The amazing thing about Paramus is that the Route 17 shopping corridor contains anything you would ever want in life, except if you’re wanting it on a Sunday. Everything except food is closed on Sundays due to Bergen County’s “blue laws,” pretty much the only ones left in the nation. The laws recently made national news because new NJ governor Chris Christie proposed ending them to help close the state’s budget gap (against some local opposition).

I’m reading some essays by the author/essayist Charles Chesnutt for a class. Chesnutt is fascinating because if you saw him today, you would immediately classify him as white without a second thought. However, by the “one-drop rule,” Chesnutt was black, and he self-identified as African-American even though he looked as white as anyone.

In his essay “What Is A White Man?”, Chesnutt writes about the laws deciding what composition of genetics made a white or black man, especially in the South: “Some day they will, perhaps, become mere curiosities of jurisprudence; the ‘black laws’ will be bracketed with the ‘blue laws,’ and will be at best but landmarks by which to measure the progress of the nation. But to-day these laws are in active operation, and they are, therefore, worthy of attention; for every good citizen ought to know the law, and, if possible, to respect it; and if not worthy of respect, it should be changed by the authority which enacted it.”

Isn’t it fascinating that Chesnutt wrote in 1889 as if blue laws were a quaint relic of ancient history, and yet, Bergen County is still clinging to them 120 years later?

The upside, of course, is that at least America has left behind the hideous practice of the government deciding what race we each are (and therefore what rights to bestow on us). The government may want you to choose a race for your census form, but you can self-identify as anything. Sometimes rather than focusing on how bad our current government is, it’s nice to reflect on how bad some things used to be and how in many ways, government has improved as time goes on. After all, that’s what every libertarian hopes for, right?

The way to handle this in a libertarian society would be lawsuits. Lots of them, filed by individual consumers for deception and false advertising. That’s one thing that’s different in today’s society vs. a libertarian society. Today, using an egregious environmental example brought up by one of my fellow Humane Society lobbyists, the citizens of Smithfield, NC suffer from the stench of manure lagoons, their children get sick, and their only hope falls to the EPA.

The EPA in turn slaps Smithfield Foods (America’s largest pork producer) on the wrist with a one-time fine of .035% of Smithfield’s yearly sales for polluting so badly and making so many people ill– and, oh yeah, an award for environmentalism while they’re at it. Smithfield, of course, considers these puny fines the cost of conducting business and continues on like normal. Meanwhile, the company’s neighbors have no recourse or redress since the EPA has already done what it says it can.

Fast-forward to a libertarian society (no utopia, but better in many ways than what we have now). All of those individuals would personally sue Smithfield Foods in a slam-dunk case, collecting millions of dollars, if not hundreds of millions of dollars, in damages for this company polluting the entire town and rendering it virtually unlivable. Smithfield has also in the process of pork producing polluted the water sources of much of eastern North Carolina, so virtually everyone in that half of the state could jump in with lawsuits, too. What happens in this system? You guessed it, Smithfield would be out of business tomorrow.

So in our prospective libertarian society, there are many consumers who would be upset about their mislabeled fur and would sue and have an effect on these companies’ bottom lines that would make them sit up and label their products correctly. People wouldn’t be able to afford it, you say? The type of people who can buy $500 faux fur coats at Neiman Marcus can spare a few for a lawsuit and may even have lawyers on retainer. In our current system, instead of any semblance of justice on the part of those wronged by these companies, we have the Humane Society suing the deceptive companies under an obscure federal law (the D.C. Consumer Protection Procedures Act) with no results and trying to get federal legislation passed at the same time.

So, I’ve told you what tactics I would use to immediately solve the problem of the deceptive fur sellers. Tomorrow, I’ll discuss why a federal law won’t really do anything on behalf of the cause of ending the fur mislabeling and could in fact make things worse.

I’m not sure exactly why this rubs so many people the wrong way. What does it make you feel to live in a society where someone feels they must have a job, or they must go to law school, or live in New York City, or commute to work, or attend conferences? Why is selling an organ that you’ll probably never miss that much different at all?

Megan McArdle explains how this isn’t even a moral quandary at all, when people are suffering and dying due to kidney shortages. Not everyone can be Steve Jobs and fly to the state with the shortest waiting line– what about them? Why should they feel pressured to die so that others can make a political point that people should only offer up their organs on a purely altruistic basis?

Daniel Akst writes:

“It’s illegal in this country to buy or sell organs for transplant. This is an unjust law made and enforced by people who desperately need neither organs nor money. It condemns kidney-disease sufferers to death and potential organ donors to poverty. It’s a law that I will unhesitatingly break if one of my children needs a kidney, and I hope you will have the decency to do the same if a member of your family is in a similar situation.

The sanctimony of those who condemn these transactions strikes me as outrageous. If someone has the right to abort her own fetus, why does she not have the right to sell her own kidney? By what authority does the state tell me I cannot save myself or my family members by paying money I earned to a willing seller of a surplus item? In fact, why wouldn’t a system of national health insurance include a provision for organ purchases? These transactions should not just be legal for the rich but subsidized for the poor, all in a carefully designed and closely regulated marketplace serving buyers, sellers and even medical ethicists. It’s a shame that even one more person has to die before this law is changed.

