Leading the Revival of Individualism & Self Reliance

No Vision Insurance? No Problem! Tech Is Making Eye Care Cheaper and More Accessible

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Leaving the comforts of a salaried, nine-to-five office job and entering the world of freelance work was an exciting decision for me. But it also presents some unexpected challenges when it came to health care.

As someone who has always enjoyed employer-provided health benefits, the prospect of having to pay out of pocket for medical expenses was not something of which I had any prior knowledge. But finding myself in a position where I was more or less forced to get creative about my health care options has been an eye-opening experience.

As my last day in a traditional office setting drew closer, I began to worry about losing my health insurance. Making sure all my ducks were in a row, I placed one final order of contact lenses before I joined the ranks of the uninsured.

Feeling rather proud of myself for getting ahead of the problem, I was disheartened when 1-800 Contacts emailed me to let me know that they could not fill my order. While my prescription was still good for another month, the brand my doctor had prescribed to me had been discontinued. Normally, this would be an easy fix. All I needed to do was call my optometrist and have him write me a new prescription for a different brand.  

But unfortunately, my regular doctor was not able to get me in for an appointment until after my insurance coverage ended. And without optical benefits, paying for a routine eye examination was going to be a huge financial burden. Luckily, the wonders of technology have given options to those who, like myself, find themselves without health insurance.

Another Option

Without vision coverage, getting a new prescription for contact lenses was going to cost me several hundred dollars. And with only two lenses remaining in my reserves, my time and my options were severely limited.

After explaining my plight to a 1-800 Contacts customer service representative, he quickly responded that there were other options available. So long as I had ten minutes to spare, I would be able to take an eye examination online from Opternative for only $50. This seemed too good to be true and my first thought was: “is this legal?”

While some states do prohibit online examinations, many have embraced the practice. Not only is this more convenient for millennials, who are infamously flaky when it comes to visiting the doctor, but it has also helped to drive costs down significantly. A visit to an optometrist will cost you anywhere from $200-$300 without insurance. And even with insurance, it is often still well over $100. And this usually does not include the actual cost of contact lenses or glasses.

To be fair, chains like Target and Walmart have both offered similar services at varying locations, but this still requires an in-person visit. But for someone like myself who is both busy and carless, allowing this process to take place in the comfort of my own home is a huge benefit.

While sites like Opternative and its competitors offer affordable eye exams, their purpose is restricted to the prescription of glasses and contact lenses. This means that they cannot do a full checkup to make sure that your eyes are healthy, which is still an important element to an annual visit. But with the growth telemedicine has seen over the last several years, it may only be a matter of time before this is possible. And for those whose most pressing needs are new glasses or contact lenses, online eye examinations are huge game changers.

And while it is certainly wise to regularly see an optometrist to ensure the health of your eyes, for those who cannot afford such a costly endeavor, online eye exams offer a viable alternative.

How Does it Work?

As soon as I signed up and made an account, the site asked me to sync my phone with my computer in order to use my phone to submit answers for the vision test. The app then asks you to turn the lights down during the vision test, just like in an actual optometrist office. I was then prompted to give my shoe size, which seemed a bit odd, but this is how the site determines how many steps you should take away from your computer screen to ensure quality results. After measuring the proper distance between you and your computer screen, the guided test is ready to begin.

Just as in a doctor’s office, you cover one eye and read the letters on the chart, but instead of responding to the doctor, you submit your answer on your smartphone.

After the test is complete, which typically takes about ten minutes, your responses are sent to an optometrist where they are reviewed. Shortly thereafter, you will receive an email with your prescription.

When all was said and done, the entire process, including receiving the new prescription, took less than an hour and saved me hundreds of dollars. And thanks to the free market, there has also been an increase in subscription-based contact lens services that will ship contacts to you each month for a nominal fee. Where one box of contact bi-weekly contact lenses can cost upwards of $40, brands like Hubble ship daily use contacts to its users for only $36 each month.

While many consumers have been using and loving these digital services, large companies like Johnson & Johnson, who produce 40 percent of the world’s contact lenses, and the American Optometric Association have actually lobbied congress in an attempt to rein in digital eye exams. The companies have stated safety concerns as the reasoning behind this endeavor. But the reality of the situation is that these companies have enjoyed not having to compete in this sector. But just like cabs now have to compete with Uber and hotels have to compete with Airbnb, the decentralization of vision care is resulting in protectionism on behalf of the giants of the prescription lens world.

When it comes to health care, individuals are eager to try things differently. And in our modern, digital era, telemedicine is convenient and accessible.

As the workforce continues to see a rise in contractors and digital nomads, it will be increasingly important to find ways to accommodate those whose employment status does not come with health benefits. Thankfully, digital eye exams offered through companies like Opternative and subscription-based services like Hubble are helping to decentralize vision coverage, making it more affordable and accessible to everyone, whether they have insurance or not.

F.A. Hayek Knew That The “Nobel Prize” In Economic Sciences Was A Propaganda Tool For Central Banks.

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The Nobel Prize in Economic Sciences is a dubious thing at best.

