James Buchanan and a non-discriminatory democracy?
17 Jun 2014 Leave a comment
in constitutional political economy, F.A. Hayek, James Buchanan, liberalism Tags: non-discriminatory democracy, rule of law, veil of ignorance
Under Buchanan’s generality norm, governments impose uniform regulation and use flat rate taxes on uniform tax bases to fund an equal-per-head demogrant (or a guaranteed minimum income) to replace all existing government cash transfers. Such a government would account for a large share of GDP. That did not bother him:
It seems to me that far too much of our politics is favourable treatment or unfavourable treatment for particularised groups. If we could somehow introduce into politics the requirement that would be analogous to the rule of law, that is, don’t treat one group differently from another group.
That has a lot of implications. That would not necessarily mean we’d have much smaller politics or government. It would mean there’d be a quite different characteristic of government…
The normative thrust of my current work is to try to push the generalization principle to the maximum extent possible, that is, so you don’t have particularised exemptions. One person gets it, everybody gets it. It cuts in favour of something like a flat tax. It cuts against means testing.
Buchanan has said that all successful welfare states (such as Sweden) apply a generality norm in some form or another.
For Buchanan, the very logic of majority rule implies unequal treatment or discrimination. If left unconstrained, majority coalitions will promote the interests of their own members at the expense of others.
Buchanan proposed a non-discriminatory democracy through the principle of generality:
- If extended to any single industry, tariff or quota protection also be extended and on equal terms to all industries.
- Tax structures would necessarily become simple, since the same tax rate would have to apply across-the-board on all sources or uses of tax base. Flat rate or proportional taxes on all incomes would broadly meet the generality norm.
- On the transfer side of the budget account, payments would have to be made in demogrants, equally available to all persons.
This is equivalent to Rawls’ veil of ignorance: choices must be without knowing where you lie in society so you make choices that are to the benefit of all.
Buchanan argued that if politics generates undesirable results, it is better to examine the rules than to argue about different policies or to elect different representatives. He build on Hayek who called a constitutional amendment that should read:
Congress shall make no law authorizing government to take any discriminatory measures of coercion.
Hayek went on say that, with such an amendment, all of the other rights would be unnecessary. In a non-discriminatory democracy, government choices are limited to those that benefit all.
If I Gave a High School Graduation Speech | Arnold Kling
13 Jun 2014 Leave a comment
in liberalism Tags: Arnold kling, The Great Fcat
I am going to talk about community service…and why I am against it…
If you judge people by how their life’s work contributed to better lives for people and less poverty in the world, then I will gladly stack up the Henry Fords and Thomas Edison’s against the Mother Theresa’s. Collectively, the capitalists and entrepreneurs have a much better claim on our gratitude than do the icons of community service.
What would you rather have in your community? Would you rather have the Wal-mart that hires the workers that other businesses cannot use and for whom politicians can offer no assistance–people with little education or training, including people with disabilities? Or would you rather have the “activists” who fight to keep out Wal-Mart or who insist that they should dictate Wal-Mart’s labour policies?
Murray Rothbard and the Bourbon Democrats
13 Jun 2014 Leave a comment
in liberalism, libertarianism, Murray Rothbard, Public Choice Tags: Bourbon Democrats, Third party sytem
The American political system is complicated with the Republicans and Democrats moving around the political spectrum. Remember, Teddy Roosevelt’s Progressive Party, with its rather left wing agenda split from the Republicans, not from the Democrats in 1912.
Murray Rothbard saw a lot of anti-big government sentiments in the pre-1896 Democratic Party under the Third Party System, and especially in the Second Party System prior to the Civil War with Andrew Jackson and Martin Van Buren. The 19th century Democratic Party tended to be the party of peace, anti-militarism, and anti-imperialism. Rothbard referred to Grover Cleveland
The Third Party System was dominated by the newly created Republican Party, which supported national banks, railroads, high tariffs, homesteading rights and aid to the land-grant colleges.
The Fourth Party System from 1896 to 1932 was made up of a majority centrist Republican Party against a minority Democratic Party from the South together with urban Catholics in the Northern cities – a volatile brew – which soon had an ideology scarcely distinguishable from the Republicans.
Both parties under the Third party System that operated prior to 1896 comprised broad-based voting coalitions divided between the parties on racial, ethnic and religious lines with high voter turnout and strong partisanship.
- Methodists, Congregationalists, Presbyterians, and Scandinavian Lutherans were closely linked to the Republican Party.
- Catholics, Episcopalians, and German Lutherans, looked to the Democratic Party for protection from moralism and prohibition.
- The Democrats gained more support from the lower classes than did the Republicans.
Bourbon Democrat was a term used in the US from 1876 to 1904 for members of the Democratic Party, conservative or classical liberal, and especially those who supported President Grover Cleveland in 1884–1888 and 1892–1896. Rothbard referred to Grover Cleveland as “a hard-money laissez-faire Democrat” and
the continuity of quasi-libertarian thought that the Democrat Party brought to the United States throughout the nineteenth century
The Bourbon Democrats represented business interests, generally supporting the goals of banking and railroads but opposed to subsidies for them and were unwilling to protect them from competition.
