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As a side point, the review that says this isn't Mises's best book is correct. Socialism and Human Action are both MUCH better. Readers looking for a short book that covers the basic topics might want to read Economic Policy. If you are interested a discussion Nazism and Fascism, Omnipotent Government may be more up your alley.

1. Division of Labor
2. Stable Money
3. Price System
4. Lex, Rex ~ "rule of (uniform, abstract) law"
5. Natural Rights legal philosophy
6. nulla crimen, nulla poena sine lege ~ "no penalty without law"
7. basic principles of the Common Law:
   1. stare decisis
   2. right of property
   3. right of contract
   4. responsibility for tortious action
8. transferance of power by democratic process
9. limited government:
   • use of coercive power of government solely to prevent coercive acts by others
   • actions bound by the law

These are the traditional British/American institutions on which all of modern western civilization is based. Starting in Prussia in about 1850 a reaction against these institutions developed. Since then they have been attacked and seriously undermined by adherents to those reactionary views. Unfortunately, those views seem to dominate the public perception and are simultaniously presented as "traditional" and as "progressive".

It may be instructive to consider some of the relevent literature. Good starting points would be Mises's Socialism and Hayek's Constitution of Liberty. Mises's latter book Human Action and Hayek's follow up to Constitution, Law, Legislation, and Liberty are also relevent, but between Socialism and Constitution, the vast majority of the relevent works will have been cited.

Refering to Leonard E. Read's I, Pencil?

.
You mix some truths with boogey man stories and scare tactics - making it hard for people to discern whether you know what you're talking about or not.

http://www.econlib.org/library/Enc/MoneySupply.htm l

http://www.mises.org/story/1837

We can thus conclude that the key-determining factor in the setting of US interest rates is the amount of US excess money supply. Over time this excess is predominantly driven by the supply of money, which is set in motion by the Fed's monetary policies. In this respect the Chinese factor is completely irrelevant as far as US interest rate determination is concerned. So if the economy were to fall into a recession on account of a bursting of the housing bubble we should blame the Fed for that and not falsely point the finger at China.

the fact that demand for oil equates to the demand for US buck (an artificial link maintained by the US through its unbelievable military might)

Pardon? "Unbelievable Military Might"? In the research I do, it's all "currency of choice", no one's being forced to trade for oil in USD. I know the company I work for merely *chooses* to price our products in USD for convenience. I think you've got your economics ass backwards. You should be relating the power of the dollar to the supply of oil. The more powerful the dollar, the more drilling there is for oil, the more oil there is for everyone else. The opposite also holds true. (http://www.mees.com/postedarticles/oped/a47n33d01 .htm - http://moneycentral.msn.com/content/P100650.asp) ...and of course oil being used so intensively to GENERATE products and deliver them to market, the lack of availability and high price of oil itself could cause bad things.

The way in which oil/USD *might* be linked is that if everyone else stops using USD for oil right now and the link between USD deflation and oil availability is severed it means that more resources will be available to drill for oil and more oil (should) be available. Which will actual DECREASE the economic problems.

Totally fallacious.

What you're overlooking is that the time and money spent to replace that window, had it not been broken, would have been available for other pursuits.

Real Actual Scientific Studies(TM) have shown that greater income does not mean greater happiness.

Basically, once you get above the poverty line, how you spend your time plays a much greater role in your happiness than how you spend your money. i.e. You really can't buy happiness.

Strangely enough, some people have become incredibly wealthy doing this. A lot more have become ecstatically happy.

Performance of the Gold Standard

As mentioned, the great virtue of the gold standard was that it assured long-term price stability. Compare the aforementioned average annual inflation rate of 0.1 percent between 1880 and 1914 with the average of 4.2 percent between 1946 and 1990. (The reason for excluding the period from 1914 to 1946 is that it was neither a period of the classical gold standard nor a period during which governments understood how to manage monetary policy.)

http://www.econlib.org/library/Enc/GoldStandard.ht ml

Down the Down Escalator

Sometimes I wonder what the "state" is. There is this guy, George Bush, who in many ways runs the state, but my statist friends hate him. The state must be something else. It could be Louis XIV, of course, because he said as much "l'Etat, c'est moi!" But my friends don't really think Louis XIV was the ideal form of government. What is the answer? What is the state?

I am proud to say that I have found the state: It is Cherrail Curry-Hagler, of the DC Transit Police. The story comes from the Washington Post (July 30, 2004). The facts, (remarkably) are not in dispute.

About 6:30 p.m. July 16, 2004 Stephanie Willett, EPA scientist, age 45, was riding the escalator down from 11th Street NW to the subway station, and eating a "PayDay" candy bar. Cherrail Curry-Hagler, D.C. transit policewoman, was riding up on the other escalator. Officer Curry-Hagler warned Willett to finish the candy before entering the station.

