just trying to get started.

His plight “encapsulates the political dysfunction that’s turning San Francisco . . . into an exclusive playground for the ultra-wealthy,” says Reason magazine.

Because of the government’s general antagonism to development, and specific policies such as rent control, much less housing is getting built in the city than would have been possible in a fully free market.

The population is growing quickly, but housing isn’t keeping up. Which results in unnecessarily high rents and housing prices.

None of this is shocking if you understand basic economics. The greater the supply of a good, the cheaper the price tends to be — all other things being equal. That qualification is important. If the supply of oranges doubles but everybody suddenly starts an all-orange-juice diet, orange prices may remain the same or even rise — but less than the price would have risen without the greater supply.

Many factors, including monetary factors, can affect the price of a good. All I’m saying is that if you want the benefits of more housing, including rents that are lower than they would have been without the new housing, you must build houses and apartment complexes.

Stop something from being built and, unfortunately, it won’t be there.

This is Common Sense. I’m Paul Jacob.

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San Francisco, homeless, zoning, housing, regulations
Photo by Mussi Katz

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free trade & free markets ideological culture Popular

Creeping Bernie-ism

Bernie Sanders, Walmart, Tucker Carlson, socialism

If you have been watching Tucker Carlson, recently, on Fox or in his bizarre interview with Ben Shapiro, you might have noticed something peculiar: the conservative newsman-commentator sometimes sounds awfully similar to Bernie Sanders.

Both think that if some of Amazon’s and Walmart’s employees are not paid “enough” to live without government assistance, that means the companies are being subsidized by taxpayers. 

Ryan Bourne finds this odd, too, judging it “peculiar” to suggest that, “when setting wages, a company employing low-skilled workers should ignore the value of the tasks the employee actually undertakes for them.”

It’s almost as if these guys haven’t thought it through.

“If Sanders is right that programs such as food stamps modestly subsidize employers who pay low wages,” Bourne argues, “then his hugely expensive Medicare-for-all and free-college-tuition proposals would constitute a massive subsidy to low-wage employers.”

Similarly, when Donald Trump and his allied Republicans push for what we used to call “workfare” requirements, that would mean that the jobs the recipients get also constitute subsidies.

Both Carlson and Sanders apparently assume that companies pay workers according to the needs of the workers determined by subsistence levels — presumably by the old Marxian Iron Law of Wages — and not according to their competitive productivity. That is, what they are worth.

As is common with demagogues, Sanders and Carlson both blame the only companies that are at least paying low-skilled workers something, rather than all those other companies and potential benefactors who aren’t paying them at all.

This is Common Sense. I’m Paul Jacob.

 

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free trade & free markets national politics & policies Popular too much government

Christmas Is Coming

Trump, Santa, NAFTA, trade

When I was a kid, every December day was like a rocket-launch countdown ’til Christmas.

Republicans in the House of Representatives have fewer days to tick off: the days remaining to do something before Democrats take over. Days left in session? Eight.

We know what Trump wants them to do: pass his negotiated replacement for the North American Free Trade Agreement (NAFTA).

Last week, “Trump held a high-profile signing ceremony with Canadian Prime Minister Justin Trudeau and Mexican President Enrique Peña Nieto at the G-20 summit in Argentina,” Eric Boehm writes at Reason. “The leaders of the three countries put their signatures to the final version of the United States–Mexico–Canada Agreement (USMCA), but the deal must still be ratified by each domestic government.”

And some in the Republican House are uneasy, because they “disagree with the Trump administration on trade issues and correctly see the USMCA as moving North America further from free trade.”

Though Donald Trump has given us some reason to think he might have multilateral free trade in mind as his real goal, the current state of the USMCA does not bolster that.

But it could be worse — the Democrats could scuttle the rewrite, just to spite Trump. This would allow Trump to go “nuclear” and withdraw from NAFTA unilaterally without a replacement.

“This would be disastrous for the American economy,” Senator Pat Toomey (R-Pa.) says, “and would kick off a constitutional battle between the branches over trade power.”

That sounds like a lump of coal for Christmas. But I wonder: can a constitutional battle be all bad if it raises awareness of . . . the Constitution?

This is Common Sense. I’m Paul Jacob.

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free trade & free markets judiciary

The Cheese Stands “Unprotected”

Witte WievenKaas, cheese, copyright, law

Governments tempt us — with special privileges and advantages. 

You know what also tempts us?

Cheese.

Cheese? Yes. In the Netherlands, cheese is a big deal, as Baylen Linnekin relates in “Cheese Fight Ends With Court Declaring Producers Can’t Copyright Taste,” over at Reason — where I go for all my cheese-related coverage. (Don’t you?)

The tale is about two cheese companies and the European Union’s “Directive 2001/29/EC,” which tries to reconcile copyrights among member states. Specifically, it involves the legal fight between “two Dutch herbed cream cheese spread makers,” as Mr. Linnekin relates, “Heksenkaas (‘witches’ cheese’) and Witte Wievenkaas (‘wise women’s cheese’).” The former sued the latter for infringing on “its copyright on the taste of Heksenkaas.”

The case went from a Dutch court to the European Court of Justice, where the Court (Grand Chamber) ruled against Heksenkaas. There can be no copyright on “taste.”

This is of no great significance, I suppose, but in a world where the government gets involved in everything, it’s worth noticing when the government resists its temptation to tempt us.

