The Question Nobody Has Asked
Here's a question that the pundits haven't asked: Is Sarah Palin qualified to preside over the United States Senate? After all, that is the only job function of the vice-presidency specified in the Constitution. Yet Palin friends and foes alike obsess over her "qualifications" for the presidency -- an office she's not actually running for. Sure, a vice president may succeed to the presidency due to the latter's death, resignation or removal, but in 56 U.S. presidential elections, only nine winners did not complete their four-year term. That's one-in-seven or less than 15%. (And consider several presidents died of injuries or illnesses that are treatable by modern medicine.)
The vice president's ex officio role as president of the Senate has largely been forgotten. Aside from breaking the occasional tie vote (Dick Cheney has cast eight such votes in seven-plus years), nobody actually expects the vice president to fulfill his or her constitutional duties anymore. This is consistent with the general apathy exhibited towards the Constitution's text, particularly among the political class.
On September 7, 1787, the delegates to the Philadelphia convention debated whether it was wise to have the vice president serve as head of the Senate. Elbridge Gerry and George Mason, two of the three delegates who refused to sign the final Constitution, objected the co-mingling of the executive and legislative branches. In James Madison's account of the debate, Gerry argued, "We might as well put the President himself at the head of the Legislature. The close intimacy that must subsist between the President & vice-president makes it absolutely improper." In rebuttal, Connecticut's Roger Sherman said that without the Senate duties, the vice president "would be without employment."
Obviously, the Framers failed to anticipate Dick Cheney, who managed to create the first "Imperial Vice Presidency" by exploiting the second office's constitutional vagueness -- neither an executive nor legislative officer he be. To John McCain's credit, he's rejected Cheney's example by selecting Mrs. Palin, who will likely follow the modern vice-presidential model pioneered by Richard Nixon in the 1950s: A partisan cheerleader who allows the president to appear "above the fray" within the high altar of the Imperial Presidency.
But even the Nixon model raises an interesting question: Why is there an Office of Vice President at all? There's little compelling reason for the taxpayers to spend over $200,000 in salary and several million dollars more on staff, housing and transportation for a person who does little more then serve as an emergency backup. As I documented a few months ago, there have been 18 periods in U.S. history -- several lasting nearly a full four-year term -- where the vice presidency has been vacant. The Republic survived. The Senate learned to run itself without the vice president sitting on the dais. So why continue to support a mini-bureaucracy dedicated to . . . an unspecified function?
The Last and the First
The rich people who are successful businessmen and entrepreneurs are last on this earth, because they have created and are continuing to create much value for the consumers, while themselves refraining from spending all of their cash. They are humble servants of the public, but they themselves do not avail themselves of the fruits of social cooperation to the greatest possible extent, e.g., by dying broke. One can't eat dollar bills. As long as they don't spend, their money goes to finance productive activities, pay wages, and create goods for the consumers, which the businessmen themselves do not bid away from the less prosperous, thereby keeping prices low. As Mises judges, "the clerks and workers who boast of their moral superiority deceive themselves and find consolation in this self-deception. They do not admit that they have been tried and found wanting by their fellow citizens, the consumers." (Human Action, 314)
And as Jesus said, "the last will be first, and the first will be last." (Mt 12:16) Those who have served their fellow man by taking an active part in building a civilization while themselves being at least somewhat ascetic should be glorified here and will for sure be glorified in the hereafter.
It may be true that "it is easier for a camel to go through the eye of a needle than for a rich man to enter the kingdom of God." (Mt 19:24) But the same is true for smart people, gifted people, great artists, political leaders, etc. As Aquinas writes, "Science and anything else conducive to greatness, is to man an occasion of self-confidence, so that he does not wholly surrender himself to God. The result is that such like things sometimes occasion a hindrance to devotion; while in simple souls and women devotion abounds by repressing pride. If, however, a man perfectly submits to God his science or any other perfection, by this very fact his devotion is increased." (ST, II-II, 82, 3, ad 3)
Entrepreneurial foresight and cunning are perfections; insofar as a person who has become rich has not spent all the profits of his company on himself but, for example, plowed them back into other businesses and finally contributed to philanthropic causes, he has not received his reward in full and is due for a reward from the Father (Mt 6:2).