Willett nodded. But she kept chewing the PayDay as she walked through the fare gates. Curry-Hagler, who had turned around and followed Willett, warned her again as she stuffed the last bit into her mouth before throwing the wrapper into the trash can near the station manager's kiosk, according to both Willett and the officer.

Curry-Hagler ordered Willett to stop and show ID. Willett refused, and retorted "Why don't you go and take care of some real crime?" Admittedly, this may be seen as rude, since her mouth was still half full of PayDay bar. The scientist rode a second escalator down to catch her Orange Line train.

At this point, according to Willett, the officer grabbed her and searched her, running her hands under Willett's bra and around her waist. She put Willett into the back seat of a police car, took her to the 1st District station, and locked her in a cell. At 9:30 p.m., after she paid a $10 fee, Willett was released to her husband.

Got it? Okay, now consider:

1. Ms. Willett was on a DOWN ESCALATOR. She couldn't turn around.
2. She was already chewing the candy bar. She couldn't spit it out, without littering. I'm a libertarian extremist, but even I think you should be given a ticket if you spit chewed-up food on a public escalator.
3. When Willett got to the bottom of the escalator, she put the last bit into her mouth, threw the wrapper into the trash can, and continued on toward her train.

There is no way that Ms. Willett could have obeyed the instruction not to eat in the station, unless she had run back up the escalator, or spit out the candy bar. The difficult part, for the "let's have the state be our nanny" tribe, is this: Given the laws on the books, Ms. Willett had committed a crime. You can't take food into a station, and you can't eat in the station. It's the law. The officer had not, in fact, abused the system; Ms. Curry-Hagler, and all the other Transit Police in DC, are supposed to keep their gimlet eyes peeled for offenses exactly like these.

You think that's wrong? Fine. But don't blame Cherrail Curry-Hagler, D.C. Transit cop. She was simply doing her job. So is the TSA employee who makes my kid take off his shoes at the airport and who makes me show my boarding pass four times. So is the cop who gives me a speeding ticket for going 38 in a 35 mph zone.

Is there an alternative to these zealous examples of pettiness? Sure. We could give discretion to bureaucrats and the police. And that is a ticket on the train to tyranny, folks. Discretion allows the representative of the state to indulge racism, or sadism, or blankism. That won't fly (and it shouldn't!) in a democracy. So we are stuck with legislation that must be foolishly blunt and mindlessly enforced. It is the nature of law, not a perversion of it.

Read more...

Well, the alternative is to have a government that realizes its populace doesn't pay attention to it, so it goes ahead and does whatever it wants (which, for as much as it seems like the U.S. govn't does this, even with something like our Terri Schiavo case, fundamentally our age-old system of checks-and-balances prevented the theocrats that seem to have taken over our govn't from imposing their will on Schiavo - i.e., our system still mostly works, despite the heavy-handed and politically-advantaged attempts to flout it).

You know, like the famous quote "the price of liberty is eternal vigilance"?

Better that than governments which allow relatively high unemployment rates, etc.

We on this side of the pond laugh at Europeans for having governments which do things like regulate the curvature of cucumbers. (then again, we have some local/municipal laws that are almost as goofy, e.g. one in Florida which says one may not take a shower naked)

Still, in a way, I agree with you; there's too much politics on Slashdot and in most of the rest of the country too. I often wonder how much time we waste on politics that could've been spent doing something else more productive (or fun)... :-/

Economists still tend to be, ahh, skeptical of his "gold bug" tendencies. In fact, we'd call anyone else who said the same things a crackpot.

Are you sure he's much of a "gold bug" though? Unabashed gold bugs (like Austrian economist Mark Skousen) would suggest just the opposite. (which is just as well, IMO, as I'm no gold bug either... but then, WTF do I know, I'm just an Econ. minor, heh (though I often wonder if I should've made it my major when I started university, rather than CS)...)

IMO, Friedman really has 2 personalities when it comes to political economy (i.e., his normative economics) - his idealist side, and his practical side.

His ideals are pretty clearly more libertarian than classical liberal; he once said in an interview in Reason magazine that he'd "like to be a zero-government libertarian" (like his son, David), but when asked why he wasn't one, he noted that it's not feasible.

But in practice -- when he's suggested alternate ways to fund public education (via a public/private choice using vouchers, even though his ideal is to completely privatize education), when he's suggested that the Fed be run a particular way (even though his ideal is to dismantle it), when he's suggested (as in (IIRC) chapter 9 of Capitalism and Freedom) that we do actually need some sort of social safety net (for which he proposed his negative income tax) -- some of the less-sane, more-extreme libertarians, e.g. Rothbard, criticized him as being a "statist". But really, his practical suggestions (which he sees as leading in the direction of his ideals) are more classical liberal than libertarian in nature. Hence the sometimes-confusing dichotomy...

