Category: free trade & free markets

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free trade & free markets general freedom

Central Banks Losing Control

The rapid rise of interest in and use of “virtual currencies” like Bitcoin has been astounding. It probably won’t surprise you to learn what the established masters of the worlds’ monies say: Bitcoin is disruptive!

Heavens.

Bogdan Ulm, writing on Bitcoin Trader, noticed the concern in Ireland:

“Virtual and digital currencies can challenge the sovereignty of states,” says Gareth Murphy, senior Central Bank of Ireland official. At a recent digital money conference in Dublin, he mentioned that rivals are interfering with a bank’s ability to sway the price of credit for the entire economy. Murphy warned that there might be considerable threat to the finances of a country if increasingly more transactions for services and goods fade away from the tax system due to the use of crypto currencies such as Bitcoin.

Now, it’s worth mentioning that there are many economists — from a long tradition — who have denied the necessity of anyone acquiring the ability to “sway the price of credit for the entire economy.”

Separate bids and offers for credit (loaning money with interest) can be seen as signals of competing evaluations in the economy. There are tremendous forces pushing interest rates to align, and when they do (or don’t), their alignment (or lack thereof) sends important additional information to market participants about both the present and the future.

But when anyone (say, a central bank) presumes to corral all interest rates into a “coherent plan,” much of the useful meaning of signals gets lost, or jumbled, and the economy gets (inadvertently?) programmed for boom and bust.

So, when I hear that modern digital currencies could prevent central banks from “doing their business,” I wonder if, perhaps, this is not a good thing.

This is Common Sense. I’m Paul Jacob.

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free trade & free markets

Now Okay to Walk and Talk in DC

Tourist guides in our nation’s capital now get to talk through what they’re walking through.

DC circuit Judge Janice Brown rules that Washington, DC, wrongly burdens First Amendment rights when it prohibits talking “about points of interest or the history of the city while escorting or guiding a person who paid you to do so — that is, unless you pay the government $200 and pass a 100-question multiple-choice exam.” Until her ruling, the city could jail guides for 90 days and/or fine you up to $300 for daring to walk and talk professionally without going through the hoops of regulation and licensing.

Chastising slovenly argumentation in other courts, Brown observes that the record is “wholly devoid of evidence” supporting bans on the speech of tour guides Tonia Edwards and Bill Main, the stand-up persons who challenged the requirements.

The suit’s prospects may have been enhanced by the freedom-of-speech angle. But although the importance of the First Amendment cannot be overstated, violating it is only one of many ways that governments infringe on our right to engage in peaceful productive activity. The assaults seem endless. Too many people are too unwilling to mind their own business, too eager to interfere with yours. So we must be eternally vigilant.

By “we” I largely mean — with respect to this case and thousands like it — the folks at Institute for Justice, who came to the aid of Edwards and Main, and who incessantly champion the rights of people seeking only to peaceably earn their bread.

This is Common Sense. I’m Paul Jacob.

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free trade & free markets ideological culture

Big Business vs. Big Liberty

“Incumbents Fear Cantor’s Loss Will Fill Tea Party’s Sails” is the headline.

Before a few days ago, GOP establishmentarians felt that they had finally quelled the Tea Party notion that Republicans should be more than 2 to 4 percent different from Democrats on whether the country should suffer a socialist health care industry, endless tsunamis of red ink, etc.

Coca-ColaCertain big businesses also hate Tea-Party-style boat-rocking. In his article “Big Business Vs. Libertarians in the GOP,” David Boaz observes that candidates who plausibly oppose crony capitalism are drawing opposition from firms like Coca Cola, Delta, Georgia Power, and AT&T. These and the Georgia Chamber of Commerce created a “Georgia Coalition for Job Growth” to defeat Republican Charles Gregory and other candidates who are “just too libertarian” for them.

What do these anti-liberty businesses — in Georgia, Kentucky, California and elsewhere — fear? The lower taxes that real-deal Tea Party candidates support?

No.

And it isn’t “gay marriage or foreign policy that seems to annoy big and politically connected businesses,” writes Boaz. Who they oppose are representatives who refuse to “bring home the bacon,” who “actually take seriously the limited government ideas that most Republicans only pay lip service to.”

Don’t be shocked to witness big businesses working against limited government, welcoming regulation and subsidy as a way of life.

Why? Because the “mixed economy” approach (whether mercantilist, “progressive,” fascist, what-have-you) allows them to rig the system in their favor, usually by discouraging competition.