First, it’s not a “real” Nobel Prize in the sense the Nobel Foundation neither chooses nor pays the recipient(s). Technically, it’s the “Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel.” The award itself is of checkered provenance, created by Swedish central bankers hoping to bolster the scientific image of economics. It’s chosen by committee members who purposely apply the same principles used to determine winners in medicine, physics, and chemistry, thereby hoping the public won’t much notice its lack of connection to the late Alfred Nobel (or his surviving family, one of whom blasted the prize as a PR effort designed to improve the bad reputation of economists).

More importantly, though, the “Nobel Prize confers on an individual an authority which in economics no man ought to possess,” as none other than Friedrich Hayek exclaimed in his own remarkable acceptance speech upon receiving the award in 1974.

In Hayek’s view, the Prize threatened to create an aura of hard science certainty around the decidedly social science of economics. This veneer, he worried, would influence both government officials and the public to view economic theory more like laws of physics or properties of molecules.

This was dangerous, in the view of a man who had seen Europe and Russia collapse under “scientific” socialism and written extensively about political economy in The Road to Serfdom and The Constitution of Liberty. He understood the deadly combination of hubris and certainty, and hoped to impress upon the audience that economics remained a discipline that studied humans, with all their irrationalities and frailties. In this sense he demonstrated the degree of respect he still had for the praxeological foundation of his then recently-departed old mentor Ludwig von Mises.

Murray Rothbard, writing in Human Events, had fulsome praise for Hayek as the surprise winner who eschewed the mathematical orientation of previous recipients:

The Nobel award comes as a surprise on two counts. Not only because all the previous Nobel Prizes in economics have gone to left-liberals and opponents of the free market, but also because they have gone uniformly to economists who have transformed the discipline into a supposed “science” filled with mathematical jargon and unrealistic “models” which are then used to criticize the free-enterprise system and to attempt to plan the economy by the central government.

F.A. Hayek is not only the leading free-market economist; he has also led the way in attacking the mathematical models and the planning pretensions of the would-be “scientists,” and in integrating economics into a wider libertarian social philosophy. Both concepts have so far been anathema to the Nobel establishment.

Rothbard saw Hayek’s achievement not only as a refutation of the Keynesian orthodoxy regarding stumulative monetary policy, but also as a demolition of the whole socialist political program flowing from Keynes’s followers:

The political prescription that flows from the Hayekian theory is, of course, the diametric opposite of the Keynesian: stop the artificial inflationary boom, and allow the recession to proceed as fast as possible with its work of readjustment. Postponement and government attempts to stop or interfere with the recession process will only drag out and intensify the agony and lead to our current and probably future turmoil of inflation combined with lengthy recession and depression. The Mises-Hayek analysis is not only the only cogent theory of the business cycle; it is the only comprehensive free-market answer to the Keynesian morass of government planning and “fine tuning” that we are suffering from today.

But F.A. Hayek did not stop with this monumental contribution to economics. In the 1940s he widened his approach to the entire area of political economy. In his best-selling Road to Serfdom (1944) he challenged the prosocialist and pro-Communist intellectual climate of the day, showing how socialist planning must inevitably lead to totalitarianism, and demonstrating examples in the way in which the socialistic Weimar Republic paved the way for Hitler. He also showed how the “worst always get to the top” in a statist society.

So today let us celebrate Friedrich Hayek, the reluctant  and worthy Nobel winner—rather than this year’s recipient, William Nordhaus, an economist who once wrote this, in a textbook no less:

The Soviet economy is proof that, contrary to what many skeptics had earlier believed, a socialist command economy can function and even thrive.

This article was originally published at mises.org

 

 

 

 

 

 

 

 

 

 

 

Talented Entrepreneurs Like Jeff Bezos Are Shrinking Inequality Of Lifestyles, Which The New York Times Refuses To Acknowledge.

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Though readers can’t exactly raise their hands, this column asks readers to at least internally raise them if they’ve purchased something on Amazon in the past month. The column would also like to know how many readers have used the internet in the past hour, but the question is redundant: If you’re reading this column, you’re using the internet. In that case, how long could you go without internet access before losing your mind in the figurative sense?

Probably not very long. Evidence supporting the previous claim is all around us. When people aren’t at their desks working on internet-connected computers, they’re almost invariably tapping away on internet-connected smartphones. Look around you.  It’s not too much of an exaggeration to say “everyone” is on the internet nearly all of the time.

That so many of us view the internet as essential to our existence is a certain sign that most of us have no major problem with rising wealth inequality. Think about it. It’s easy to see the connection between frenetic internet usage and soaring inequality. And for the readers certain that they in no way cheer a rising wealth gap, they might ask themselves if they hate inequality enough to forever renounce their laptop, smartphone, high-speed WiFi, the future promise of 5G, and any other technology that connects people. Absent the world going cold turkey on ever-improving technology, wealth inequality is going to grow and grow. Wonderful. Life will get better as the super-talented are able to reach more and more of the world with their genius. The internet is most certainly the biggest driver of rising wealth inequality in the world, and nothing else comes close.