The rationale for non-involvement, in this case, was not a move against intellectual property as such, but against the idea of property involved in subjective taste. “The taste of a food product cannot,” the Court determined, “be pinned down with precision and objectivity. . . .”

Well, sure. But what was really going on here was one company not wanting competition from another company. 

A temptation, for sure. But some temptations (like some cheeses?) must be resisted.

This is Common Sense. I’m Paul Jacob.

 

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free trade & free markets Popular tax policy too much government

Socialists and Capitalism

New York Mayor Bill de Blasio helped snag Amazon for his city. Yes, the long-awaited destination of Amazon’s HQ2 has been determined. Amazon is not putting all its eggs into the Queens borough, though: there’s another headquarters . . . to be placed near Washington, D.C.

The mayor seems quite proud of the deal.

I’ve not been de Blasio’s biggest fan; too often he sounds like a socialist. But this deal? It’s crony capitalism.

So it is with some satisfaction that I can make common cause with a self-professed socialist, newly-elected Congresswoman Alexandria Ocasio-Cortez. Claiming that her Bronx constituency is “outraged” by the Amazon announcement — I doubt that — she expressed her outrage at the “billion-dollar company” receiving “hundreds of millions of dollars in tax breaks.”

Exactly. No company, big or small, should get special treatment from a government.

Want to attract business? Make generally good business policy. Apply liberally, that is, equally.

Alas, the socialist-elect went on to complain that “our subway is crumbling and our communities need MORE investment, not less.”

Well, Amazon is investing in the community, providing jobs.

Then came the busybodyism, demanding to know, “What’s the quality of jobs + how many are promised? Are these jobs low-wage or high wage? Are there benefits? Can people collectively bargain?”

Uh, wages will be high enough to attract workers from their current employment or out of unemployment. And so on.

Socialists feel a need to meddle.

New Yorkers, anyway, can breathe easier knowing they sent Ocasio-Cortez far away, to D.C. — de Blasio as mayor being bad enough.

This is Common Sense. I’m Paul Jacob.

 

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folly free trade & free markets general freedom ideological culture property rights too much government

Big Government Apologetics

fragile, socialism

Journalists play different roles.

Too few report. Too many engage in elaborate apologetics for favored causes.

Like big government.

Take this headline: “Venezuela’s Crisis Is Rooted In Oil Prices — and Authoritarianism.”

Guess: reporting, or bending over backwards to save socialism?

The article’s summary of the decline and fall of Venezuela is accurate insofar as it indicates assaults on liberty, including nationalizations and monetary inflation. But neither “oil prices” nor dependence on oil spawned Venezuela’s crisis.

Every industry, city and nation will experience unfavorable markets, now and then. But what’s fundamental is their “antifragility.” And, news to journalists: socialist societies are fragile in ways that freer societies are not.

Suppose Venezuela had had a free market when oil prices dropped so precipitously. People would then have shifted, however grumpily, into enterprises now more profitable than drilling for and distributing oil.

It is no blunder to specialize, to exploit comparative advantages in knowledge, skills or resources, and to engage in local, regional or international trade. It’s fine even if an economy’s production and exports ends up being dominated by just one good. What matters is whether people are free or burdened by government controls. If the latter, how hard does government make it to cope with changing circumstances?

Unhampered market prices supply the information and incentives needed to adapt to all kinds of changes. But if an economy is chronically distorted and calcified by government controls, it becomes much harder to adapt . . . and much harder to survive.

Today’s journalists routinely adapt facts to story, rather than adjust stories to reality. Guys, give up the ideological apologetics. Go back to reporting.

This is Common Sense. I’m Paul Jacob.

 

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free trade & free markets national politics & policies too much government

More of the Same?

USMCA, NAFTA, Trump, free trade, harbor scene, protectionism, tariffs,

For those who hated NAFTA, and have supported Donald Trump in his complaints about “the very bad deal” that the North American Free Trade Agreement [allegedly] has been, I ask: what was bad about NAFTA that isn’t in Donald Trump’s new version, the United States-Mexico-Canada Agreement?

Actual question. I am not in the least bit interested in gotchas, here. I am willing to celebrate USMCA when (a) I can make sense of it and (b) it proves not just more of the same.

The thing I liked best about NAFTA was that it had “Free Trade” in the title. I like free trade. Trade is good; freedom is good. It is not generally bad to trade with Mexico and Canada — for Mexicans, Canadians, and Americans. I simply have trouble believing that politicians and their aides (along with overly-friendly lobbyists) know better than market competition what the terms of those zillions of deals should be.

But I freely admit, what I didn’t like about NAFTA was that there was more “free trade” in the title than in the agreement itself.

NAFTA was managed trade. 

As far as I can make out, so is USMCA.

Oddly, I just heard two of the three Daily Wire guys* praising USMCA for setting quotas on how much of what can be produced where.

Quotas and mandates and the like are not free trade.

“Managed trade” is just another way of saying “protectionism.” Savvy politicians don’t even like calling it “managed trade.” They call it “fair trade.” 

Free trade is fair enough. Politicians’ “fair trade” isn’t free enough.

This is Common Sense. I’m Paul Jacob.

 

* Andrew Klavan and Michael Knowles, recent podcasts: dailywire.com.

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Illustration: Dutch free traders in Harbor Scene by Abraham Storck  (1644–1708)