But we free and feed the world!
The Palin speech seems to have unleashed a wave of belligerent nationalism and frenzy on the right. Andrew C. McCarthy at National Review posts that Palin allows us to be proud again that "we free and feed the world..."
So I just checked the latest US Department of Agriculture's "World Agricultural Production" flyer put out by the Foreign Agricultural Service. It turns out that the US is responsible for about 10% of world crop production, and this is exceeded by China and India -- which isn't exactly feeding the world.
But, on the other hand, surely their regulations on agricultural production were exported by the US. Also we do lead the world in reports on world agriculture production.
Good Money, reviewed by Tabarrok
Alex Tabarrok reviews George Selgin's Good Money:
Good Money is George Selgin's explanation of how enterprising button makers solved what Sargent and Velde called The Big Problem of Small Change thereby making the industrial revolution possible. Selgin is a monetary theorist so you might expect a dry account of monetary history but the mint-battle between Matthew Boulton, whom Wired once named the ultimate CEO, and copper-king Thomas Williams propels the story forward. If you can imagine, Good Money is something of a cross between Friedman and Schwartz's A Monetary History of the United States (although not as broad in scope) and a business epic like Barbarians at the Gate. I also liked how Selgin draws on newspapers, novels, limericks and tavern songs to illustrate the problems and events of the time. This bard was both a good economist (he has Gresham's Law!) and public choice scholar....
The money problem influenced and was influenced by all of the major events of the day so Good Money is also an economic and political history of the industrial revolution. Here's an interesting tidbit. Company stores were not so much a way for firms to rip off employees (why not just pay them less?) but were rather a means of economizing on coin. Selgin shows how the shortage of coin sheds light on a number of other otherwise peculiar business practices.
What lessons can be drawn from the history of private coinage? Private money circulated only if it was voluntarily accepted as a means payment. Thus the primary problem faced by private firms was how to create trust and credibility. To encourage circulation, for example, issuers promised to redeem their tokens in gold (which the Royal Mint did not). In turn, the promise to redeem gave producers an incentive to make their coins difficult to counterfeit, which they did by making the coins beautiful - numismatists will appreciate the full-color illustrations of the private coinage produced by Boulton and his rivals - as well as technologically advanced.
Palin's Intellectual Bipolar Disorder
I just watched this clip of Sarah Palin from the Republican convention last night. I just don't get how people can cheer and cheer over such obviously conflicting ideas.
One the one hand, she assails Obama as favoring big government, more taxes, more control from Washington, and everyone goes nuts denouncing government. Then only a few sentences later, she is blasting Obama for not favoring war enough, for wanting to give people too many rights, for not wanting military victory over the entire planet. People cheer that too.
Do these people not realize that the same government that controls from Washington is also the institution that she is proposing have a world empire? Do these people not realize that global military occupation costs money that comes out of the pockets of American citizens? Do they not realize that a government that cares nothing about the rights of foreigners is not going to have much respect for the rights of its citizens either?
I know it's an old problem, and nothing has changed since the Cold War days, but the intellectual bipolar disorder of the conservative mainstream is still very difficult to comprehend. It's no wonder that smart people conclude, even from watching this one clip, that the whole thing is a racket.
More Awful Truths About Republicans
Four years ago we observed that the so-called "Republican philosophy" of small government, sound money, and balanced budgets was illusory in terms of the history and then-current policies of the Republican Party. However, even we would never have guessed how awful the Republican Party economic policy would become. From mere mercantilism, the Republican Party is now flirting with comprehensive socialist economic policy and another Great Depression. FULL ARTICLE
IP Converts -- Authors and Google
On the Sept. 3, 2008 show of Free Talk Live, the excellent libertarian radio program, there was an interesting discussion with a caller who is an author and has changed his mind about IP--he realized that by giving online versions of his book away on Amazon, he can sell more copies of it.
The recorded show is here; the IP discussion starts at the beginning, with the first caller, and lasts for a few minutes.
In other news, Google's new Chrome browser "is based on the open-source WebKit architecture, and Google claims that its code will be open source, so it's unlikely that the company is trying to corner the market on browser functionality, since innovations are eminently copyable." I.e., Google's not trying to lock Chrome's code down with copyright. It's not afraid of competition.