Unlike in Friedman's ideal, I don't see the Fed as a terrible institution, despite some of its mistakes, such as their failure to elect a replacement chairman in the late 1920s after Benjamin Strong died (as my Monetary Policy prof. once described to us and to which Friedman partly attributes the exacerbation of the Depression). The ability to control inflation by controlling the money supply is awfully valuable, when it works (though given housing prices lately, I wonder what the *actual* total inflation rate is, rather than the more-often reported CPI of (currently) about 3%).

But then, given that I've lived only a few years longer than through the Greenspan era and given that he seems to be described variously as either "lucky" or "skilled" (skill which doesn't necessarily follow in other Fed chairmen), my view is probably colored by their relatively very good performance of the last 20 years. I didn't live through the Fed's failure before and during the Great Depression, nor did I even live through the stagflation of the 70's...

I could really use some seed comments at the website :)

I'll see what I can do, when I get the chance... :)

Given my fairly-limited sphere of influence though (of all my friends I talk to regularly, only 3 are politically and economically-interested: 2 are libertarians and 1 is a borderline socialist (nevermind the fall of the Berlin Wall, etc.)), might I also suggest making your blog's presence known on a few other econ. and/or law-related blogs:

* EconLog -- Arnold Kling (MIT PhD) writes there and regularly gets a fair number of comments

* The Becker-Posner blog -- the Gary Becker and judge Posner blog...

* Bradford DeLong's blog -- not a classical liberal or libertarian. But a lot of people seem to read his so-called "reality-based" blog, so in the name of garnering traffic to yours, it might be

Economists still tend to be, ahh, skeptical of his "gold bug" tendencies. In fact, we'd call anyone else who said the same things a crackpot.

Are you sure he's much of a "gold bug" though? Unabashed gold bugs (like Austrian economist Mark Skousen) would suggest just the opposite. (which is just as well, IMO, as I'm no gold bug either... but then, WTF do I know, I'm just an Econ. minor, heh (though I often wonder if I should've made it my major when I started university, rather than CS)...)

IMO, Friedman really has 2 personalities when it comes to political economy (i.e., his normative economics) - his idealist side, and his practical side.

His ideals are pretty clearly more libertarian than classical liberal; he once said in an interview in Reason magazine that he'd "like to be a zero-government libertarian" (like his son, David), but when asked why he wasn't one, he noted that it's not feasible.

But in practice -- when he's suggested alternate ways to fund public education (via a public/private choice using vouchers, even though his ideal is to completely privatize education), when he's suggested that the Fed be run a particular way (even though his ideal is to dismantle it), when he's suggested (as in (IIRC) chapter 9 of Capitalism and Freedom) that we do actually need some sort of social safety net (for which he proposed his negative income tax) -- some of the less-sane, more-extreme libertarians, e.g. Rothbard, criticized him as being a "statist". But really, his practical suggestions (which he sees as leading in the direction of his ideals) are more classical liberal than libertarian in nature. Hence the sometimes-confusing dichotomy...

Unlike in Friedman's ideal, I don't see the Fed as a terrible institution, despite some of its mistakes, such as their failure to elect a replacement chairman in the late 1920s after Benjamin Strong died (as my Monetary Policy prof. once described to us and to which Friedman partly attributes the exacerbation of the Depression). The ability to control inflation by controlling the money supply is awfully valuable, when it works (though given housing prices lately, I wonder what the *actual* total inflation rate is, rather than the more-often reported CPI of (currently) about 3%).

But then, given that I've lived only a few years longer than through the Greenspan era and given that he seems to be described variously as either "lucky" or "skilled" (skill which doesn't necessarily follow in other Fed chairmen), my view is probably colored by their relatively very good performance of the last 20 years. I didn't live through the Fed's failure before and during the Great Depression, nor did I even live through the stagflation of the 70's...

I could really use some seed comments at the website :)

I'll see what I can do, when I get the chance... :)

Given my fairly-limited sphere of influence though (of all my friends I talk to regularly, only 3 are politically and economically-interested: 2 are libertarians and 1 is a borderline socialist (nevermind the fall of the Berlin Wall, etc.)), might I also suggest making your blog's presence known on a few other econ. and/or law-related blogs:

* EconLog -- Arnold Kling (MIT PhD) writes there and regularly gets a fair number of comments

* The Becker-Posner blog -- the Gary Becker and judge Posner blog...

* Bradford DeLong's blog -- not a classical liberal or libertarian. But a lot of people seem to read his so-called "reality-based" blog, so in the name of garnering traffic to yours, it might be

When one big multinational corporation is the only game in town, no, there is no such thing as a labor market. One word: WalMart.