Of course, kidney buying wouldn’t have to be subsidized for the poor. There are many poor people who amass hundreds of thousands of dollars through generous private donors for a potential organ transplant surgery, only to die while in the waiting line.

Thirteen people will die today waiting for a kidney.

Thus, we have a perfect example of the free market at work.

If the government had gotten involved to “usher the technology along,” the price certainly would have increased UP from $2 million, and the technology would still be in research stages and unavailable to the general public, probably on the basis of “consumer protection.”

Joe the Plumber is the perfect messenger: he’s not a Wall Street banker or a lawyer or even a doctor. His name is actually Joe, and he provides an important, if un-glamourous, service: plumbing. No one becomes a plumber because they want to be a millionaire, although I’m sure plumbing, like garbage collecting, can help someone earn a good living because there’s less competition in people who want to take on the job.

Those who are criticizing Joe as a wealthy man who needs to hand over his dough to other Americans (as is the case with the New York Times’ Caucus comment section seem to think Joe is making his work visits in limos and relaxing, sipping champagne while he’s fixing people’s plumbing. The man says he wants to save for his son’s college education and works 10 to 12 hours a day to do so (and by the time his son gets to college, the price tag for tuition will be so over-inflated that he might in fact need that entire $250,000 a year to pay it).

Joe the Plumber (actually Joe Wurzelbacher of Ohio) wants to buy a business, see– he doesn’t have the business now, he just wants to buy it and would be making “payments for years” on it– and he’s hoping the profits would be more than the $250,000 threshold for Obama’s tax cuts. If it is, his taxes will go up and a lot of that profit will be gone, when he’s just trying to fix people’s plumbing, make a living for his family, and save for his son’s college education. A tax increase means he won’t be able to hire other plumbers on– creating those jobs Obama is always talking about– and he won’t be able to buy a new truck– helping those American car companies Obama is always catering to in Detroit.

In other words, he might not be able to buy the business at all.

… I’m planning on purchasing this company – it’s not something I’m gonna purchase outright, it’s something I’m going to have to make payments on for years – but essentially I’m going to buy this company, and the profits generated by that could possibly put me in that tax bracket he’s talking about and that bothers me. It’s not like I would be rich; I would still just be a working plumber. I work hard for my money, and the fact that he thinks I make a little too much that he just wants to redistribute it to other people. Some of them might need it, but at the same time, it’s not their discretion to do it – it’s mine.

Joe says about himself:

you know, my big thing is the American Dream. I work hard. You know, I was poor; my mom raised me and my brother by herself for a very long time until my dad came along. So I know what it’s like to suffer. It’s not like I was born with a silver spoon… Eventually – I mean, just to sound a little silly here, but you need rich people. I mean, who are you going to work for?

You start giving people stuff, and then they start expecting it – and that scares me. A lot of people expect it now. They get upset when their check’s late, they get upset when they don’t get as many benefits as they used to, or when different government agencies are cut or spending is cut here and there for whatever reason – people get upset at that. And that’s because they’re used to getting it and they want more. I mean, everyone’s always gonna want more. People work the system left and right to get more out of welfare, to get more out of state assistance, federal assistance. And if government’s there for them, they’re gonna keep on trying to manipulate it to get more out of it. You got people that come along and say, “Hey, I wanna help you people,” I mean, they’re all ears! They’re like, “Hey, you can help me more, I don’t have to work as hard, I don’t have to do as much, and you’re gonna give me this? Man, that’s great, you’re a good guy.”

That is essentially what is wrong with our politics and the fundamental problem with a government such as the one we have– the tendency will always be towards bigger government, although that is not necessarily the best way to go for the long run.

So yeah, it goes down the socialist – His healthcare plan scares me. You know, I don’t like people going without healthcare, but it’s not my job to pay for everyone else’s healthcare. It’s hard enough paying for my own. I like the idea of deregulation as far as – nationally, you know, you only get insurance companies that can work in this state – if you deregulate that then you have more people competing and then the prices would go lower. It seems pretty simple to me. It probably isn’t that simple – but you flood the market with more products, usually they go down cheaper.

With just a few paragraphs, Joe has proven himself to be better at understanding basic economic facts than even a Nobel Prize-winning economist like Paul Krugman; he essentially expounded on many of the best and basic reasons why a free market economy, with rare exception, works better than a regulated, planned, socialist one: we need rich people because we all need to aspire to something. Ask anyone in this country if they want to be rich or not, and overwhelmingly they’ll say they do. Sure, some genuinely might not care, but if given the choice, we’d pretty much all prefer to be wealthy, and that’s what keeps us plumbing and garbage collecting and teaching and nursing and selling real estate. We all have the chance to be wealthy, if we work hard enough at something we’re good at. That’s why Joe the Plumber works 10 to 12 hours a day, and it’s why anyone would work 10 to 12 hours a day.

Regulation is usually ineffective and devastates competition, thereby decreasing choices for consumers and quality of services and products.

And what is Joe the Plumber’s idea of the American Dream?

Me personally, my American Dream was to have a house, a dog, a couple rifles, a bass boat. I believe in living life easy and simple. I don’t have grand designs. I don’t want much. I just wanna be able to take care of my family and do things with them outdoors and that’s about it, really. I don’t have a “grand scheme” thing. My American Dream is just more personal to me as far as working, making a good living and being able to provide for my family, college for my son. Things like that – simple things in life, that’s really what it comes down to for me. That’s my dream.

This guy deserves a New York Times column.

Today, I head from two extremes: venturing from the very Eastern-European Bratislava, Slovakia into Vienna, Austria, the capital of the Hapsburg Empire and a former imperial city. Austria is a very socialist country, as Arnold Schwarzenegger let us know.

What’s interesting, then, is that Austria lends its name to one of the most free market-oriented strains of economic thought, the Austrian School of Economics. Wikipedia’s article on the Austrian School is virtually incomprehensible, but what it boils down to is this: as little intervention in “the invisible hand” of the market as possible. I had the delight of listening to Austrian-school economist Bettina Greaves speak at UNC-Chapel Hill last year, and she boiled it down in simple terms: from the time the first caveman made something that another person could use and they bartered services, the market has worked and has also been thwarted from working through government intervention, as it is today.

Two of the most famous Austrian economists are Friedrich Hayek and Ludwig von Mises (who was Bettina Greaves’ mentor). Hayek was a Nobel Prize-winning professor at the London School of Economics and the University of Chicago and is one of the key economists able to influence a return to more liberal (liberal as in free) economic policies in the latter half of the 20th century. He was a thorn in the side of John Maynard Keynes, and their debates were legendary and still continue today among their followers.

Of course, there’s still plenty of government intervention and we certainly don’t have a classically liberal economic system at the moment, but what we do have is an improvement from Keynesian policies.

Hayek was a student of Ludwig von Mises at the University of Vienna and during that time, Hayek began to turn away from the socialism he had previously espoused to favor a more libertarian style of economic freedom with little government intervention. It was a good development for not just libertarianism, but for the world, and it is a lesson that Austria has yet to learn.

So today, Libertarian Girl ventures to the land of Ludwig von Mises and Friedrich Hayek.

Auf wiedersehn.

He’s hard to pin down as the governor of California, and to be honest I haven’t really liked his policies that much. Whatever the case, though, I found this video of him discussing Milton Friedman’s Free To Choose entirely fascinating.

It’s changed his life and he can’t keep it to himself! He gave it to everyone as presents! (Does that include his uncle-in-law Ted Kennedy?) He is against government intervention due to the oppressive socialist government of his native Austria, where little children already talk about the pension they’ll receive when they retire from their inevitable “civil servant” job! He’s personal friends with Milton Friedman and his wife Rose! It’s Arnold Schwarzenegger talking about economics! It’s amazing.

• The current system often benefits the rich and special interests, not the poor.
• The “War on Drugs” disproportionately places poor people in prison for non-violent crimes, separating families and ruining lives.
• The inflation tax is a tax no politician will ever speak of, a hidden tax that affects the poor and middle class and benefits the rich. It’s the tax normal people feel every day when they wonder why things are costing more.
• Our monetary system caused the Great Depression and causes boom-and-bust cycles which hurt the economy.
• Private organizations have welfare systems that are more generous, more efficient, and better than government welfare– but private organizations can’t compete with a tax-based system. If there was no government welfare, private groups would step up and help people who need it.
• Subsidies to certain foods cause food prices to rise, which hurts poor people, and especially those surviving on foods stamps, hard. As a result of this policy, junk food goes down in price and more sustaining foods go up in price. This is why many poor people are obese. Private groups with welfare systems provide healthy, nutritious food as part of their program.
• Deregulation would allow more businesses to be started by and for poor people.
• Occupational licensing laws prevent poor people from opening businesses.
• Health care costs would be lower.
• No form of socialism has ever gotten rid of poverty (yes, even in Sweden!)

“There has never been a tax system beneficial for the poor.” — Economics professor Ken Schoolland

The current system benefits the rich and special interests; the poor do not benefit as much as they would in a libertarian society.

First of all, we have to look at the system. We currently have a system where we supposedly act as Robin Hood and tax everyone to give money to poor people. That’s not the way it works out, though. Poor people get taxed too, often very aggressively– income tax, sales taxes, business taxes if they want to open up a shop, licenses they have to get, gas taxes, tolls, fees, property taxes if they want to own even a small house, and the inflation tax, which I’ll discuss in a bit. All of these taxes affect poor people more than the rich, so they are regressive, with the possible exception of income tax.

In a non-libertarian system, rich people often make a net gain from the government, because the money the government gives them can be more than they pay in taxes. That’s what the system is supposed to do for poor people, but it’s what it actually does for rich people. Many people take welfare without needing it, figuring that they pay taxes, so why not take the benefits?

Income tax can also be regressive, because rich people can afford accountants who fiddle with the numbers until the person doesn’t owe anything, they pay their spouse and kids a salary, they take tax credits and deductions, they donate to charity, they put money in accounts which they don’t owe taxes on, and in some cases, they even send their money overseas to a tax haven. Poor people can’t do that. Rich people have the money to form corporations which can pay for lobbyists to get corporate welfare from the government, which unlike individual welfare, can run to billions of dollars. It’s not poor people getting these billions.

“The net effect of our policies, the evidence for which is overwhelming, is that we are redistributing income up.” — Daniel Cay Johnston, Free Lunch: How the Wealthiest Americans Enrich Themselves At Government Expense (And Stick You With The Bill)

“One America that pays the taxes, another America that gets the tax breaks.” — John Edwards

Sure, I don’t fault Edwards for using the kind of tax system he did to get certain liability waivers. However, if he really believed in “Two Americas,” he could have written out a $738,000 check to the US Treasury and said to use it for Medicare. He did not.

Robert Higgs writes:

“In fact, the overwhelming portion—more than 85 percent—of all government transfer payments is not ‘means-tested,’ that is, not reserved for low-income recipients. The biggest share goes to the elderly as pensions and Medicare benefits, and anyone over 65 years old, rich and poor alike, can receive these benefits. Today people over 65 have the highest income per person and the highest wealth per person of any age group in the United States. Federal transfer payments to farmers present an even more extreme case of giving to those who are already relatively well off. In 1989, for example, the federal government paid about $15 billion to farmers in direct crop subsidies, and 67 percent of the money went to the owners of the largest 17 percent of the farms—in many cases payments to farmers are literally welfare for millionaires. It is simply a hoax that, as a rule, government is taking from the rich for the benefit of the poor. Even people who believe in the rectitude of redistribution à la Robin Hood ought to be troubled by the true character of the redistribution being effected by governments in America today.”

Finally, you can’t really fault politicians for acting this way. We elect them, and we keep electing them despite their behavior. We seem to like it when a politician says one thing and does another. We seem to accept it when a politician, proclaiming a love for poor people, takes advantage of tax loopholes to get out of the taxes they’re trying to increase. Since we reward them for it, a politician has no reason to actually do something for the common person and not reward his or her rich cronies.

You can see why there is a real incentive on politicians’ part to convince you that you’re better off under the current system than you would be if it didn’t exist and get you to actually extend that system. The idea that we receive more back from taxes than we put in really makes no sense (when you keep in mind all the foreign aid and nation-building dollars we spend overseas, we’d be in a much bigger debt than we are now if we all got back more than we put in), but it’s deeply entrenched. Everyone wants to desperately feel good about themselves when they are forced to pay all these taxes, so they like to imagine there’s a reward of fabulous roads and schools at the end of the rainbow.

There are still poor people in Europe.

If socialism can end the problems of the poor, I ask you this: why are there still poor people in Europe, which has both high taxation rates and very high social welfare transfers? I used to live in Europe, and I’d see more poor people as I walked down the street in London than I ever have in New York City. Their high taxes, the NHS, and other social systems have not prevented people from being poor– in fact, the neighborhood in which my university was located was a very poor immigrant neighborhood in the East End filled with “council housing” (housing projects) which was pretty similar to many immigrant neighborhoods in, for instance, New York City. Ask the Algerian immigrants in the banlieues in France if France’s “social net” has helped them, or if it in fact has made it harder for them to find jobs. Do US states with higher taxation rates and higher rates of welfare see an end to poverty? No, but taxation goes higher and higher, hurting the middle-class and small business owners the most.

The “War on Drugs.”

The United States has the largest prison population in the world, with a higher percentage of people in prison than in any other industrialized nation– and our prison population isn’t made up of rich people. A large percentage of our prisoners are there for non-violent drug crimes, stemming from the federal “War on (ed. note: Some) Drugs.” This campaign has meant that poor people are more likely to be convicted and spend time in prison for non-violent drug crimes than rich people. A person caught with the same amount of crack cocaine– the drug of choice for poor people– is sentenced to a much longer sentence than someone with that same amount of powder cocaine, a drug only rich people can afford.

The Tax You Never Heard of– the Inflation Tax.