Ok, I've completely owned by Google
Having now played around with Chrome, I was disappointed that in using it I would lose my Firefox feeds on the toolbar. But I'm so wild for this browser that I looked for a workaround and found the Google Reader.
I know, I know, it's embarrassing that I haven't been using this. In a matter of minutes, I've added 50 sites/blogs/forums to the reader, including many on Mises.org I otherwise couldn't keep up with. Now I feel like I'm on top of all things in all areas of life--an illusion to be sure, but one I like.
Ok, if you are so geeky as to know all this already, please move on. But for those of you are not yet using the Reader, consider it. It allows amazing levels of sharing, emailing, tagging, sorting, and many other things. It's the best I've seen.
So it's settled: I'm owned by Google.
And by the way, all of this is available through one interface if you have a Mises.com email account. To get one, post on the forum and get involved. Then drop me an email confirming this fact and you will be the proud owner.
The Calamity of Bush's Conservatism
Conservatism as we once knew it is hopelessly corrupted.
Conservatism has come to be identified with endless war, government expansion, violations of every human right and liberty. You can detect it at cocktail parties, where self-identified conservatives sneer at the very idea of liberty.
Clearly, in the age of Bush, conservatism now constitutes as great or even greater a threat to American liberty than the Left and left-liberalism. It is long past time for every right-thinking American to reject the term conservative as a self-description.
Review of Google Chrome
Google Chrome is a very impressive release, and I find myself already using it. It strikes the user immediately that this is surely the browser of the future. It seems to rethink the weight and conventional operation of the web browser. It is light as air and fun to use.
It's not a fair criticism but I do miss my Firefox plugins--I supposed that addons are coming--and the all-important Firefox toolbar feeds, which is the way I browse the web. On the other hand, the phenomenal speed of Chrome makes browsing much less of a chore.
One very real problem I've noted though. It does not respond to the fast-view settings of PDF files. It waits for the entire document to load before it displays. This is an annoyance for those who use large PDF files.
In any case, Mises.org looks great on Chrome.
Copyright and Cambridge U. Press
I noted previously that my Against Intellectual Property and Boldrin & Levine's Against Intellectual Monopoly are both selling just fine, even though both books are available for free online. Now it's no surprise the Mises Institute publishes works in free, online versions whenever possible; it doesn't hurt sales and anyway, their mission is to spread the freedom philosophy and sound economics.
But I was a bit surprised that Boldrin & Levine's publisher, Cambridge University Press, would allow them to put a free version of the book online; my experience with Oxford University Press (1, 2, 3, 4) would have led me to suspect publishers would be reluctant to permit this.
But as explained in the commments here, although they were not able to prevent the work from being protected by traditional copyright, the authors were able to persuade Cambridge to permit a free online version. Heroic! (The carping of some that they were "hypocritical" because the book has a copyright is ridiculous.)
Continue reading "Copyright and Cambridge U. Press" »
Mises University 2008
What an enthusiastic, smart, and committed bunch of students we had this summer at the Mises University. The faculty agrees. This was an exceptional year. What encouragement it is to see so many young people taking up the cause of the free economy. We've become used to receiving more qualified applications than we can accept. But we were stunned by the flood this year. Twice as many top young people could have been let in, if we'd had room.
She actually considered breaking up the union: thought crime
Alaska only became a state in 1959, but somehow we are supposed to believe that it is part of the enternal natural law that it should always and everywhere be part of the union, and any thought to the contrary--the mere thought!--is grounds for permanent exclusion from public office.
Such is the implication behind the completely bizarre claim that Sarah Palin's involvement with the Alaskan secession movement amounts to a disastrous revelation for the McCain camp.
Why precisely this is such a horrid thought is never explained. Alaska would surely be better off, and does anyone in the other 49 states really believe that some calamity would befall the U.S. if Alaska became independent? It's nuts. Separating off territories from a mother country is at the very core of U.S. history and its founding, and we really saw many examples of peaceful secession in the old Soviet Union.