Punishing Innovation

This brings us to the column by Farhad Manjoo, technology writer for the New York Times. In it, Manjoo writes that “Jeff Bezos should spend his vast fortune pushing for a society where no one can ever become as rich as Jeff Bezos is now.” It’s hard to know whether to laugh or cry or how to analyze what is so obtuse and contradictory. Bezos got rich by virtue of relentlessly meeting the needs of his global customer base, and because he did, Manjoo wants Bezos to spend his fortune making sure no future individual achieves on the scale that Bezos has? Oh, dear…

Implicit in Manjoo’s confusion is that he would have preferred that Bezos had quit tinkering with books, CDs and DVDs. If not the latter, what is Manjoo’s problem with Bezos being so rich? Bezos’s wealth is largely an effect of Amazon’s shares; investors have placed a high value on them given their belief that Bezos will continue to figure out ways to please a growing customer base, yet Manjoo writes as though what Bezos did was a bad thing. By this measure, the late Steve Jobs should have stopped at the iPod, and Mark Zuckerberg should have limited Facebook just to kids at elite American colleges. Reducing all of this to the absurd, would Manjoo blanch at a mass-produced cancer cure if he knew the creator would earn billions for creating it? What about a cure for paralysis?

All of the above is a long way of musing about what Manjoo could possibly mean by his droolings. It’s evident he thinks Bezos has succeeded too much, but then Bezos, Jobs, and Zuckerberg were and are worth billions precisely because few of us could go too long without utilizing their creations. As opposed to limiting the number of people like Bezos, it seems the world would be much better off if there were hundreds like him. Only richer.

Bezos Revolutionized the Internet—and the World

What about the internet more broadly? Manjoo claims that “Mr. Bezos’s extreme wealth” is a function of the “unequal impact of digital technology,” but what he leaves out is that Bezos wasn’t always worth billions. In fact, there was a time when Bezos was ridiculed for presuming the internet had any kind of potential as a connector of buyers and sellers. If Manjoo doubts this, he need only visit the majority of venture capitalists and investors who either passed on backing Amazon in its early days or who consistently passed on buying the shares of what used to be described as “Amazon.org.” Manjoo also misses that the “unequal impact of digital technology” wasn’t handed to Bezos as much as he created it. He saw the commercial potential of the internet long before others did.

Thinking about all this, short of Bezos somehow using his wealth to shut down the internet altogether, there’s quite simply no way he could push for “a society where no one can ever become as rich as Jeff Bezos is now.” Having pioneered what is brilliant, more and more brilliant minds like Bezos will meet the needs of more and more of the world’s population via the usage of the internet that Bezos revolutionized. While 100 years ago an immensely talented entrepreneur like Bezos could arguably only improve the lives of people in Seattle with his genius, the global interconnectivity the internet personifies means Bezos can increasingly serve the needs of the world from Seattle.

Better yet, this interconnectivity is only going to become more pronounced. If 5G lives up to its billing, the ability of the talented to meet our myriad needs is only going to grow, and with it, so will inequality. Sorry, but the internet you can’t live without is the driver of wealth inequality that is set to soar. Thank goodness. Rising inequality in terms of wealth is a sign of shrinking lifestyle inequality between the rich and poor. Think about it. Entrepreneurs generally amass great wealth by virtue of mass-producing the goods and services previously only enjoyed by the rich.

Manjoo ultimately wants Bezos to direct his wealth toward creating a more “equal” society whereby the “have-nots” have access to what the “haves” do, but in clamoring for this false utopia, he’s unwittingly calling for exactly the rising wealth inequality he bemoans. Indeed, Manjoo ignores that money on its own has no uses. Money is only useful insofar as it can be exchanged for goods and services. Applied to Bezos, the redistribution of his dollars to the alleged “have-nots” will only improve the lives of the downtrodden insofar as they can exchange them for life’s comforts. Crucial here is that Bezos got rich providing those comforts. Manjoo oddly wants to make sure no one ever eclipses Bezos, but Bezos giving away his billions to the poor will mean nothing to the poor if there aren’t people like Bezos constantly figuring out ways to meet the needs of the people. All this is an inconvenient truth for statists like Manjoo—and card-carrying socialists, too: They only have a voice and a purpose if the capitalist economy is thriving whereby they can obnoxiously call for the forceful seizure of the wealth produced by the capitalists. The capitalists don’t need socialists, but my oh my, how the socialists need capitalists.

The endlessly confused Manjoo is unsurprisingly caught in a total contradiction. He wants the poor to enjoy the trappings of the unequal, and he wants people like Bezos to finance this equalization but doesn’t want anyone ever again getting as rich as Bezos. But again, redistributed wealth has no meaning if the profit-motivated aren’t bringing goods and services to the market at the same time. Basically, Manjoo naively wants Bezos without all the wealth creation, which is an impossibility. Even if Bezos drops all of his billions into the poorest parts of the world from helicopters, those dollars will only be useful to the poor to the extent that a future Bezos is getting filthy rich serving them…Think about it. Farhad Manjoo obviously hasn’t.

John Tamny is a Forbes contributor, editor of RealClearMarkets, a senior fellow in economics at Reason, and a senior economic adviser to Toreador Research & Trading. He’s the author of the 2016 book Who Needs the Fed? (Encounter), along with Popular Economics (Regnery Publishing, 2015).

The Mirage Of Social Justice, Part 2: What Is Justice Anyway? It’s Not What SJW’s Want You To Think It Is.

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So what is justice? It’s not what we are led to believe it is by social justice warriors.