Bourbon Democrats were promoters of laissez-faire capitalism (which included opposition to the protectionism that the Republicans advocated). The Bourbon Democrats opposed imperialism and U.S. overseas expansion, fought for the gold standard, and opposed bimetallism.
The notion that the Democratic Party was once the home of classical liberals in the USA at one time and the Republican Party was the party of regulation and big government is so foreign to the modern party divides in the USA today. Political parties in the United States certainly are big tents as they say.
Good monopolies and bad price cuts
10 Jun 2014 Leave a comment
in industrial organisation, liberalism Tags: monopoly, progressivism
A surprising number of well-meaning people want to protect consumers from the scourge of lower prices. These abominations come from imports, new entry or cost reductions.
Richard Epstein talked about how progressives think they can tell the difference between a good monopoly and a bad monopoly.
There is one instance in which monopoly could arise in the free market – exclusive ownership of an essential input (Kirzner 1973):
Monopoly … in a market free of government obstacles to entry, means for us the position of a producer whose exclusive control over necessary inputs blocks competitive entry into the production of his product.
Monopoly thus does not refer to the position of a producer who, without any control over resources, happens to be the only producer of a particular product. This producer is fully subject to the competitive market process, since other entrepreneurs are entirely free to compete with him.
In all other cases, monopoly is the grant by government of an exclusive privilege to produce or sell a product (Rothbard 1962). This definition is from the common law as per Lord Coke:
A monopoly is an institution or allowance by the king, by his grant, commission, or otherwise . . . to any person or persons, bodies politic or corporate, for the sole buying, selling, making, working, or using of anything, whereby any person or persons, bodies politic or corporate, are sought to be restrained of any freedom or liberty that they had before, or hindered in their lawful trade.
All Men Are Created Equal – To Kill a Mockingbird
08 Jun 2014 Leave a comment
My High School Class read the book. One of the greatest books ever.
John Stuart Mill and dissent and the value of criticism
06 Jun 2014 Leave a comment
in liberalism Tags: critical discussion, growth of knowledge, John Stuart Mill
The Devil’s Dictionary – definition of a cynic
24 May 2014 Leave a comment
in applied price theory, liberalism Tags: Devil's dictionary
A blackguard whose faulty vision sees things as they are, not as they ought to be. Hence the custom among the Scythians of plucking out a cynic’s eyes to improve his vision.
Super-Economy “pre-reviewed ” Piketty in 2010
14 May 2014 Leave a comment
in applied welfare economics, entrepreneurship, labour economics, liberalism, politics - USA, technological progress Tags: Piketty, poverty versus inequality
The French are poorer that the 3rd poorest American state: Arkansas. The EU-15 as a whole would qualify to be the 49th poorest American state.
The rich in Europe are poor by American standards. The poor in the USA are middle class by European standards. The European middle class has smaller houses, few cars and few consumers durables that the average poor in the USA.
via Super-Economy: Dynamic America, Poor Europe and Tino Sanandaji
Richard Epstein “The Coming Meltdown in Labor Relations”
07 May 2014 Leave a comment
in industrial organisation, labour economics, law and economics, liberalism, personnel economics, Public Choice, Richard Epstein
Why Does 1% of History Have 99% of the Wealth? | Learn Liberty – YouTube
04 May 2014 Leave a comment
in constitutional political economy, development economics, entrepreneurship, liberalism, market efficiency, technological progress Tags: Deirdre McCloskey, industrial revolution, Rise of the Western World, rule of law, The Bourgeois Virtues, The Great Fact
Throughout the history of the world, the average person on earth has been extremely poor: subsisting on the modern equivalent of $3 per day.
This was true until 1800, at which point average wages—and standards of living—began to rise dramatically.
Prof. Deirdre McCloskey explains how this tremendous increase in wealth came about.
In the past 30 years alone, the number of people in the world living on less than $3 per day has been halved.
The cause of the economic growth we have witnessed in the past 200 years may surprise you.
It’s not exploitation, or investment. Innovation—new ideas, new inventions, materials, machinery, organizational structures—has fueled this economic boom.
Prof. McCloskey explains how changes in Holland and England in the 1600s and 1700s opened the door for innovation to take off—starting the growth that continues to benefit us today.
via Why Does 1% of History Have 99% of the Wealth? | Learn Liberty – YouTube.
Richard Epstein: Income, Wealth and Inequality. Leveling Up or Leveling Down?
02 May 2014 Leave a comment
in applied welfare economics, law and economics, liberalism
The Great Liberator – Larry Summer’s Obituary for Milton Friedman
30 Apr 2014 Leave a comment
in economics, liberalism, Milton Friedman
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