Exactly right - screw labor, and screw the environment. "Burdensome", you say, as if the regulations exist simply to burden the noble capitalist.

As we well know, without regulations, corporations would continue to dump their shit wherever they please.

Say, you wouldn't be an Ayn Rand fan, would you?

The notion of level playing fields and fair competition is, as you well know, total bullshit.

If I knew anybody in the business, I would. And they would agree with me. Air travel is unequivocally safer now than it was before deregulation. Accident rates during the twelve-year period from 1979 to 1990 (after deregulation) were 20 to 45 percent below their average levels in the six or twelve years before deregulation.

As for Chapter 13 filings, bad and/or inefficient companies go out of business while efficient companies continue and expand. Its called "capitalism", and its a good thing. Surely you're not advocating a return to direct government subsidy of airlines?

well, you can take that up with milton friedman, champion of neoliberalism. it's his example.

ultimately, i think you're stretching the concept of property rights a bit!

An example of a REAL free market, win-win situation is if I have a house for sale for $100K

yes, that is a "real win-win situation"... but, again it doesn't include externalities since, by definition, externalities have no direct effect on price. did you read the wikipedia article?

Well, you might wanna check out the Wealth of Nations, by Adam Smith. Thats pretty much the economic bible equivelent of K&R C.

Andy Mukherjee, a Bloomberg columnist wrote this article; to paraphrase their argument "Yes, [they argue that] disasters can generate economic growth so long as they are predictable and frequent. Every time annual floods or hurricanes levels a house or factory or some other physical capital, the replacement usually involves some technological improvement, which is good for economic growth.".

To which one blogger on Mises.org responded "Would he argue that beatings administered to economists can do them a world of good, as long as they are predictable and frequent? That way, their old and broken hypotheses can be beaten out of them and replaced with newer, better hypotheses."

The problem is that when you buy a ladder, a large portion of what you are paying is only necessary because of BS lawsuits. A company doesn't have to lose a suit for it to cost them money.

Companies who follow your "We don't need insurance" plan will end up out of business after losing one lawsuit. They won't have the insurance company fighting for them, or helping with the costs of paying off that suit, and if they lose just one large suit, then their business is gone. So they can't just say "No, we're going to skip that" without risking their business.

There are now no ladder comanies based in the US. The BS liability laws have raised their costs too far. And this happens in many other industries.

You seem to think I'm defending the insurance companies, which simply isn't the case. I'm arguing against our present liability laws.

Here's an article with some info and numbers on various industries.

Inflation cannot be held in check. That $30,000 home your parents bought is worth probably over $150,000 today, when you are your parents age that will probably be 1.5 million.

The equation is remarkably simple:

things to buy = money to buy them with

Increasing the supply of money changes the number of units of money required to buy the same stuff. Making new stuff drives prices in terms of a fixed money supply down. Fiat money issued by a government that keeps printing it is the source of rising prices.

Sadly, socialism, even in limited forms is part of a slippery slope to totalitarianism. Read The Road to Serfdom by Friedrich von Hayek. Even more stunning is Socialism by Ludwig von Mises because it was published in 1922 in German. Mises warned about the dangers of socialism and he was ignored.

Anyone who argues that ([New tech]->[Fewer jobs])->([New tech] = bad) should read on the infamous Bastiat's broken window fallacy. Why unemployment rates are high is a complicated issue, but before starting Luddite wars, nations (including the Americans) need to raise level of education. ( Remark: I don't believe in tales about a Harvard graduate unable to find a job. On the other hand, I believe in stories about the dumb people who are unable to manage their credit and whine that noone wants to pay them $100k+/y)

Well, economist Joseph Schumpeter came up with the theory of "creative destruction". In short, every now and then, a new innovation destroys the old economic model (think TiVo or, in the retail field, think Wal-Mart). The capitalist society comes up with a new way to respond to that innovation. In the case of TiVo, it appears that they will now have pop-up ads. In the case of Wal-Mart, you now see Sears and KMart merging. However, TiVo started the revolution, and now they are trying to take a step backwards. Unfortunately for them, there is a good chance the revolution is about to pass TiVo right by.

What does that do for the Advertisers? Well, they better figure something out, otherwise, their economic model completely falls apart. In a capitalist society (which the US claims to be), it is up to the advertisers to figure their way out of this mess. If the advertisers don't figure it out, you'll see less money flowing to the TV networks and, a potential reduction in TV show budgets. Now, wouldn't THAT be a disaster! Those overpaid actors and network executives would start losing money. Oh well. If Hollywood isn't providing me with dumb entertainment, my entertainment dollar will go elsewhere.

Creative Destruction. It's time that advertisers re-read their college economics textbooks. In short, I don't care about the advertisers, nor do I care about how the networks make money. In our economy, their problems are not my problems.

What I really like are blogs that give real information - not the kind of populist watered-down news you get on TV or the newspaper.

For example, check out these blogs by actual economists...

Marginal Revolution

Cafe Hayek

EconLog

Ben Muse

When you're dealing with multinational corps for services, socialism lets you get maximum buying power and save money.

Lets who get maximum buying power?

Even if it is true true that socalist enconomies are more efficent when dealing with monopolistic corporations (and I would dispute that), the fact that their muiltinational has nothing to do with the effectiveness of socialism vs. capitalism. In a free market, a U.S. company can price gouge you just as easily as one from China. But of course that's a good thing, because it also means that the Chineese company can undercut the U.S. company if it's prices start to get out of line.

Or were you just using the term 'multinational' as a cheap way to appeal to the hard-core lefties in the audience?

Either way, history has already shown the inherient flaw in socialism: Whenever economic decision making is centralized in the name of "efficiency" the decisions that are made eventually wind up benefiting those in power the most. Find out who's getting the contract to wire the city and I'm sure you'll find it holds true in this case. Power corrupts...be that power economic or military the result is the same.

There are numerous other examples. One that I find particularly striking is Ludwig von Mises. First of all, his works consistently advocate the very economic freedom that Graham talks about as a necessary pre-condition to creating economic prosperity. And his book Socialism: An Economic and Sociological Analysis was first published in 1992 in German. He certainly saw it coming and said so.

Solid comment coward! I'd like to add that there is another way in which wealth seems to grant the wealthy a special logic that disconnects them from the world of work: the way 99% of us "create wealth" is by going to work every morning. Russell Roberts a frequent contributor to the library of Econonmics and Liberty whose interview with Lawence Lessig has been reported in /. also had this to say about sending that work abroad. I don't give a s__t about some fat capitalist's theory of wealth creation, even while dreaming of being rich myself, if it means I am out of a job. In the disconnect that you describe, I am seeing a connection: The same minds [Roberts] concern themselves over a corporation's rights to a person's ideas as concern themselves over obtaining cheap labor regardless of social costs which are not born by the corportation.

That's called a "fairy tale". Governments (which are really just gangs of hoodlums dressed in suits) are very clever at hiding their true nature behind claims of good intentions.

Governments, like businesses, are always manned by actual people with their own selfish motivations. The study of their motivations in a government context is called Public Choice Economics.

By recognizing that governments operate under the same motivations as businesses, you have a much better chance of predicting the outcome of a policy.

Making this change would involve no government intervention, other than changing the current rule. This would incent the current holders to get off the space. What it wouldn't do, is turn into a windfall for the federal government who wants to collect auction dollars. Which is, of course, why no politician will ever suggest it. But it is, IMHO, the most effective way to encourage the transition to digital TV.

While I'd like to take credit for this idea, I can't. Someone WAY smarter than me came up with it:

Perhaps one solution would be for the FCC to hold another auction. In the new auction, current license owners could put their spectrum up for sale, and the spectrum could be bid on by new or existing owners. Once the spectrum has been re-auctioned, it could be used for any purpose, and it could be sold at any time.
- Arnold Kling

An interesting and insightful (but somewhat dated) analysis (by the late Robert Eisner) explaining why a large federal debt might not actually be that bad may be found at http://www.econlib.org/library/Enc/FederalDebt.htm l.

...ah, uhh myocardial infarction

Actually it makes sense. Check out Adam Smith's Wealth of Nations. Either we try to support a dinosaur (RIAA, CD's) or we embrace the future (iTunes).

Think about it... let services go where they do best. It's the underlying principle of free trade and it must be followed in order to ensure we don't pay a lot for this muffler. (?)

Probably most of you whine about how we don't do enough to help the poor, and then here are some hardworking guys in foreign countries struggling to pull themselves out of their poverty, and you want to close the door on them.

Go read Adam Smith's "The Wealth of Nations , and you will discover how trade barriers simply impoverish both sides of the barrier.

Stop thinking of just your own greedy selves, and think of the welfare of mankind. Think about how it shouldn't have to matter what country a man is born in, he should have the same chance in life regardless.

Shame on you all.

Oh, and yes, I am biased, because hiring Russians allowed me to start my own company without any venture capital (Namesys), and I am a perfect example on a small scale of how globalization is making the US into a corporate headquarters location for the globe.

And yes, I am sitting around in the US doing the menial labor of running tests on the code my guys write for my US customer at its site because I could not get visas for my guys to come here, when I could be designing the next product instead.

I don't see how Americans becoming specialized in being the entrepeneurs of the world is such a bad thing.