We must be able to define justice before we can determine how to pursue it. F.A. Hayek defined the emptiness of the concept of “social Justice” in Part 1 of The Mirage Of Social Justice. In Part 2, he proceeds to provide the meaning that is lacking in the typical use of the term.

What Justice Is Not.

First, he tells us what justice is not. Justice can not refer to outcomes. We can not refer to a state of affairs or a circumstance such as the distribution of income between people in a country, as either just or unjust. It is neither. It is a circumstance, a condition. It is an emergent property of the system by which we all live, one that has evolved over time based on individual human behavior.

When we apply the terms just or unjust to a state of affairs, we immediately start to look for someone to blame for bringing it about or allowing it to happen. That, says Hayek, is a very dangerous categorical mistake. It divides society. It makes us all enemies.

A bare fact, or a state of affairs which nobody can change, may be good or bad, but not just or unjust.

Justice Can Not Refer To Outcomes, Only To Human Behavior.

Justice is an attribute of human behavior. The term “just” can refer only to human actions and not to results. In spontaneous order, there are no rules that determine what anyone’s position will be. The particulars of the spontaneous order – the positions individuals actually occupy – cannot be called just or unjust

Justice lies not in the outcome of the system but in its norms of interpersonal behavior, what Hayek calls “rules of just conduct”. These are different from laws, which are enacted by legislatures and are manufactured rather than evolved collaboratively over time. The politicized decisions of the legislature do not determine what is just. Only human conduct – how each individual deals with each other individual – can be called just or unjust. Rules of just conduct refer to the actions of individuals that affect others.

The Rules Of Justice Tell Us What Not To Do.

Rules of just conduct are generally negative rules. They prohibit unjust conduct. Eight of the ten commandments are negative (thou shalt not). Nine of the first ten amendments to the US Constitution in the Bill Of Rights are negative (Congress shall make no law…..and so on). Rules of just conduct enjoin particular kinds of actions in order to help individuals be free to act as they choose. The test of the validity of these rules is universality – do they apply to everyone equally, as opposed to favoring one group over another.

These rules impose no positive duties on anyone, unless they themselves choose to incur such duties. They do not confer rights on any individual. They do not eliminate uncertainty. They do not assure success. They do not aim at a result. They are not the product of someone’s will; they emerge from acceptable human behaviors over time.

Professing To Use Concepts Of Justice To Determine Outcomes Is Socialist And Totalitarian.

Essentially, there are no positive criteria of justice. There is a strain of thinking among the intelligentsia that goes by the name of legal positivism. This means that laws can be written by the legislature and applied by the state bureaucracy to achieve particular results. This, to Hayek, is what is fundamentally unjust. Worse, this concept of law holds that it is legitimate for the state to use coercion in the service of pursuing these particular results, thus totally abandoning the rules of just conduct.

This is simply the ideology of socialism: to achieve total control over the social order because the governing elites believe it is in their power to design and determine future outcomes.

Social justice warriors have seized upon this apparent approval of unjust means to pursue their ends by adopting violent and intimidating methods, from strikes to marches to wild accusations, and even the use of weapons. In the struggle between individual sovereignty and the sovereignty of the omnipotent state, the social justice warriors take the side of the state, in order to intervene to compel individuals into approved behaviors.

Property, Contract And Tort.

We know there is a better alternative to this never-ending struggle. The lesson of history is that a system based on private property and contract tends to bring about the spontaneous order which favors individual human freedom with the appropriate rules of just conduct. Hayek notes that David Hume referred to:

the three fundamental laws of nature, that of stability of possession, of its transference by consent, and of the performance of promises, or, as a modern author sums up the essential content of all contemporary systems of private law, ‘freedom of contract, the inviolability of property, and the duty to compensate another for damage due to his fault.’

Private property and the freedom to transfer it within the rule of law are fundamental for a free and open society. Social justice warriors want private property to be eliminated or transferred without consent. Whatever that is, it is not justice.

How We Can Apply Systems Thinking To Get Rid Of Politicians And Change Our System Of Government.

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Our system of government is no longer working for us. It produces unsustainable levels of spending, increasing amounts of debt that can’t be repaid, and a torrent of regulation that makes all of us criminal in ways we don’t fully understand. It doesn’t keep us safe. It propagandizes, rather than educates, our kids. It conducts unjustified foreign wars. It confiscates large chunks of our income and wealth.

Our political system, which is embedded in our system of government and supplies it with its elected officials, is similarly out of control. It produces hyper-partisanship and conflict  and is eroding our trust, the low supply of which will make government even more dysfunctional because citizens will not obey when there is no trust. It is destroying the institutions that have supported our way of life for over 200 years, and it leads the way in undermining and cheapening the culture.

Can we use systems thinking to point the way to a solution? Systems thinkers believe they can.

To Change A System, Look For Its Function.

A system is an interconnected set of elements that is coherently organized in a way that achieves something. That definition tells us that a system consists of three kinds of things: elements, interconnections, and a function or purpose. A football team is a system with element such as players, coach, field and ball. Its interconnections are rules of the game, the coach’s strategy, the players’ communications and the laws of physics that govern the motions of the ball and the players. The function of the system is to play and win games.

A government is a system with executive, legislative and judicial bodies, administrative departments, a military and a central bank. Its interconnections are laws (which it self-manufactures) and regulations, and the processes to produce them, and its function is to produce more laws and more government.

