The US: Can a Mixed Economy Be Free

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The US Can a Mixed Economy Be Free?

• Anthony T. Easton
• aeaston_at_LibertyAlliance.Net
• www.LibertyAlliance.Net/economy

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What Does this title mean to you?

• VALUES and BELIEFS
• Libertarian? Liberal?
• Socialist? Conservative?
• Fascist? Independent?
• Democrat? Republican?
• Religious? Non-Believer?
• Man? Woman? Young? Old?
• Single? Married? White? Ethnic?

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The Two Natural Laws

• Personality Morality
• Do everything you have agreed to do
• Do not infringe on another person or their
  property

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OUR AMERICAN VALUES

• INDIVIDUAL RIGHTS
• We Hold these Truths to be self-evident
• Life
• Liberty
• The Pursuit of Happiness

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WORDS MATTER!

• DEFINITIONS
• Freedom
• Economy
• Free Economy (Market-Based Economy)
• Mixed Economy
• Political Economy

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Why Do We Need an Economy?

• MANS WANTS EXCEED HIS MEANS!
• Limited only by his imagination therefore they
  are infinite
• BUT supplies are limited

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ECONOMY

• The mechanism to allocate shortages in a system
  where demand exceeds supply (the real world!)
• Relationship between Consumers Producers
• OR
• Those people who WANT and those who HAVE

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How Do You Allocate Shortages?

• The Two Means of Allocating Shortages in a
  system where DEMAND exceeds SUPPLY
• Voluntary Exchange (Free Trade)
• Including Gifts
• