The Economist's Cookbook

Recipes For A More Free Society

  • "The curious task of economics is to demonstrate to men how little they know about what they imagine they can design."

    - F.A. Hayek

The Holy See in Economics?!?

Posted by The_Chef On 10:59 AM 3 comments

Well that is interesting. The Pope now has the answers to the problems that we see in South America and the answer is not a reduction of transaction costs, more clearly defines and enforced property rights and a tax structure that favors growth, its rejection of both capitalism and Marxism. While I applaud the Pope for his insight in rejection of Marxist thought, I find his condemnation of capitalism both deeply disturbing and hilarious.

Rome has not been known for it's acceptance of the ideal of free thought, free speech, and freedom in general. I understand that the Catholic church is a "moral" entity in nature, but at the same time I would rather live in a free society than one governed by the whims of a group of individuals with an agenda.

This comment especially grated against me:

He also warned of unfettered capitalism and globalization, blamed by many in Latin America for a deep divide between the rich and poor. The pope said it could give "rise to a worrying degradation of personal dignity through drugs, alcohol and deceptive illusions of happiness."

Wow... Now this coming from a Catholic... just wow... allow me to elaborate.

1.) Given that the Pope is the Leader of a church that believes that man is a fallen creature, you would think that he would want to engender the creation of the system which best takes advantage of that fact. You cannot change the nature of man, the Church acknowledges this. As such, it would seem that favoring capitalism which plays to the greed of human beings would be the best possible system to live in, especially if it is a free society where people are capable of making their own decisions based on their own subjective valuations of any given good or service.

2.) Trade never makes either party worse off. John Stossel recently had a great piece on this here. It is painfully clear to anyone who is versed in trades and free-market Econ that we call it "mutual gains" from trade for a reason. How much worse off would we all be if we didn't trade?

3.) So what we see here is a Pontiff signaling and playing to the masses, which is usually what religion does. Papal signaling, who would have thought?

Now to be charitable, I'm not sure what exactly the Pope mean by "unbridled" capitalism. Hayek himself says that capitalism and exchange work under a set of very clear and strict guidelines (e.g. Property rights), but I don't think that is exactly what the Pope was saying ... I think he's talking about a mixed economy, which is really just mild socialism....

So thanks Popa Pope, you've displayed your ignorance.

US to Sue OPEC?!?

Posted by The_Chef On 10:23 AM 5 comments

Well when I saw this article here on Newsmax my first reaction was to chuckle and then I realized that this was serious. the House has passed a bill that will modify the anti-trust rules allowing them to sue other companies in other countries for "price fixing".


Since when do we get to dictate business policy to companies or organizations in other countries? this is completely absurd and the statement from the White House saying that such a suit could cause a series of backlashes from the middle east and make our oil situation worse is surprisingly correct. You don't bite the hand that feeds you, apparently the House has yet to figure this out.

Are Moderate Muslims Really Silent?

Posted by The_Chef On 10:54 AM 0 comments

Stephen Schwartz of TCS Daily says no.
Here is his fascinating article. The things brought up in this article are veeeery interesting.

Question: Is this silence because the Mainstream Mass media (MSM as Schwartz calls it) obsessed with fear-mongering because it makes for good news, or do they just not care? So pretty much: Negligence or Apathy?

Addendum: This is an article on the suppression of a Film called Islam vs. Islamists by PBS who sponsored the film which supposedly gives the views of various US groups of moderate muslims who are speaking out against the hijacking of their religion.

Gov't as a Price Gouger

Posted by The_Chef On 3:12 PM 0 comments

Props to Russell Roberts over at Cafe Hayek for this little gem:
Roberts on George Will on Price Gouging
Here is the link to the full article from the Washington Post:
Posturing At the Pumps By George F. Will
Wow, just wow, the inane nature of politics in this country continues to amaze me! This short bit especially got me riled up:
"The bill does not explain how a gouger can gouge when his product is obtainable more cheaply nearby. Actually, Pelosi's constituents are being gouged by people like Pelosi -- by government. While oil companies make about 13 cents on a gallon of gasoline, the federal government makes 18.4 cents (the federal tax) and California's various governments make 40.2 cents (the nation's third-highest gasoline tax). Pelosi's San Francisco collects a local sales tax of 8.5 percent -- higher than the state's average for local sales taxes."

Wait wait wait .... those KAZILLIONS of dollars that the oil companies are making in profit is eclipsed in profit by the Federal, State, and Local governments?!?! NO WAY! *chuckle* This foolishness truly has risen to new levels.

By the Way, that picture makes me chuckle.

*sigh* I found this on TCS Daily:

Wow ... Just wow. the FDA procedure is hampering the creation of drugs which could potentially be used to treat any number of devastating diseases ... because the cost of wading through all of the FDA red tape and FDA requirements is too high.