Here's what we should do:

Every 10 years, the ownership of available spectrum is divided up in shares across all citizens. 1 citizen, 1 share.

Then they go to town with it- there's a gigantic market for spectrum.

At the end of 10 years, do it all over again.

End result: Everyone gets access to spectrum. People can choose to give spectrum to causes they believe in, or they can sell it to the higher bidder, or hell- just use it themselves or their own causes.

This creates a price signaled market, and also puts cash into everybody's hands, which is good for the economy.

t doesn't really matter - they're both unacceptably bad. Although Reagan's deficit was larger as percentage of GDP (GNP, then), eg. 6% in 1983, vs. Bush's 5% of 2004 GDP, -$500B in 2004 brings us to something like $8.5T of debt

Holy christ, I can't believe the shit they gets modded up around here. Ok, Reagan ran up a huge amount of deficit because he engaged in deficit spending. However, do you realize how BAD America's economy was before Reagan? You might remember that is the last time we had a TRUE liberal in office (Clinton was a centerist). If you think Reagan commited some crime by deficit spending and saving our economy, I suggest you read up a bit on Keynesian Economics

There are blogs I read regularly, and they are in some ways similar to slashdot. The blog points out things of interest, and sometimes allow comments.

Some interetsting Blogs: Seth Godin's Blog

Poor and Stupid

Marginal Revolution

EconLog

so instead the American corporation Walmart opens stores across Canada (you do know we have Walmarts here, right? The idea of Canadians driving to the US to go to Walmart seems pretty bizarre),

Not when the WalMart in the US is 40 miles closer to the town in question than is the one in Canada. And yes, I know there are WalMarts in Canada, but you do know that that's not the issue, right? The tax you pay when you go home to Canada is.

which we fully allow

...except in Vancouver, for example. But that's not the point, either.

and patronize,

Your choice, remember. I normally choose not to, BTW.

and yield millions across Canada which they drive back home. Hardly seems equitable, does it?

Do you mean when you compare it against what Irving stations in America and your other exports (salmon, for example) bring back to Canada? And how much corporate tax and other fees does WalMart pay in Canada?

As a sidenote: Back in the 90s there was a HUGE "problem" with cross border shopping, and that was when the Canadian dollar was in the mid-60s. Canadians went to the US for more selection, and because in the end it still was less expensive.

"The economies of Canada and West Germany ... experienced brief booms when tax rates were reduced in 1988 and 1989 respectively, but Canada slipped into recession in early 1990 after reversing course with surtaxes and a new sales tax." Source: "Marginal Tax Rates" by Alan Reynolds US border towns boomed during that period because US sales taxes were significantly lower. Soon after, Canada made up for this "problem" in large part by increasing import taxes.

Since then, however, global distribution means there is virtually no selection advantage, and the rate of inflation in the US has far outpaced Canada -

Whether distribution is global or not makes less difference to sales volume than does the amount of overhead costs, including tax burden.

US inflation rate 2002: 1.6%
Canadian inflation rate 2002: 2.2% (est.)

Source: CIA Factbook - I'm open to a better reference, if you have one.

Now even with an appreciated relative dollar, American consumer goods are jus ridiculously expensive.

...when you add the Canadian taxes, surcharges, and fees, yes.

Trade between us is not the issue, my friend; it's the taxes on that trade that is. (At least it seems that way to me, after visiting New Brunswick for the past 40 years.)

I'll refer to the research of the Economic Policy Institute about the minimum wage.

I'll see your policy wonk think tank and raise you 1, 2, 3 4 5. I'm sure you could do the same. Once you get beyond the simple laws of economics (like supply and demand) to more complex theories I challenge you to find any two economists that really agree with each other. "If you put two economists in a room, you get two opinions, unless one of them is Lord Keynes, in which case you get three opinions." - Winston Churchill

Don't overuse the simple model of supply and demand, especially when issues like pricing, competition, floors, and perception are involved. The most useful models are far, far more complex.

The reality of course is far more complex than a simple graph of supply and demand. Unfortunately I don't see any evidence that any of the multitude of competing, contradicting complex models put out by a wide array of economists are any better. As I said economics is NOT really a science, they try and I think there is a good body of fundamental, basic insights into the basic behavior of economies. But as economic models become more complex the more controversial they are, there is no consensus aside from intellectual fads that wax and wane over time. Polls of economists over the years seem to indicate a great deal of agreement on the basics (like the law of supply and demand AND it's application to the minimum wage and price controls generally) while there is no agreement on the complex theories that purport to trump those basic rules. ("when done 'right', under certain conditions, at this time but not this other time, please forget that my last economic forecast was utterly wrong - I can explain that" etc. etc. etc.)