A huge aspect of what can hurt poor people has been called “the inflation tax.” I used to have no real problem with inflation; sure, the prices of everything would go up year-to-year, but I figured that everyone would be paid more, so it would be a system of “nothing gained, nothing lost” for everyone involved. I was surprised when I discovered this was not the case. In fact, when the government “lowers interest rates” (while claiming, with the media’s help, that this is a good thing for the nation), the only people who benefit are on Wall Street. They buy the government’s bonds at lower rates, they see the extra printed money first, they enjoy the rising stock prices. Meanwhile, inflation of the cost of goods hits poor people before their wages catch up; they’re paying higher prices for goods while making less money. The government also hands over this newly-printed and not-yet-circulated money to the military industrial complex and other large government contractors, who enjoy the money while before it has caused inflation and later pass it on to middle-class workers who then get only the real, inflation-adjusted value of those dollars. It’s a travesty on our federal government’s part. Hardworking seniors and others who don’t play the stock market and instead have savings accounts are also penalized by the lowering of interest rates– they make less money back on their accounts. Those pensioners who are on Social Security are supposed to have their income adjusted for inflation, but the government only calculates that to be about 3% a year– far less than the approximately 12% real inflation that other groups have found that the American economy has. That means that we all are losing 9% a year in real income, even if it is adjusted for 3% inflation first. This all results in a transfer of wealth from the poor and middle classes to the people trading billions at hedge funds.

The inflation tax is perhaps the most interesting tax because, while they feel it every day, most people don’t realize it exists and politicians are able to ignore it. Let’s see if Barack Obama ever mentions the inflation tax; I bet you a billion in just-off-the-press Federal Reserve notes that he most certainly will not. That would require admitting that government spending often benefits big business rather than little people.

Inflation goes on to hurt poor and working-class families in another way: because dollars are worth less, they get paid more in dollar amounts (although not in real dollars, once the amount is adjusted for inflation– they’re probably actually making less than they were pre-inflation). The hardworking family then gets pushed into a higher tax bracket and have to pay higher income taxes– all on money that has gone down in value! Income tax brackets do not allow for inflation in their calculations, just dollar amounts. As a response, the family might call for increased government spending– which may provide temporary relief, but of course begins the inflation tax cycle all over again and causes the family to again suffer more in the end.

Our monetary system causes boom-and-bust cycles and depressions, which are hard on the poor.

Our welfare society sprang up during the Great Depression. It may not have come into being if it weren’t for the massive loss of jobs during that era– a loss which was caused not by capitalism, but by monetary policy of the Federal Reserve itself, as Milton Friedman first explained and Ben Bernanke later agreed. So, the Great Depression was not a natural consequence of capitalism, but was caused by a central bank trying to regulate capitalism, and the welfare state– also the government trying to rein in capitalism– was the response.

Private organizations don’t do as much as they would in a libertarian world.

What did poor people do before the Depression? How did things even exist? First of all, many of our most successful hospitals were started not through government money as they would be today, but through private donations and by churches. Many of our most beautiful libraries were created not through government money, but by donations from Andrew Carnegie.

Rather than the poor getting government handouts (or the rich scamming for government handouts), churches and private organizations were in charge of helping the poor. Why is that a better system? Churches aren’t going to give money to rich people or to drug addicts who will just use it for their next fix– but the government certainly hasn’t been vetting for any of that, and that type of waste takes away from poor people who truly need help with their basic needs. Private charity is based on relationships and is self-vetting. This works out well in regards to the missions of many Christian churches, along with most major religions, because the God they base their theology on said, “Do unto others as you would have done unto you,” and specifically said to help the poor.

“And remember in all things the poor and the needy, the sick and the afflicted, for he that doeth not these things, the same is not my disciple.” — Joseph Smith

As one example of what a private welfare system might look like, the Church of Latter-Day Saints has an extensive, efficient, and successful welfare system for its members and for others in society, including international victims of tsunamis and other natural disasters. People in those countries don’t have public welfare systems to rely on, so private organizations take up the balance. The Mormon welfare system employs its recipients in its warehouses and stores, helping them help others and giving them job skills in the meantime. It is all done on an absolutely voluntary basis by the Mormon church, with better results than the state and federal welfare systems run by countries: 30% of the recipients are able to leave the Welfare Plan each year, and the average time on welfare is only four months. Food, clothing, household needs, home repairs, skills training, help with job searches and resumes, addiction recovery, adoption assistance and, if needed, shelter, are provided free. Many companies donate to the 751 warehouses, which serve 13 million people in America. Anyone who wants help can get it from the Mormon system, and donations to it by LDS members are totally voluntary. However, the LDS or any other private welfare system has no incentive to expand more than it is today when government options exist as well.

Are the Mormons the only group that does this sort of private charity? Margaret Thatcher noted in her memoirs, “My old constituency of Finchley has a large Jewish population. In the thirty three years I represented it I had never had a Jew come in poverty and desperation to any one of my constituency surgeries. They had always been looked after by their own community.” Private groups do provide welfare while the government does, and they would provide more if the government no longer did.

A clear advantage to the nature of private giving over a system of taxation is that those who give to private charities derive pleasure from helping the poor, and the poor are not taxed to benefit themselves down the line. Private giving wouldn’t have to be done by churches; there could be specific anti-poverty groups that want to help the poor and do a better job than the government can, just like the Mormons. Since more than one of these organizations would spring up to correspond to the demand once the government got out of the business of welfare, poor people would even have a (gasp!) choice in who they got welfare from.

Healthier forms of welfare and no subsidies on certain unhealthy foods.