In Thinking In Systems: A Primer, Donella Meadows told us how to identify the function of a system.

If a frog turns right and catches a fly, and then turns left and catches a fly, and then turns around backward and catches a fly, the purpose of the frog has to do not with turning left or right or backward but with catching flies.

If a government proclaims freedom and efficiency and spending control but produces more and more regulations and more and more spending and more and more debt, freedom and efficiency are not, in fact, the government’s purpose. It may turn left and it may turn right, but it is always producing more government, and that is its purpose. The least obvious part of the system, its function or purpose, is often the most crucial determinant of the system’s behavior.

Self-Organizing Systems.

A system can, to a large extent, cause its own behavior. It can be self-organizing. A system’s function or purpose is not necessarily spoken, written, or expressed explicitly, except through the operation of the system. The best way to deduce the system’s purpose is to watch for a while to see how the system behaves. We have watched the behavior of government over 200 years and it consistently produces more government, more spending and more debt. Government exhibits what systems thinkers call a problem-generating structure.

Understanding problem-generating structures is not enough. Putting up with them is impossible. They need to be changed. The destruction they cause is often blamed on particular actors or events, although it is actually a consequence of system structure.

Blaming, disciplining, firing, twisting policy levers harder, hoping for a more favorable sequence of driving events, tinkering at the margins—these standard responses will not fix structural problems.

In ascending order of effectiveness, the places to intervene in systems are:

Goals: If we can change the function or the purpose of the system, its processes and interconnections and flows will change. Can we change the goals of government to governing less? Ronald Reagan attempted to. Reagan said over and over, the goal is not to get the people to help the government and not to get government to help the people, but to get government off our backs. He changed the discourse about government – testimony to the high leverage of articulating, meaning, repeating, standing up for, insisting upon, new system goals

Paradigms: the mind-set out of which the system—its goals, structure, rules, delays, parameters—arises. Today’s paradigm is acceptance of government. We pay our taxes and tolerate our sons and daughters fighting on foreign soil and coming home maimed, disfigured, traumatized and, sometimes, dead. We put up with the government’s propaganda mill schools. We tolerate the disgusting behaviors of elected officials and the intrusion of bureaucrats into our everyday lives and decisions. We should correct the paradigm to one of non-acceptance. We should treat government, politicians and bureaucrats as an alien, invading, occupying force. We should fight to reclaim our lives and our culture and our safety. We should not tolerate.

Transcending Paradigms: The most powerful way to change systems is not just to shift the paradigm, but to replace it entirely. The new paradigm is no government. It’s what the systems thinkers call self-organization and the economists call spontaneous order. Systems can learn, create, design and evolve. Self-organizing systems can produce heterogeneity and unpredictability. They can come up with new structures through freedom and experimentation, which might include a certain amount of disorder. Self-organizing will be resisted by bureaucracies and education systems and governments who prefer their subjects to be subjugated. But the most overbearing power structure can never fully kill self-organization, because it is a basic property of living systems. A few simple organizing principles – what F.A. Hayek called general rules – can lead to wildly diverse self-organizing structures. Self-organizing starts from the bottom of hierarchies – from the pieces to the whole, from the individual to the group, from the production line to management of production. If the hierarchy is not functioning well from the top down, the solution is to change from the bottom up. If there is over-control from the top, the bottom must become the source of change.

Organization from the bottom up – from individuals, families, neighborhoods, towns, small cities, tax-free enterprise zones, free cities, floating cities, local banks or blockchains issuing their own currencies – can be our new paradigm to replace central government.

Socialism Might Get You “Free” Stuff, But Kiss Your Civil Liberties Goodbye

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A couple of years ago, in a video produced by Red Alert Politics, a reporter took to the streets during Spring Break to ask college students if they preferred socialism or capitalism. It should surprise no one that many of the students believed socialism was preferable to capitalism, as this has recently become a trend in our country.  

However, as we have addressed previously, the students’ answers gave credence to the speculation that many Millennials are unclear as to what socialism really entails.  

Perhaps, the most shocking element of these street interviews was the fact that many Millennials believed socialism to be an ideology that empowers its people. However, nothing could be further from the truth.  

The guise of “democratic socialism” has led many young minds to believe that throwing a “D” in front of a term that has historically represented oppressive governments and bloody revolutions will somehow remedy its reputation. However, there are still many Millennials who know better.   

Whether we choose to refer to it as socialism, communism, or democratic socialism, the fact remains that these are ideologies in which power is concentrated into the hands of a very few politically elite. 

In fact, all these political identities all represent collectivism, where group rights are favored ahead of individual rights. Since civil liberties exist to protect the individual against government abuses, in collectivist governments, civil liberties are the first thing to go because they threaten its very existence. 

Though many view socialism primarily as a set of economic principles where the collective wealth of its citizens is redistributed “fairly” among the people, there is so much more to it than that. It is important to remember that there has never been a nation in existence in which all its citizens agreed with each other unanimously. Our Founders were not blind to this fact, this is why they were specific in creating a Constitutional Republic. 100 percent consensus was an impossible feat, but with small groups of individuals being represented by statesmen who lived among them, they believed this would lead to a government derived from the consent of the governed and one which required the least amount of force. 