In any event even the complex models that attempt to show price controls on labor as being an exception to the basic rules of supply and demand that the vast majority of economists would agree apply to every other commodity are valid only at the margins. Perhaps a slight increase in the minimum wage would have no ill effects but I think even the most liberal economist would agree that an outrageous increase (say to $100 per hour just for an extreme example) would have a bad effect on employment. Where then is the cut-off, or the tipping point where the advantages for the poor outweigh the disadvantages? Is there even such a tipping point or does the ill effect just get smaller until it is masked by the various other effects that are also operating on the unemployment rate (or just easier to explain away as being due to other factors). If President Clinton raised the minimum wage marginally during a time of economic expansion and nearly "full employment" would we even notice the ill effects (unemployment was low, but would it have been lower still)? Would raising minimum wages during the early stages of a jobless recovery see the same absence (or masking) of ill effects? Would raising the minimum wage from $5.15/hr to a "living wage" often asserted to be $14/hr - well over double the current rate - have the same non-existent or negligible ill effects?

I think the basic laws of economics are fundamentally sound and underlie the immense complexity often masks them and provide numerous APPARENT counter-examples. I have no such confidence in various complex theories that attempt to show that these counter-examples are themselves the rule rather than the exception and that we can now ignore the old fundamental rules.

Do you know of an example where protectionism been successful in the long term? It's been used many, many times. The result is always less competition. Doesn't protectionism, by definition, means you're protecting (coddling) an industry? The topic has been illustrate well in satire: The Candlemaker's Petition.

The justification of a protectionism is always that it'll have some general benefit to society, but it's always really a hidden transfer of wealth from consumers (who would otherwise pay less for the protected good) to local producers. For example, costlier steel (because of tariffs) doesn't help America, it just means our cars cost more.

P.S. I'm just as opposed as the next guy to corporate welfare.

Do you mean the USA or California? You couldn't buy a hovel for $200k in Santa Clara, but that'd afford a large house in Georgia. Regardless, don't you think it's asbsurd for someone with as many luxuries as the average American to complain about the cost of living? This is the wealthiest place in the wealthiest time in history.

I complained myself until my wife and I got serious about tracking our budget, and I realized how much we spent on DVDs, video games, soda pop, broadband, cell phones, beer, and a hundred other costly trifles. Once we cut that crap out of our budget, saving for a home downpayment was smoother sailing.

My point is that griping is the wrong response to outsourcing. If the tactic of the American programmer is to complain instead of compete, he's doomed. No amount of government protectionism will defend a stagnant industry from being passed by.

Our situation as programmers is not unique to history. The steel industry has the most obvious parallels. Complaining about India's low standard of living will lead us down the same path as complaining about "dumping" lead the US steel industry: otiosity.

No. Running up a defecit is not Keynesian economics. Running up a deficit either during a slump or to encourage a slumping sector/industry is called Keynesian Pump Priming. Keynesian economics is a complex economic theory practiced by many economists today. Keynes was a visionary in the field of economics whose theory would later help to explain many of the economic irregularities present in the 70's and 80's around the world. If you learn economics from an undergrad-level text, you're generally learning from Keynes and those who refined his theories.

Proponents of USF will point to the benefits to schools and poor people. But what of the unseen? What was not purchased because of these fees? What job was not created because a product was not bought? What medical invention was not created because the job was not found?

There are millions of dollars of wealth given to people or organizations who could probably obtain the service if they really wanted to. Rural people already pay less in rent than city folk. Poor people have other choices for being in communication with others. When was the last time that calling the police stopped a crime in progress? Do we really need subsidized 911? Government schools were having trouble graduating kids that can read before the internet was mainstream. Do we really need subsidized computers in the classroom?

If the services this fund provides are so important, wouldn't people be willing to donate to the fund voluntarily? Wouldn't people be willing to provide something in exchange to have this service? It's not a market failure when people don't act on your ideal. That's called a failure to persuade.

Let's honor the right of people to set their own terms for talking. Don't force the issue through an agent with a gun. Keep VoIP free of regulations, fees, and taxes.

here is an article that explains it better than I could. Econ 101 stuff.

And deficits definitely do affect unemployment - they create jobs, at least in the short run. Here's an article which explains how, in a concise, readable way, if anyone is interested. The bottom line is that deficits are good during a recession (to be paid off later, when the economy improves). Even Bush calls his deficit spending a jobs package. Unfortunately, tax cuts for the rich give the least jobs per dollar of any form of deficit.

The problem now is that the Fed has lowered interest rates about as low as they can go, and the job market is still sluggish. It's true that Clinton never had to deal with that, but that doesn't excuse Bush for failing to create jobs with his bogus "stimulus" package.

LOL this link is better, anyway :-)

This link is better.