One particular note that is interesting to me is that the Mormon storehouses feature healthy foods, fruits and vegetables and canned goods, not packaged foods. However, if you have food stamps and are looking for the cheapest form of the most calories, you’ll most likely be led to the junk food aisle. Healthy foods are more expensive than unhealthy foods, and if you want to make your welfare check go as far as it can you’ll probably buy junk food. Michael Pollan has noted that this is because of our farm bill, granting subsidies to certain (very wealthy) industries at the expense of others, which makes our food more expensive than it otherwise would be.

Some people say to me, What about starving people? People wouldn’t starve in a libertarian society, and in America today, “the most reliable predictor of obesity in America today is a person’s wealth… So how is it that today the people with the least amount of money to spend on food are the ones most likely to be overweight?”

“If anything, the greatest health problem faced by ‘the poor’ in Western countries is morbid obesity rather than starvation.” — Ben O’Neill

Deregulation would increase competition and bring prices down.

In a libertarian society, we would have deregulation. What does that mean? Let’s start by giving an example from today. Let’s say that I have an idea for a car– it’s safe, it’s environmentally friendly, it’s less expensive than a typical $25,000 sedan of today. What could I do? I can’t start a car company; the car industry is so highly regulated, with expensive and labarythine restrictions on every little aspect, that it has huge barriers to newcomers. If Olds or Ford wanted to start their companies today, they wouldn’t be able to with all the restrictions they’d be able to meet. You’d need billions of dollars to start a car company today. As a result, we don’t have a car that runs just on electric, we get old and stale car designs, and we get car companies struggling to meet their health care costs, let alone worrying about creating new and innovative automobiles.

A person once semi-joked that the thing an established company wants most is to have their industry regulated. When it’s regulated, the companies will basically write those laws (in their favor, of course) and will prevent any newcomers from ever coming up to challenge them.

Many people might say, “Those restrictions are there for the public’s own good. It keeps them safe.” However, I beg to differ. Due to these restrictions, the public has fewer choices in car companies, fewer choices in cars, and almost all cars look and feel the same. It’s not a free market, and it’s not as good as it could be in a true market catering to the consumer. In a free market, there would be options that would spring up for safety tests, safety of design, and other car rankings just as there is today with JD Edmonds and Consumer Reports. These could be non-profit, third-party sources like CR or they could be for-profit like Edmonds. There is no need for all these government restrictions on car companies and the building and making of cars. Did Japan start out with these sorts of regulations? No, and Toyota and Honda are recognized to be a higher, more reliable quality than our own domestic car companies can produce.

So, in a system of deregulation, there would be more competition and goods and services would be cheaper. Health care would be less expensive, it would take less money for schools to create a better product in a libertarian world, gasoline would be less expensive as would alternative energies, and housing would also be less expensive.

Occupational licensing laws would be abolished.

Have you ever wanted to start a business and then realized it would be too difficult or too expensive? Well, that’s the effect of today’s society. A friend of mine started a business in New Jersey and never made a dime with it, yet had to pay thousands of dollars in fees and taxes to the state of New Jersey anyway. This is a consequence of our tax-and-keep-taxing-more society and a real detriment to private enterprise and entrepreneurship.

As mentioned above, deregulation would allow a lower bar of entry into regulated industries, which would increase competition, choice, and — for those interested in consumer safety in particular– safety in those industries.

Let’s say Frank wants to open a barber shop on his back porch and charge his friends to cut their hair. First, he would have to incorporate as a business (possibly $1,000 in expense), get a local business license (~$200), find out whether his neighborhood is zoned for it and then try to get the zoning laws changed (into the thousands), then he has to pay federal and state taxes on every nickel he earns. It’s no wonder Frank never tries to get his business off the ground and instead decides to remain on welfare. It’s much easier.

Frank would be able to achieve his dream of a barber shop on his porch in a libertarian society. His customers would be happy they could get a decent rate on a cut, and if they thought the place wasn’t clean or was unhealthy in some way, they would have a number of options: they could either deal directly with Frank on this, they could simply go to another barber, they could report Frank to a third party such as a local Consumer Reports-style organization or a Ralph Nader-type local consumer advocate, warning other customers that Frank’s barber shop was dirty, or they could decide that they didn’t care and keep going to Frank’s barber shop anyway.

If enough of Frank’s customers decided that they didn’t like his hygiene practices, Frank would be out of business and out of luck, so if he cares about staying open he’d clean everything to a level probably exceeding many of today’s health codes. Independent ranking/reporting/monitoring agencies would spring up in a libertarian society, perhaps even going undercover as clients of Frank’s themselves. They’d have low startup costs due to all the reasons outlined above, especially low taxation.

Health Care.

In a libertarian society, health care would be less expensive. HMOs are currently required by the federal government. Before mandated HMOs and “managed care,” poor people were treated at church-run or private hospitals for free and by doctors for free (an example of this is Congressman Ron Paul, an MD who gave free medical care to those who needed it.) Costs for an entire doctor’s visit then would be less than a Medicare or Medicaid co-pay of today. We do not have a free market in health care today. Many people think the rising cost of health care is directly related to the amount of healthcare the government provides and the less competition that can spring up to meet demand.