But somehow in the U.S., the very idea that the existing configuration of the nation state should ever be diminished by a single inch is a great taboo. And why? Because the media tell us so.
This book on secession clearly needs broader circulation.
What Belongs to Caesar?
Despite the title of the book, write Mark R. Crovelli, Archbishop Chaput leaves the reader without any argument as to why the state has a right to rule over us, why we have a moral obligation to submit to such domination, or why the state possesses the moral authority to extract money from us at the point of a gun. Put in even simpler terms, Archbishop Chaput offers no compelling arguments against those of us who happen to be, in Jerome Tuccille's words, "sane, moderate, middle-of-the-road anarchist[s]." FULL ARTICLE
Broadband uptake in the developed world
For those of you interested in network infrastructure, I recently discussed the faulty comparisons involved in nation-state broadband penetration. In particular, it focuses on Korea and Japan. My conclusion: the US does not need another CTO.
Sarah Palin's Career Ends in Tragedy
When a decent person accepts a job such as vice president, our first instinct is to celebrate that good people are in a position of power and influence. This is what McCain is counting on. But this is an illusion. The influence runs completely the other way. Good people become part of the party machine and surrender all their principles in order to survive. This, sadly, is the future of Sarah Palin, who may have been doing some good in Alaska. FULL ARTICLE
Broken Windows and Gustav
It's already begun!
Economists agree that in the long run, a major hurricane or other natural disaster can actually help lift economic activity because of insurance payments and federal assistance...
Labor Day and Freedom
It isn't clear that Labor Day is worth celebrating. According to the US Department of Labor, Labor Day "is a creation of the labor movement and is dedicated to the social and economic achievements of American workers." It is also a holiday that is largely grounded in fiction. Part of the traditional narrative of the labor movement is encapsulated in this passage from the US Department of Labor's website: "The vital force of labor added materially to the highest standard of living and the greatest production the world has ever known and has brought us closer to the realization of our traditional ideals ..." FULL ARTICLE
The Not-So-Imperial Vice Presidency
Rick Brookheiser of National Review presents a succinct argument against presumptive Republican vice-presidential nominee Sarah Heath Palin: "Either [John] McCain thinks the war on terror isn't serious, or he thinks the vice-presidency isn't. Since the former is obviously untrue, it must be the latter."
Brookheiser seems to be in the minority among Republicans, however; Mrs. Palin, the incumbent governor of Alaska, has sparked an enthusiastic reply from the party's Bush-demoralized base. There's definitely a disconnect between popular and elite opinion. I read an online chat with a political reporter from one of the Alaska newspapers who complained, bitterly, that while Governor Palin was popular with voters, she was widely disliked by legislators and statehouse media. Similarly, there's been much groaning from the national media and political elite about a woman who once served as a mayor of Wasilla, Alaska (current population, 8,741).
Glenn Harlan Reynolds, a pillar of the new establishment media, wrote, "The most important thing about a Vice Presidential candidate -- as with a Presidential candidate -- is fitness to be President." Andrew Sullivan added that this was a "truism." Yet history has shown quite the opposite. Despite changes in how vice presidents are nominated since John Adams finished second to George Washington in 1788, the real truism is that the vice presidency if first, second and always a political Tchotchke - a trinket used to address intra-party division.
Continue reading "The Not-So-Imperial Vice Presidency" »
Barack Obama and Sarah Palin on Taxing Oil Companies and Giving the Money to Others
From the website of Barack Obama:
• Immediately Provide Emergency Energy Rebate. Barack Obama will require oil companies to take a reasonable share of their record‐breaking windfall profits and use it to provide direct relief worth $500 for an individual and $1,000 for a married couple. The relief would be delivered as quickly as possible to help families cope with the rising price of gasoline, food and other necessities. The rebates would be fully paid for with five years of a windfall profits tax on record oil company profits. This relief would be a down payment on Obama's long‐term plan to provide middle‐class families with at least $1,000 per year in permanent tax relief. The Obama energy rebates will: offset the entire increase in gas prices for a working family over the next four months; or pay for the entire increase in winter heating bills for a typical family in a cold‐weather state.