If you want to know about the chilean guy who was behind this, and what he is up to now, check this article.
For those of you already complaining about how a bloody coup thwarted this clearly great idea, please read that article. It is very politically biased, but it shows how this guys ideas have evolved over time, and I would dare to say he wouldn't think of building such a clearly useless system now.

A system like that cannot take individual human actions into account, it cannot deal with subjective market decisions, it cannot handle human relations. A professor at Universidad de Chile (the one the submitter mentions) told us about this system years ago, and how it seemed to be such a great idea for managing coal production (for example)... until it had to deal with a coal miners strike...

If you want to know why such a centralized system will never be useful check econlib, you might learn a thing ot two.

By the way, I'm chilean.

As for licensing, there's many a good reason to do so. Anywere were quality, or safety issues rein (would you want an unlicensed doctor operating on you?). They also exist (licenses) because amateurs have ruined it for others (few bad apples...barrel...you know the rest).

A careful analysis of licensing's effects across a broad range of occupations reveals some striking, and strikingly negative, similarities. Occupational regulation has limited consumer choice, raised consumer costs, increased practitioner income, limited practitioner mobility, and deprived the poor of adequate services--all without demonstrated improvements in the quality or safety of the licensed activities.

The ACM's position on the licensing of software Engineers is that licensing - even for safety reasons - is neither effective nor desirable. A similar perspective on licensing in general may be found here.

http://www.m-w.com says that the term goes back to 1877, but the first appearance in print of the word capitalism was in the novel The Newcomes, by William Makepeace Thackeray, 1854.

I thought the Communist Manifesto may have preceeded that, so I quickly scanned it, and there are several references to Capital, and Capitalists, but no "Capitalism"

This site backs that up, showing what appears to be entries from the OED (which is a paid site, so no linky) for it and a few more 'isms'

BTW, here is an interesting article on Capitalism. I doubt that it will change the minds of any true believers, but I'd encourage all to read it.

Wait a minute, who am I kidding? This is /.

In economics, fascism was seen as a third way between laissez-faire capitalism and communism. Fascist thought acknowledged the roles of private property and the profit motive as legitimate incentives for productivity--provided that they did not conflict with the interests of the state.

In economic theory, local phone companies are a natural monopoly, and Blockbuster is not.

That link provides an incomplete definition. A natural monopoly is a "market [that] can support only one firm at the most efficient size of operation", ie. the most efficient size of the firm is the size of the market.

Phone companies are a state monopoly, not a natural monopoly. They weren't even given a chance to compete, so we don't know if they would be a natural monopoly. There was fierce competition in the railroad industry before regulations stepped in oh so many years ago, yet by your argument it would be terribly innefficient to run parallel rails and thus railroads should be a natural monopoly (which history shows is not the case).

Here in Canada, we have Rogers and other smaller chains competing fairly well with Blockbuster, so I doubt it's any kind of monopoly at all.

Adam Smith (L-ECON) would not be happy with Adam Smith's (D-WA) manipulation of the free market through the passing of artificial governmental regulation.

You can argue Open Source and not lose. It can be like the argument for Democratic, Free Market, Open Societies; these are things that can not be easily contended, when debated in a forum open to Peer Review. It is difficult to overcome the fact that even Microsoft has gone Open Source with its largest clients. Microsoft Operating Systems ARE Open Source to NATO, the Chinese, British, & Russian governments; governments demand it -- there are reasons for this.

Trust & Security:
The principle of Trust Services is based on Peer Review. You cannot be Secure without Trust in your Systems. Peer Review is an incarnation of Adam Smith's Invisible Hand. Without Peer Review, what kind of Government do you have ? What kind of System do you have ?

Flexibility:
Milton Friedman's theories on "The Role of Government in Education" & how to introduce flexibility into school systems, could be employed to solidify the point that there is merit in Systems designed with Flexibility in mind. The fact that Open Source solutions run across all levels of computing, from PDA to Supercluster, should be sufficient to quell any questions regarding its Flexibility. [ref: YOPY & SGI Altix 3000]

Support:
Peer Review & Peer Support are very similar.

Cost:
IT'S FREE !!!

You may ask your foe: Why would you want to implement a System model based on central planning & subject yourself to countless regulations, restrictions & licenses ? [ref: MS EULA & how it changes] What would Hayek say about that ? Is that not "The Road to Serfdom" ?

This may also be a good time to reference Hayek's "The Use of Knowledge in Society".

Yeah. Just what we need. It's not enough that we have the PATRIOT act, Microsoft, the RIAA, MPAA and DMCA, Microsoft, a bunch of stupid old executives who want nothing more than to increase their bottom line at the expense of all the little guys because they also enjoy screwing people over because it gives them a power trip, and Microsoft... all we need now is to have an advertising mogul put our private information all over the Internet in order to screw us up some more. BIG COMPANIES SUCK!!!