Socialism, or collectivism in general, is an ideology that, by its very nature requires massive amounts of coercion. Since the power rests with only a few individuals, the power structure is extremely fragile. If the people realized that they greatly outnumbered those in power, the entire government could be overthrown easily. The former Soviet Union is a great example of this. As such, if collectivist governments want to survive, they have to institute a fair amount of force.  

It doesn’t matter where you are located on the globe, there will always be at least one person, though usually many, who do not believe it is just to take someones hard earned money, and redistribute it others. The power of the individual is, perhaps, one of the strongest forces on the planet. Like a ripple in the water, the action of one can cause a domino effect, where more and more individuals join together. This is why it is so important to control the message in collectivist regimes. 

Collectivist governments have always recognized this, which is why freedom of expression is never held in high value for these types of ideologies. One person speaking out could lead to more and more citizens questioning the legitimacy behind a government that takes what is not theirs and redistributes it as they see fit. In order to convince an entire nation that collectivists policies are the only path to prosperity, you MUST control the message, and squash any message that threatens the existence of those in control.  

If collectivists governments feared the power of the individual in the days before the internet, imagine how much greater of a threat the individual is today.  

Even Sweden, which Senator Bernie Sanders has praised as being a beacon of democratic socialism, has limits to free speech. For example, in order for a publication to be protected under its Freedom of the Press Act, it must be registered with the state. That means that if a publication, not registered with the government, chooses to speak out against something the Swedish government has said or done, they are not protected under free speech laws.  

Millennials in America have been incredibly spoiled when it comes to free expression. Even though free speech appears to be under attack on many college campuses across the country, the United States still enjoys an unprecedented amount of freedom when it comes to expression, which is why it is so important to protect that right. 

If Millennials are serious about wanting socialism in America, they need to take a good hard look at civil liberties under collectivist rule. Though many are drawn to socialism because of the lure of free government handouts, Millennials need to realize that they are trading in their precious civil liberties in exchange for “free stuff.”  

Federal Reserve Economists Don’t Know What Inflation Is. Brazilians and Venezuelans Do, And Only Too Well.

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“At age 10 in 1980s Brazil, my job was to run around the aisles of the supermarket trying to beat adults, who walked around raising prices throughout the day with comically large label guns. Since I was good at math, my mother would hand me our monthly grocery budget, and I would run through the supermarket filling our shopping cart — not having to stop to input values on a calculator saved us precious time against the labelers.” Those are the recollections of Brazilian economist Rodrigo Zeidan in a recent edition of the New York Times.

Inflation Is The Currency’s Loss Of Purchasing Power.

Zeidan was describing what life was like in the hyperinflationary Brazil of the late 20th century. With the value of the country’s currency in rapid decline, the ability to quickly exchange what was losing value for goods that were real and edible was essential to the wellbeing of his often lower-middle class family.  Such is life when there’s inflation. Inflation doesn’t cause prices to rise as much as inflation is a direct effect of a currency losing value such that the prices of most goods and services persistently rise. When there’s inflation, saving logically declines simply because any returns on investment will come back in “money” that is exchangeable for quite a bit less than it commanded at the time that the investment was made. Think about the latter for a moment. It’s an important input to this discussion.

 What Is The Fed Thinking?

Fast forward to the present, a recent report from the Washington Post’s Rachelle Krygier revealed a similar hyperinflationary event taking place in Venezuela. With the bolivar in freefall, business owners are constantly adjusting prices to reflect this brutal reality. Krygier relayed how restaurant owner Freddy DeFreitas, responding to prices of restaurant items that had doubled in a week, “turned to a computer screen and started adjusting the prices of 100 menu items on a spreadsheet.”

Crucial here is that whether in Brazil or Venezuela, what’s just been briefly described is inflation. Plain and simple. What’s sad is that what’s obvious rates a column. But it does, and it does given the desire of modern American economists to redefine inflation altogether.

Indeed, as readers of this column know very well, economists at the Fed no longer view inflation as evidence of a decline in the exchangeable value of the currency. As they see it, inflation is an effect of too much economic growth. Yes, you read that right if you’re new to this column. Fed officials believe that too many people working and prospering is a perilous sign of inflation on the way. But as the sad stories of inflation in Brazil and Venezuela make rather clear, the Fed’s definition of inflation is 100% backwards. Think about it.

A Collapsing Currency Means Too Little Growth, Not Too Much Growth.

To understand why, consider what’s taking place in Venezuela now, and what happened in Brazil in the 1980s. A collapsing currency in both instances was and is the surest sign of slim to non-existent growth. The reason why runs counter to the droolings of an economics profession that grows more ridiculous by the day: to economists, consumption is a sign of economic growth. That’s why real inflation (currency devaluation) doesn’t bother them very much. Since they worship at the altar of consumption, currencies that are exchangeable for less and less are just what the faux doctor ordered for the falling currency stimulating spending right here and now.

We Must Save To Produce, Before We Can Consume. Keynesians Hate That.

Of course, the problem with the assumptions of economists is that consumption doesn’t power economic growth as much as it’s an effect of growth. Obviously. All consumption springs from production first, so if production is the goal, it’s only logical to conclude that the latter can’t happen in ever growing amounts without rampant saving. Yes, you read that right. Contrary to the consensus of economists, the act of saving is the biggest (and nothing else comes remotely close) driver of economic growth. Figure that growth is an effect of production, and surging production springs from savings and investment that enable the creation of more and more goods and services with fewer and fewer inputs.

