Friday, September 15, 2017

Hayek and the Security of a Social Safety Net


The ABA’s main function is no doubt as an interest group.  This has been obvious for decades.  Yet the ABA remains as a government created monopoly on lawyers.  Give me a break
“In recent decades the ABA has repeatedly departed from its proper, politically neutral task of promoting the rule of law and the sound administration of justice and taken partisan stances on controversial political issues. Of course, a private organization may do this, but then it should not be treated as an apolitical representative of the entire legal profession entitled to quasi-governmental status. It is time to treat the ABA as an interest group like any other.”
Hornberger makes the important point:
“While it’s easy for many Americans to recognize tyranny when it is committed by foreign regimes, it is much more difficult for them to recognize tyranny when it is committed by their own government. But tyranny is tyranny, whether it involves punishing people for booze or drugs and regardless of the particular regime that is doing the punishing.”
Iran bans the production, sale and use of alcohol prohibition.   Seems ludicrous to us, but we did it during Prohibition, AND we currently prohibit other drugs.  We have even waged our War on Drugs for decades.  Both Iran and the U.S impose government tyranny in restricting individual freedom to consume alcohol/drugs. We can go further and debate the other costs and benefits of legalizing these vices.  But regardless, legalizing drugs is the only moral path in keeping with our individual rights.  Anything less is tyranny.


Scary stuff here:
Sure, we may have no sympathy for this particular issue. However, the precedent is set and they can do this to you for taxes. The government can claim you have an account in Bangladesh and you say you do not. The judge then throws you in prison for life until you tell them the location of something that may not even exist. They need not prove anything anymore, they rely on the judge claiming he has inherent power to effectively kill you. What next – off with your head?”

AV à An excellent quote from Hayek in The Road to Serfdom:

Thus, the more we try to provide full security by interfering with the market system, the greater the insecurity becomes; and, what is worse, the greater becomes the contrast between the security of those to whom it is granted as a privilege and the ever-increasing insecurity of the under-privileged And the more security becomes a privilege, and the greater the danger to those excluded from it, the higher will security be prized. As the number of the privileged increases and the difference between their security and the insecurity of the others increases, a completely new set of social values gradually arises. It is no longer independence but security which gives rank and status, the certain right to a pension more than confidence in his making good which makes a young man eligible for marriage, while insecurity becomes the dreaded state of the pariah in which those who in their youth have been refused admission to the haven of a salaried position remain for life.”

Allow me to explain a bit.  One major assumption Hayek makes in this quote is that security (in wages, occupation etc) cannot exist for everyone at all times.  This is tantamount to socialism, which cannot work for a plethora of reasons of which I will not explain here – other than what follows.  The crucial lapse ensuring the failure of socialism is that, absent free markets, no one can know what the price of goods/services should be in order to use resources to help the most people.

It is helpful to think of this quote from Hayek in terms of an economic pie with two pieces – 1) those with security and 2) those without security (in job, wages, income, and lifestyle.)  When we guarantee the income of some, the pie, by definition, becomes proportionately fixed in size.  We limit creative destruction in this segment/area of the economy and we reduce the number of entrepreneurs.   (By contrast, in an economy in which nobody has absolute security, everybody must become an entrepreneur in the sense of always positioning him or herself to provide the most value to the most people.)    Furthermore, the current portion of the pie taken by people with security leaves behind a relatively smaller piece of the pie with which others without security can possibly find jobs, income and added value opportunities. 

The point of Hayek’s quote is that this division between the secure and the un-secure will continue to create divisions in society.  The divisions will yield power to politicians who give security to more groups.  The irony is by giving these groups more security we limit opportunities for others within the existing economy.  And we limit the future growth of the economy. 

This phenomenon most certainly becomes a death spiral, and is impetus almost always comes from government.  This spiral ultimately must end in a revolution.  We are yet to see the revolution but I venture to say it won’t be pretty.  Perhaps this is one meaning of Hayek’s brilliant phrase, “The Road to Serfdom.”


Don Boudreaux’s excellent quote of the day from James Mill’s Elements of Political Economy:
 “The benefit which is derived from exchanging one commodity for another, arises, in all cases, from the commodity received, not from the commodity given.  When one country exchanges, in other words, when one country traffics with another, the whole of its advantage consists in the commodities imported.  It benefits by the importation, and by nothing else.”

And yet the moron in the White House wants to stop China from giving us free stuff on grounds of dumping.  I feel like I am living in a time in which we cannot see the most obvious of points.  Imports are good.  We have a trade deficit, precisely a good thing.  People send us a lot of stuff to use and enjoy.



Civil asset forfeiture is absolutely, positively 100% not acceptable.  This is inhumane.  This is unconstitutional.  This is evil.  This cannot be allowed to continue.  Props to the guy who filmed this video and raised tens of thousands of dollars for the hot dog vendor.  I hope this officer is fired immediately. 

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