To Ban It or Subsidize It
The Wall Street Journal today had another excellent editorial piece entitled "Canada's Shooting Gallery" by the Americas columnist Mary Anastasia O'Grady. In it, she describes how the city of Vancouver, Canada, pays for a center that will inject the addicts' drugs into them free of charge. Here is my letter to her:
I want to concur in your assessment of Vancouver’s shooting gallery. I traveled to Vancouver recently for the first time, and happened upon East Hastings Street. I have lived in New York for over 20 years, through some rough times such as the crack epidemic of the early 1990s. Yet that left me unprepared for what I saw. Human zombies were wandering everywhere in the middle of the day. People appeared to be inhaling crack from a many-tubed “hookah” that looked like an octopus. Zombies congregated in alleys. It was incredible. I thought of the place as the center of a vortex of whirling bums, drug addicts and prostitutes sucked in from all corners of North America. It was a Mecca of self-imposed human misery, and it was paid for by Canadian taxpayers.
I am completely for legalization of all drugs. If people want to destroy themselves (or enhance themselves with safe mood-altering substances such as alcohol and caffeine which, thankfully, remain legal), it is their right. But the alternative to banning drugs is not to subsidize them. That is the statist solution. A vice is either banned or subsidized. What kind of choice is that? Both answers are wrong. We either lose our liberties, or pay for others’ vices. Lost in this false alternative is individual liberty, where people are simply left alone to live their own lives, productively or not, as they see fit. Reality is punishment enough for drug addicts. Only a minority of people will choose that lifestyle because it is so self-destructive; their numbers are further reduced through early death. Subsidize that? It’s insane.
By the way, apart from
But that is another discussion...
Published on 8/30/07 as letter to editor in Wall Street Journal by the non-pseudonymous me.
Monday, August 27, 2007
To Ban It or Subsidize It
Sunday, August 26, 2007
A Technology-Based Future
Have you ever wondered what Man can achieve? Take a look at these Predictions for a Technological Future. Futurist Brian Wang makes plausible predictions based on technological trends in computing, nanotechnology, materials science, energy, communications and space flight. He provides timelines for each of them.
There is nothing to hold man back from achieving these or similar inventions. Today's world would be barely conceivable science fiction to the 18th century Founding Fathers of our country. Yet, the unleashing of the human mind that was their political achievement has made a fantasy world real. If the philosophic foundation of our country can be re-built, there will be no limits to man's achievement.
I am optimistic. Even if Man must endure another Dark Ages first (which will not happen; that is my prediction), man will:
- Use gene therapy to enhance human intelligence
- Use the earth's magnetic field to cheaply catapult ships into space
- Artificially grow human organs
- Double his lifespan
- Develop an economy off-earth larger than the economy of Japan
- Fly scramjets that will carry cargo 10-20 times the speed of sound
Philosophers, win the battle for reason, and the world of the future will be ours.
Saturday, August 18, 2007
"Helicopter Ben" is the nickname Federal Reserve Chairman Ben Bernanke reportedly got for a comment he once made regarding how the government should aggressively use monetary policy to prevent a recession. Emphasizing that the key point is to inflate quickly to avert a crisis, he said the government could simply drop money from a helicopter to stimulate the economy.
Federal Reserve chairmen like to fly around in helicopters. Maybe that's their problem. By attempting to manage the money supply from their helicopter vantage, the Federal Reserve fails to see the real action of the economy on the ground. As a result, they make bad decisions. They add too much money or too little. They act too early or too late. The result is an exacerbation of booms and busts in the economy. The booms become unreal, and the busts too severe.
In 2003, the Federal Reserve lowered the interest rate at which it facilitates bank loans to an unprecedented low of 1%. In those years, we saw tremendous investment in real estate and a boom in real estate prices. The excess investment was stoked by cheap credit for mortgages available from banks. Variable interest and interest-only loans keyed to the artificially low federal funds rate enabled homebuyers to bid ever more for larger houses. Easy 100% or more financing enabled those who hadn't saved for a down payment to buy houses on the bank's credit.
Artificially cheap money had led to a flood of financial capital becoming available for mortgage lending by the banks. Lend they did, at terms that did not reflect the true financial risk they were undertaking. Such artificially supplied cheap money is inflation. When the Fed realized that its inflation of the money supply led to inflated asset prices, it tried to limit the damage by tightening credit, eventually raising the bank interest rate to a recent high of 5 1/4%. Now, the reverse process is happening. Over-extended borrowers are defaulting, credit is tightening, and the economy is poised for a slow-down.
All of this is the result of managing monetary policy from way up high in helicopters. How do we bring monetary policy down to earth? The only way to do this is to privatize money. Instead of the Federal Reserve, a sole, legal monopoly issuer of money and credit, all money should be issued by private banks. Private banks do not operate in helicopters. They operate on the ground. They understand the specific financing needs of particular borrowers. They assess their ability to extend credit based on the creditworthiness of the borrower, and on their own availability of funds.
The supply and demand conditions of money and credit that the banks respond to are the real economy. If a new technology creates promising new business opportunities, the banks lend to those businesses. If a regional downturn reduces creditworthiness, they extend less credit. All the time, the banks lend with a view to protecting their own balance sheets and maximizing their own profit. This grounded action by private banks will result in the most efficient deployment of financial capital possible.
Does it mean the end of booms and busts? That is a question I am not sure of, but I think it may not. Nevertheless, the booms and busts that will occur will be shorter in duration and less severe. More importantly, they will reflect real economic events, not artificial changes of the money supply by the helicopter money monopolists.
Monday, August 13, 2007
[WARNING: "PLOT" SPOILERS FOLLOW]
The face of reason confronts Dark Age primitiveness. That summarizes Infidel, the autobiography of Ayaan Hirsi Ali. The face of reason is hers, the beautiful, intransigent face that appears on the cover of her book.