What all of this tells us is that economic growth is greatest when inflationary pressures are least evident. The economics profession has turned upside down what is simple. As the examples from Brazil and Venezuela make rather clear, inflation is always and everywhere evidence of a currency losing value such that those who have “money” do everything possible to exchange it for something of tangible value as quickly as possible. Why hold onto – as in save – money that will purchase fewer and fewer goods and services? Except that economic growth is driven by the act of saving. Imagine how unproductive we would be, and now primitive our living standards would be, if all of us (and all of our ancestors) relentlessly consumed? It’s no exaggeration to say we’d still be living in caves. It can’t be stressed enough that savings are what make possible the productivity increases that enable the production of more and more goods and services with fewer and fewer inputs.

All of this isn’t to say that economic growth drives down the price level as much as it is to say that economic growth drives down the prices of countless goods and services, thus enabling growing demand for goods and services formerly out of reach. The latter is evidence of rising living standards. When there’s growth, the cost of living declines thanks to copious saving and investment driving productivity increases such that we’re able to attain the necessities of life increasingly cheaply while having the means to buy more and more of what was once well beyond our station.

The Economists’ View That Growth Causes Inflation Is Dumb And Dangerous.

Bringing this all back to the views of modern economists, they should hang their heads in shame. Economic growth causes inflation? Such a view isn’t serious, and is more realistically dangerous. Inflation is easily the greatest enemy of growth for it making the investment that lifts us all a fool’s errand. To understand what is simple, economists should quietly leave their well-appointed offices in order to see Venezuela’s inflation up close, and in doing so, see how wrong they and their biggest employer have long been about the biggest barrier to economic progress of all.

John Tamny is editor of RealClearMarkets, Director of the Center for Economic Freedom at FreedomWorks, and a senior economic adviser to Toreador Research and Trading (www.trtadvisors.com). His new book is The End of Work, about the exciting explosion of remunerative jobs that don’t feel at all like work.  He’s also the author of Who Needs the Fed? and Popular Economics. He can be reached at jtamny@realclearmarkets.com.  

Young Bernie Sanders Proves that Socialism Hurts Productivity

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Many Millennials have been championing the rise of socialism in American politics. With Senator Bernie Sanders leading the charge against free market economic policies, many of these young enthusiasts believe that Senator Sander’s brand of socialism is what has been missing from this country. And even though it is unclear if these Millennials actually understand exactly what socialism means, they still continue to be its most vocal supporters. 

In fact, just weeks ago, a self-proclaimed Democratic socialist, Alexandria Ocasio-Cortez, won the Democratic primary for New York’s 14th congressional district. But given the trend of Millennials loving socialism, 28-year-old Ocasio-Cortez will certainly not be the last.

There are numerous reasons to be opposed to socialist policies being implemented within the United States, especially when we look at other nations who have met with devastating consequences as a result of socialist economic policies being implemented in their respective countries, Venezuela, for example. But among the most common critiques against socialism, there is an ever-present concern that socialism breeds laziness. When individuals are not compensated based on their hard work and productivity, there is no incentive to put forth your best effort. Though many proponents of socialism will scoff at this suggestion, Senator Sanders has proved that work ethic does, in fact, suffer in socialist societies. 

During the 2016 election,  The Daily Wire released an article revealing some interesting facts about the socialist darling of American politics, Senator Bernie Sanders.  As it turns out, in 1971, Senator Sanders was asked to leave a socialist commune because of his refusal to pitch in and help out on the farm. 

In the book, We Are as Gods, written by Kate Daloz, the author tells the story of the rise and fall of the Myrtle Hill Farm, a commune in northeast Vermont. Daloz was raised near the commune, which gave her a unique insight into life on the farm. 

Fitting the stereotypical description of a 1970’s leftist “hippie” commune, Myrtle Hill Farm lovingly referred to its outhouse as, “Richard M. Nixon Memorial Hall.” Additionally, Daloz remembers seeing children marching while chanting, “Ho! Ho! Ho Chi Minh! Vietcong is going to win!”  

In the summer of 1971, 30-year-old Bernie Sanders made a trip out to the commune. As a member of the socialist Liberation Union Party, the young Sanders was on the verge of becoming a rising political figure in America.  As is customary in commune living, each resident and visitor is expected to contribute their “fair” share when it came to working on the farm. However, this proved to be problematic for Sanders. 

Constantly engaging in what Daloz describes as, “endless political discussion,” young Sanders spent more time spouting his political beliefs than actually practicing them. One resident of the farm identified only as, “Craig,” remembers the feelings of bitterness that Sander’s behavior caused others to experience on the farm. According to the book, Craig, “resented feeling like he had to pull others out of Bernie’s orbit if any work was going to get accomplished that day.” 

However, Craig was not alone in his feelings toward Sanders. The farm had a policy that allowed each visitor to stay for at least three days. Though many were allowed to stay longer, Bernie Sanders was politely asked to “move on” after his three days came to an end. 