This is Common Sense. I’m Paul Jacob.

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free trade & free markets

The New Space Race

We’re on the verge of being virtually connected to every person in the whole world who has a $200 laptop or a $50 smartphone or better.

Private companies Google and Facebook are funneling capital into satellite networks to bring the Internet to millions now utterly without it. Reporters call their competition a “space race.” Google will spend between one and three billion dollars on 180 small low-earth-orbit satellites. Facebook’s game plan entails higher, geosynchronous orbits.satellites in orbit

Google estimates that “two thirds of the world have no [Internet] access at all. It’s why we’re so focused on new technologies … that [can] bring hundreds of millions more people online….”

Instapundit’s Glenn Reynolds thinks that Google’s satellites will also make governmental spying and censorship harder, a suggestion readers hotly dispute. In any case, major cyber-companies have been paying much more attention to plugging security holes in their systems in the wake of the Snowden revelations.

What’s indisputable is that dramatically more widespread Internet access will enable a great many people who currently lack that access to enjoy radical new means of knowledge and trade.

The Internet abets everything from communication to scholarship to publishing to broadcasting to stock trading to finding new customers and even new loves. This cyber wealth will be enriched by the contributions of the new surfers of the web. We can also expect the satellite technology backed by Google and Facebook to give us both higher Internet speeds and lower Internet costs.

Globalization is good.

This is Common Sense. I’m Paul Jacob.

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free trade & free markets too much government

P2P Jitneys

Virginia state government has banned Web-based/app-based car-ride services Uber and Lyft from operating in the state. After applying heavy fines. After demanding the services follow rules originally devised for taxis and limo and bus services.

It seems tantamount to banning the automobile a century ago because the horse-and-buggy regulations on the books didn’t fit.

Uber and Lyft call what they provide “ride-sharing” services, allowing people with smart-phone and tablet apps to “hail” rides they need, from almost anywhere to almost anywhere. The folks providing the rides have signed up and even taken classes, and both parties rate each other after the transaction. Riders can “steer clear” of low-rated drivers if they want. And drivers can not offer rides to low-rated riders, as well.

It’s quite a service.

I first heard about this idea from economist David Friedman, a generation ago. He called it a “jitney” system, and offered it as an alternative to mass transit systems that are just too capital intensive to make a profit while still servicing diverse needs.

Now, the idea is off to a good start with two excellent services. Technology has allowed for safe, low-transaction-cost contracting between strangers. This sort of person-to-person (P2P) revolution could change everything.

Including government patronage. Or the need for much government regulation. Taxicab services are heavily regulated in most places. The excuse is usually safety and traffic considerations, but let’s be frank: it’s mostly a government power grab. Horning in on territory. Collecting a fee.

Uber and Lyft leverage the capital car-owners invest, and such P2P services are probably the most efficient contracting systems possible. If free market principles should apply to anything, it is jitney services.

So, Virginia, lay off. Free the P2P.

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets national politics & policies

Bypassing McDonald’s to Fly

When a professional academic economist and poverty specialist like Prof. Robert Plotnick defends a radically higher minimum wage law, as has been put in place in SeaTac, Washington, and was just enacted (with elaborate postponement/implementation periods) in Seattle, I raise an eyebrow. What am I missing?

But then I read what he actually said: “People aren’t going to stop flying out of Sea Tac [airport] because it costs a little more to buy a hamburger or a beer,” he says.

No. They won’t.

But that’s irrelevant. With prices higher for fast food, there’s certainly going to be no increase in fast food purchases. People will still go to the airport, but more often avoid the fast food joints, in SeaTac or Seattle.

And, over time, as businesses struggle with reduced revenue, or at least reduced profits, fewer of those businesses will survive. And folks with better qualifications — say, better language skills, better people skills, or a higher work ethic  — will move in to the forced higher-wage area (the $15/hour minimum in both Sea Tac and Seattle is the highest city rate in the nation) and will replace less skilled workers.

Increasing poverty, not decreasing it: stultifying progress, both personal and in general.

Already the horror stories are piling up: check out the stories in the Seattle Times. (See economist David Henderson’s discussion on EconLog.)

One of the problems was inadvertently suggested by our president, who recently intoned, “Let’s declare that in the wealthiest nation on Earth, no one who works full-time should have to live in poverty.”

Great. We’ll have fewer low-income workers working full time.

This is Common Sense. I’m Paul Jacob.