In a libertarian world, people might have health insurance for surgeries or in case of a health crisis down the road, but they wouldn’t necessarily have the type of insurance people have today, where companies spend 40% of their budget on advertising and routinely deny claims. There would be more insurance companies and more choice on the part of consumers. Routine medical care would be given by individual doctors and cost less then the ever-increasing Medicare co-pay we have now. More pharmaceutical companies would be creating more and more innovative drugs, and some of them would compete on price as well, so you would have less expensive alternatives to many types of prescription drugs.

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“There are those who think libertarianism involves a defence of riches and of the rich. Some libertarians seem to agree. I do not. A libertarian is someone who wants to be left alone, and who wants to leave others alone, and who wants others to be left alone. People must be taken as the owners of their bodies and of what they create in or appropriate from the external world.

Given that all exchange and other association needs therefore to be voluntary, we move to an endorsement of what is called the free market. If some people do better in life in others, so much the better for them. If they contrive to pass on some part of their success to their children, so much the better again.

This is not, however, an endorsement of actually existing capitalism. A free society is not Tesco minus the State. It is a place of small craftsmen and farmers and traders, of artists and of unlicensed doctors and lawyers, and of others needed if individuals and free associations of individuals are to live well. We cannot say much more than this about the arrangements of a free society. But we can be sure it would have no place for big business as it now is found.

Gabb goes on to mention that businesses are given a gift from the state, limited liability, which allows them to take risks that they otherwise would not. It’s clear that huge corporations as exist today would not exist under libertarianism. Would limited liability exist in a libertarian state? What do you think?

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So what would be the alternative?

What would happen if the NIH, the other assorted agencies such as the Department of Energy, and most military/DARPA spending on this-could-be-used-against-someone-someday research were abolished tomorrow? Scientists might be poorer in the short run, but they– and science– would be better off in the long run. Companies would give grants to universities, just as they do now. Unlike government grants, many of these company grants have no strings attached, little to no red tape, and have built-in accountability– the companies simply want to employ a certain number of graduates from the university in question, and that’s how they determine whether the grant was successful. If government stopped with its grantmaking, there would be more of these. Since presumably the government would get smaller, corporate taxes would go down and they’d have more discretionary funds available for this type of grant. The bureaucracy inherent in a government grant would not be there, either, so the same amount of money could provide for more research. Private foundations also currently give a lot of money to universities, and they too would continue to do so, also helped by lower taxes. Philanthropists with billions at their discretion could make billion-dollar grants if they chose. Alumni would give to research, not just new buildings.

Private industry would pick up the slack. Most current medical discoveries are made by pharmaceutical companies hoping to find new drugs. Scientists right now must be tied to a huge research university, a corporation, or the government if they want a good job. Why can’t we have scientific cooperatives, foundations which hire scientists, organizations that scientists develop themselves to conduct and own their own research? Potential scientific entrepreneurs have less money (in a culture of endless regulation and steep taxation) if they did want to fund research of their own. This makes no sense when the free market can do better– the Gates Foundation shows this. However, why would private industry fund research now, when the government is all too willing to pay them to do it? The government subsidizes private companies in activities that they should be funding themselves and takes away the power of the market and the consumer to decide what is the best product. Private companies do donate to universities for research, but they don’t do as much as they would if the government hadn’t taken over that role.

How do I know that there is waste in the system? If you are a researcher with a lab that has funding, you know there is as well. The government not only has waste, it encourages waste through its policy of taking away funding if a researcher doesn’t use it all. The theory is that if you don’t use it, you must not need it and someone else does. Labs may not use all their money this year, but they may want it for next year, so they’re encouraged to spend on things they don’t really need. I had a friend a few years ago who was a buyer for a military base. She just bought things that they needed, all day, every day. The busiest time of the year was the month leading up to the September end of the fiscal year, when the base would buy hundreds of thousands of dollars of extra equipment, often in multiples, just so it wouldn’t lose any funding the next year.

Why would anyone do this to keep funding they might not even need? It’s such a bureaucracy applying and getting the funding in the first place that no one wants to risk losing any part of it. In the free market, looking out for your own self-interest is good; in the government, it’s bad.

The military and DARPA.

I also believe it hurts our military. Any time someone says the government came up with anything of merit, it came from DARPA, which has a relatively small amount of the Pentagon’s research funding. The difference is that it takes risks and acts a bit more like a start-up company experimenting with ideas than a government agency. It’s much more efficient than the NIH and could be a model to other government agencies. However, it’s not as good as it should be. Compared to a private organization, it has huge amounts of waste and an incredible number of really dumb ideas. If you have 100 crazy ideas, of course one of them will work out, but that’s no way to run a private company and of course, it’s no way to run a government agency, either.