Since Senator Sanders is currently leading the socialist movement within the United States, this speaks volumes about the movement as a whole. This revelation also doesn’t do much to calm the fears of many Americans who fear that socialism will lead to a decreased work ethic due to a lack of incentives.

Hackers Know More about Consumer Relations Than Governments

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Even those who hold the government in the highest esteem can admit that dealing with agencies like the Internal Revenue Service (IRS) can make just about anyone feel like an enemy of the state.

In fact, the IRS’s track record for customer service is so dismal, one young American found a way to make a little money off of the agency’s incompetence by offering the service of drones to consumers unwilling to wait on hold but more than willing to pay by the minute to have a robot do the waiting in their stead.

However, while the IRS, like just about every other government entity, appears to have been trained to irritate anyone unfortunate enough to be forced to deal with them – which is pretty much every United States citizen – exemplary customer service skills have been exhibited by a rival group of extortionists: hackers.

Pleasant Thieves

In 2014, panic spread throughout the town of Tewksbury, Massachusetts after hackers used “ransomware” in an attempt to extort money.

However, shortly after demanding that the town pay them $600, the hackers followed up with a list of frequently asked questions to ensure that the town was not left grappling with technology they didn’t understand. They also wanted to provide an easy way to pay the ransom online to make the process as easy as possible for their victims.

Sure, extortion may not be the noblest of jobs, but there is no moral difference between state agents demanding tax dollars under the threat of violence and hackers holding a town ransom unless $600 are coughed up. In fact, most ransomware instances involve a much smaller price to pay than what some pay in taxes each year.

What is most remarkable is that the hackers in question demonstrated customer service skills that far surpass any shown by employees of the government. If anyone doubts this, they need only visit their local Department of Motor Vehicles (DMV).

The Government Can Learn from Hackers

Much like how market forces incentivize companies to adjust their practices in order to satisfy consumers, hackers have learned that improving their customer services practices will result in a higher probability that their victims would comply with the demands, instead of trying to beat the hackers at their own game by involving law enforcement.

As such, over the past several years these smooth criminals have upped their game and utilized marketing techniques, streamlined payment options, and even set up call centers that offer technical support to guide the victims through the process.

Americans would be so lucky to expect the same from the government. However, the government has one thing the hackers do not, and that is the use of unbridled force. Hackers can steal data or shut down websites, but if an American refuses to pay taxes, they will quickly find themselves behind bars… oddly enough at the expense of the taxpayer.

This tactic appears to be successful, since the small Massachusetts town and the law enforcement officials assigned to the case agreed that giving into the hackers’ request was a more viable solution than attempting to fight. Luckily, the hackers also offered a data recovery service to help the town in case any information was lost in the process.

James Trombly, president of Delphi Technology Solutions, a Massachusetts-based technology firm that assists victims of hacking commented on this customer service phenomenon saying:

“It’s a perfect business model, as long as you overlook the fact that they are doing something awful.”

Again, there can be no denying that theft of any manner is morally reprehensible, but when comparing the hackers’ crime against the routine criminal acts committed by the state, there is hardly a difference between the two: except that hackers at least make the process of submitting to extortion as easy as possible.

If You Want to Lower Recidivism Rates, Abolish Occupational Licensing

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Every Summer, Americans start caring a little bit more about criminal justice reform. This has nothing to do with any particular current event or an anniversary of some grave injustice; it is because summertime is typically when the Netflix original series, Orange is the New Black (OITNB), releases its new season.

It is easy to ignore issues that we are not faced with personally on a daily basis, which is why, for most of us, it is easy to take an “out of sight, out of mind” philosophy when it comes to our criminal justice system.

However, the popularity of OITNB has led to some necessary, albeit uncomfortable, conversations about our justice system. Among one of the most pressing issues being faced by those who are wrapped up in the system is what happens to them after they are released.

Still Not Free

Since many do not have any formal education, finding employment after being released from prison is a difficult obstacle to overcome. For those unable to find work, many resort back to the activities that landed them in prison to begin with, leading to a perpetual cycle that is hard to break.

Not only will these former offenders be required to check a box on an application that outs them as an ex-convict, they have also been out of the job market so long, they lack the experience necessary to gaining employment.

For those who are lucky enough to be skilled in a particular trade, they are faced with other barriers in the form of occupational licensing laws.

In one of the newly released episodes of OITNB, one inmate is faced with the bitter realities of planning for a future outside of prison. After finding out she will be released from prison in only a few weeks, the pressure to build a life on the outside without any formal education preys on her mind. Unable to master the GED test material, she is encouraged when she realizes she can make a living by doing what she does best–manicures.

She is rejuvenated by this plan and begins to fantasize about opening her own salon and becoming a small business owner. However, that dream is soon dashed as another inmate informs her of all the licenses and permits she must obtain before she can open a business.

Crushing the American Dream

Occupational licensing laws have crushed the American dream, not only for former felons, but also for everyday Americans. This country is supposed to be the land of opportunity, where individuals can make their own way. However, it has now become a nation where government-issued licenses are required before someone can earn a living washing hair in a salon, braiding someone’s hair, or painting nails.

To put America back on a prosperous path that would also potentially lead to lower recidivism rates, it is imperative that we remove barriers to opportunity and reform occupational licensing laws so that those who are willing to work are able to do so.

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