Nearly a BILLION dollars to go through all the FDA crap, NO WONDER DRUGS ARE EXPENSIVE!

And now the FDA is rejecting a drug because there are other drugs like it on the market ....

Wait ... so .... the FDA is deciding that consumers don't need another option when it comes to certain drugs. Congratulations, the FDA now knows what's best for you, and it's a smaller choice set.

Let's assume that we have Disease A. Now disease A isn't deadly or debilitating, but it's a painful condition and people want treatment for it. Now let's assume that three different companies produce drugs X, Y, and Z.

Now Another company develops drug P and drug P treats disease A, much like drugs XYZ do.

If Drug P were allowed to enter the market, competition between the four companies for market share would increase and we'd see a fall in price, provided that the market is free enough to allow for price shifts (i.e. no Gov't price ceilings or floors, no predatory pricing laws, etc). We should see a drop in the prices of all the drugs which treat disease A. If drug P isn't allowed into the market, the prices of drugs XYZ will remain higher than if P entered the market and the consumer's choices will be more limited.

"The FDA: Screwing you hard, fast, and hard ... for your own protection"

So apparently the cover story of Business Week has an article on the expanded use of credit by low-income individuals. The conclusion is that this is in fact bad for these people. Somehow the idea that poor people using credit to get things that they want is bad is completely ludicrous.

Of course there are poor people that can't properly manage their funds and end up in debt trouble. Hey guess what, I've been in that boat before. I know what it's like, and I might be back in it after I graduate as I've invested alot of loan funds in my college education.

Props to Russell Roberts over at Cafe Hayek for finding this.

One republican I would vote for...

Posted by The_Chef On 10:48 AM 0 comments

Ron Paul (R) Texas

From the Washington Times in regards to a debate televised by FOX:
Mr. Paul, Texas Republican, stood firm, saying "blowback" to U.S. actions is real: "If we ignore that, we ignore that at our own risk. If we think that we can do what we want around the world and not incite hatred, then we have a problem."

He's quite right, perhaps the best policy is one of NOT pissing people and countries off, especially ones that are willing to kill you to prove how upset they are with you.

Now the idea that he would actually win the Republican nomination is nothing short of a pipedream for Libertarians but I can still hope can't I?

Maybe someone like Paul would actually push for some real policy changes in Washington.

Thought of the Day

Posted by The_Chef On 3:58 PM 0 comments

I "borrowed" this from Walter Williams' GMU homepage.

"A free people ought not only to be armed and disciplined, but they should also have sufficient arms and ammunition to maintain a status of independence from any who might attempt to abuse them, which would include their own government." -- George Washington

There's what the founding fathers thought about guns.


Jerry Falwell Dies at 73

Posted by The_Chef On 3:10 PM 0 comments

WARNING: This is a rant.

So today Jerry Falwell dropped dead. He will awake in the next life wondering "where am I going in a hand basket and why is it so hot?"

On a more serious note, what will this do to the "religious right"?

This leaves the last major rallying figure for them to be Pat Robertson, who has proven himself to be a nearly irredeemable dope. Well, maybe this means that a new figure will rise up and take his place in the realm of absurd "christian" rhetoric. Still, all in all I would consider this a benficial thing for even the "religious right". The problem with most of the people in that category is that they, like the late Jerry Falwell, tend to sacrifice other people's freedom and and their own logical faculties in service to their higher more "enlightened" view of morality. THis might push some of them to look beyond their ideal theocracy and look toward a more free society, one based on tolleraance, not acceptance, but tollerance.

The man horribly represented what christianity is, and what christians should act like and I shall not for a moment mourn his death.

/end rant

...what about Hayek?

Posted by The_Chef On 1:31 PM 0 comments

So as an undergrad last year in my Austrian Econ class, Dr. Tony Carilli assigned for us, among other scholarly articles, the Reader's Digest summary of Hayek's famous, or perhaps infamous depending on your views, work The Road to Serfdom. Well being the free market hound that I am, I have been reading through the actual book.

So I asked myself "are we on this road to serfdom?"

Now the answer is not something that I have at this time as I have not finished the book and dare not begin an analysis of this question until I have fully finished TRS but I wanted to note a few things that I have picked up on. I wish to address one here.

Hayek's analysis of the shift away from the radical socialists of the early 20th century to the gradual "progressives" that we see today is exactly what I see and what scares me. As Hayek states in his introduction of the 1969 printing of the book there is a feeling "toward piecemeal change."
Whether because of ignorance or active planning, we see this effect in modern American society. The drive to socialize the economic activity of the country's citizens is still quite alive and well. This includes the vaunted National healthcare plan that is coming, whether we want it or not. This, among a series of what I see as violations of the government contract which we agreed to in the Constitution, is one of the reasons that I think we are on slowly sliding into neo-socialism as I'll call it.