Sure, someone should pay for fringe research that could result in invisible cloaks or mind control, or even bombs which cause the enemy to engage in homosexual orgies and forget about fighting. However, it shouldn’t be a taxpayer-financed military. If those technologies are actually viable, they’ll be worth a lot of money to whoever develops them, and people will be jumping at the chance to invent them. Let private industry develop them, shoulder the costs, and then we can buy it from them when it’s perfected. As it is, we pay for products to be developed– and for many more to not be developed– and then pay the contractor again for use of the item. The taxpayer, as with many things, gets hit on all sides while benefiting little. If we left it up to private industry to come up with this stuff, we may very well have invisibility cloaks by now.

While in college, I was walking to a football game with some friends, a little late, and heard a very soft sound. I looked up expecting to see a bird, and 50 feet above me was a Stealth bomber heading to the stadium for a fly-over. A minute later, it was over the stadium and everyone was roaring with approval. We all like technologies that keep us powerful like that, and the Stealth bomber is impressive. No one can deny that. It was created through DARPA.

The Stealth bomber is what allows us all to stomach the idea of letting the Pentagon have $90 billion in research funding each year. The space program is what allows us to give NASA $17 billion a year. However, even the Stealth bomber has its flaws, and the space shuttle has many even fatal flaws. Would we have gotten a man on the moon without the government? Yes, and we still will. The first person to build an airplane did it without government funding, the first person to fly across the Atlantic, Charles Lindbergh, did it to win a prize from a St. Louis philanthropist. There was no government funding or bureaucracy involved. The XPrize has given $10 million for the first team to achieve private space flight, and now the Google Lunar XPrize is going to pay $30 million for the first team that gets to the moon with a robotic mission that sends pictures and video. Someone will win it. Perhaps the next prize will be to send a person to the moon, and someone will achieve that. A private organization or institution along the nature of Bell Labs could have invented something better than the Stealth bomber, better than the space shuttle, in each case for less money, I’m sure of it. But why would it ever try, when the Pentagon spends close to $90 billion a year on research funding, $50,000 a second? Bell Labs and Abbott Labs have publicly stated that they will let the government come up with the long-term breakthroughs that they once excelled in. Why is that? The government bleeds money. What private company can compete with that? The best you can hope for are government contracts and grants… and oh, what contracts! In what other industry can you go $10 billion over budget and be two years late with a project and still get 90% of your bonus, or $849 million? Do you really think free enterprise can’t do better than that? The military-industrial complex is squashing real science and real innovation in favor of rewarding certain segments of society pursuing aims of certain special interests.

Start-ups and venture capital.

Dr. Dr. DeSimone mentioned at the lecture that his start-up company can do things that he can’t in the academic lab– it has more workers and can devote more money to trying out ideas and allow those workers to experiment with what will and will not work. It can also move forward more rapidly than a university lab when it does find something interesting. He also said that the private industry suffers from a lack of ideas; billions of dollars in venture capital are waiting to be claimed by those with good ideas, but (editorial comment) they’re probably being tied up by DARPA. Meanwhile, there’s no chance that a scientific start-up company is going to fund war rather than science.

Many people might say, “Private industry only cares about short term gains.” In true free market capitalism, that is untrue. A company wants to survive for the long haul and must conduct itself accordingly. However, in an atmosphere where quarterly reports are required by the SEC, CEOs certainly do have a reason to put off, cover up, and distort negative information to keep the stock price up for another quarter. They also don’t have to worry about being profitable in the long term because they can probably ask for a government bailout if anything really bad happens. In a true free market, none of that would exist and companies would have to keep themselves healthy to survive– to put a scientific spin on it, it’s a bit of Darwinism for corporations that we do not have right now. We give crutches to those who are certainly not the fittest. In addition, this argument matters little if what Drexler said at his talk is true (and I believe it is)– now, the government also relies only on short gains when allocating funding at the expense of long-term possibilities. The most PC, low-risk venture will be certain to gain funding while true creative research will be thrown to the side and refused– unless it has a possible military use, of course.

What if it doesn’t work out for these companies? What if they fail? That’s fine, some of them will. You will go through many bad ideas before you come to a good one in science, that’s just the way it is, but the market compensates for that as new companies start up. The taxpayer shouldn’t be on the hook for the losses, the business owners should be. Good ideas will succeed, bad ones will fail, and that’s the way the market goes. Things directly related to the military could still be funded, of course. The most successful military-related spinoffs are the Internet and GPS, and they are more related to military purposes than the many projects that have died a slow death at DARPA. In a free market of world superpowers, at least, the European Union’s Galileo system is going to be better and more accurate than GPS– and if the Europeans can do it better, you know private industry could. Competition is good. Our current system discourages any form of competition with government research.

Conclusion: Science is cool, and it deserves something better than the current system.

We shouldn’t just wait around taking leftover medical technology that trickles down from the military-industrial complex. We can make breakthroughs today, tomorrow, and in the future, without politicians in Washington or your state capital taking our own money from us and then dictating what we can research, how, and why, and what we can do in the meantime.

Science can do better. It deserves better.

Tags: nanotechnology immoral, government science funding, scientific funding, government science