Ms. Ali was born in
Rejecting the primitiveness of her background, Infidel is the story of Ms. Ali’s personal unfolding, and her discovery of the Western values of free speech, the right to one’s own life, and religious freedom. By the end of the book, Ms. Ali declares herself an infidel, since she rejects the Islamic faith that she grew up with. She rejects all religious faith. Step by step over the course of her life, Infidel shows her make the conclusions that brought reason into her life.
For that, for the ideas she publicly stated as a member of Parliament in
Today, Ms. Ali lives in the freest country on earth, the
UPDATE OCTOBER 2007: Ms. Ali has left the United States after the Dutch government, which had been paying for her protection, stopped doing so. Apparently because Ms. Ali is a Dutch citizen, the U.S. did not take up the slack and offer her protection. By returning to Holland, Ms. Ali can presumably once again be protected by her country.
Question: Has the U.S. government ever spent taxpayer money to provide security protection to this foreign citizen? You can see him on the right side of the picture holding hands with our President. That man is Prince Abdullah of Saudi Arabia. If a double-standard does exist, could it be that the U.S. government is unwilling to protect someone like Ms. Ali, who is an "infidel" and denounces Islam, while offering protection to our "ally" who financially and morally sponsors terrorism against us? Ms. Ali is our ally and the man walking with the President is not. Until we learn that, and it becomes the basis of official government policy, we are gravely at risk. Islam's persecution of Ms. Ali and her flight from this country is a metaphor for what we all face until we gain the wisdom and courage to defend our values.
Thursday, August 09, 2007
The Businessman's Hall of Fame
The New York Times, without intending it, has published the businessman's hall of fame. By ranking these great business figures in order of the wealth they created, the NYT has allowed us to honor the greatest businessmen of the past 200 years, ranked by the measure of their achievement.
Wealth is the measure of the businessman, for what is wealth than the measure of the value of the products he has made? Wealth comes from profit, which is the difference between value received for a product less the cost of manufacturing it. If consumers everywhere pay more for the personal computer or the Model T Ford then it cost to make it, that difference is an objective measure of the value created. If the product is so popular that millions of PC's and Model T's are sold, then millions of customers have benefited from the entrepreneurial ingenuity of the businessmen.
I honor the wealthiest businessmen. They are those who have created the most beneficial, useful, enjoyable products that all of us enjoy. Hats off to Bill Gates (the 5th wealthiest) and Warren Buffett (the 16th wealthiest), for making the software for the fabulously useful personal computer on which I am writing this, and for providing capital to America's most efficient companies, respectively. Hats off to John D. Rockefeller, the leader of the Hall of Fame, who created the modern oil industry, the seminal industry that continues to fuel our industrial economy.
Hats off to all of the Hall of Famers. In a future world, we will see sculptures of your figures in a real world Hall of Fame. Schoolchildren will learn your stories, and emulate you, and some of them will add themselves to your august glory.
[Hat tip to NoodleFood for the link to the New York Times article.]
Wednesday, August 01, 2007
What Should We Do About Global Warming?
[The following was my reply to this interesting post. I am re-posting it here.]
The big problem with the AGW (anthropogenic global warming) argument is that it is used by those who hate capitalism to attack capitalism. Whether it is true or not, the argument has been seized upon by those who want to throttle industrial activity by restricting the most fundamental underpinning of our standard of living: the combustion of fossil fuels.
The combustion of fossil fuels provides most of our electricity, heats our homes, and powers our planes, trains and automobiles. Restricting the burning of fossil fuels (by whatever mechanism, such as a "carbon tax") means that all of these activities will be more costly, and will happen less. Our standard of living will fall. That is undeniable.
Now, whether it is moral to sacrifice our standard of living to prevent AGW is not a scientific issue to be addressed by atmospheric scientists or geophysicists or any other "hard" scientists. It is a philosophical, economic and legal issue. That is where Objectivism comes in.
If we assume that AGW is a reality (and a serious one, at that), I contend that it is not a governmental matter. However, "we" should absolutely do something about it. This means that each of us, if we live in a coastal region, should absolutely gradually build up seawalls and embankments to handle the projected 2 foot increase in sea levels that will occur over the next century. It means that "we" should make sure our air conditioners are in working order to handle the couple degree increase in temperatures we will gradually experience over the next 100 years. It means that those of us who are investors and farmers should consider, sometime over the next century, buying valueless land in
It means that we should continue using our free time -- a consequence of our high standard of living, which itself is a consequence in part of having cheap energy that comes from burning fossil fuels -- to research cheaper and better ways to make electricity, air condition our homes, grow crops, develop new medicines and forms of entertainment. In other words, each of us -- using cheap energy and the high standard of living it makes possible -- should use our minds to enjoy our lives, and in so doing, create new technologies that propel our standard of living ever higher.
This ascent of man is itself in part a function of cheap energy. Such ascent is hamstrung by restrictions on that energy that make it more expensive, in order to prevent our atmosphere getting hotter by a couple of degrees and our sea levels from rising by a couple of feet over many decades.
This is the context of the AGW argument, and why those who hate capitalism have gravitated so enthusiastically to it. They see the AGW argument not so much as an "environmental" issue, but rather as a way of attacking man and industrial civilization.
They are right. The AGW argument *is* being used to attack man and industrial civilization. This is not to say that scientifically understanding whether AGW is true, and how severe it is, is not important. Getting a handle on the concretes is important, and does bear on what we should do about it. However, it is unlikely that any scientific understanding of the problem will show that it is of such a magnitude that it merits *governmental* intervention, and the concomitant reduction in our freedom and standard of living.