From "Sarah Palin, an Outsider Who Charms" (The New York Times, August 30, 2008):
One of her most significant accomplishments as governor was passing a major tax increase on state oil production, angering oil companies but raising billions of dollars in new revenue. She said the oil companies had previously bribed legislators to keep the taxes low. She subsequently championed legislation that would give some of that money back to Alaskans: Soon, every Alaskan will receive a $1,200 check.
Comment by George Reisman: On this fundamental issue, not just of oil and energy, but, wider, of morality and economics in general, there is no difference in principle between these two. Both advocate legalized theft, in the expectation of doing good.
Obama thinks he can do good to the oil companies' customers by depriving the oil companies of the means to expand production, which expansion they would quickly undertake and achieve if not prevented year after year by his leftist, environmentalist cronies in Congress and the courts. It is that gang of cronies that is responsible for the high price of oil and, indirectly, for the very high profits of the oil companies. The more they restrict the supply of oil, and of competing forms of energy, such as atomic power, the higher they drive its price and thus the profits of its producers. Whoever is unhappy about the high price of oil and oil products should blame the leftist/environmentalist bloc in Congress and in the courts, and the environmental movement behind it. These are the parties actually responsible.
Obama also fails to see another major aspect of the absurdity of his proposal. Namely, that more money placed in the hands of poor buyers of gasoline and heating oil will serve simply to drive the prices of the limited supplies of gasoline and heating oil presently available still higher. This will make it impossible for people a little higher up on the economic ladder to afford them. Obama does not, perhaps will not, perhaps cannot, see that only more production can enable anyone to have more oil and oil products without others having less.
The first of the criticisms I just made of Obama's plan applies equally to that of Sarah Palin. The two plans differ somewhat in the extent of their destructiveness. The destructiveness of Palin's plan is limited by the fact that it can be applied only within the confines of the State of Alaska. But within the State of Alaska, it gives away more money to the individual recipient than does Obama's plan: $1,200 versus $500.
A major consequence that both Obama's and Palin's plans overlook is that even insofar as the oil companies are presently prevented by drilling restrictions from using their funds for expanding oil production, their funds still perform a valuable economic function. Namely, they provide the capital for carrying on production elsewhere in the economic system. To the extent that the oil companies simply put their funds in the bank, buy Treasury bills, repurchase their own stock, or pay out extraordinary dividends, those funds are then available in the financial markets, all of which are interconnected. Their presence makes it easier for other businesses to obtain loans or sell stock and thereby have the funds to carry on their business activities.
Sarah Palin probably never thought of this when she dipped her hand into the oil companies' till and withdrew $1,200 for every Alaskan. What she was actually doing in her ignorance was helping to make the credit crunch that the United States has been experiencing that much worse. She was helping to deprive businesses around the country of capital they would have had, if that capital had not been made available to be consumed to the extent of $1,200 for each and every Alaskan.
Obama and Palin are both obviously ignorant of economics. John McCain, who picked Palin to be his running mate, has admitted his own lack of knowledge of the subject. Knowing little or nothing of the subject himself, he could not be expected to realize that Palin knew nothing of the subject either. An examination of the record of Obama's running mate, Senator Joseph Biden, would probably turn up a more extensive record of comparable ignorance of economics, given his greater number of years in public life as a leading spokesman for the Democratic Party.
This is certainly frightening. What is even more frightening is that the whole intellectual world, including the press and the media in general, the professors of economics, law, political philosophy, history, and all other fields directly or indirectly bearing on politics, all are overwhelmingly characterized by the same level of ignorance and thus unable to identify it in the candidates. We now apparently live in a society and culture that has become comparable in its level of economic knowledge to a pool table, on which mindless billiard balls randomly careen and collide and no knowledge or understanding of any kind is present.
Copyright © 2008, by George Reisman. George Reisman, Ph.D. is the author of Capitalism: A Treatise on Economics (Ottawa, Illinois: Jameson Books, 1996) and is Pepperdine University Professor Emeritus of Economics. His web site is www.capitalism.net and his blog is www.georgereisman.com/blog/. A pdf replica of his complete book can be downloaded to the reader's hard drive simply by clicking on the book's title Capitalism: A Treatise on Economics and then saving the file when it appears on the screen.
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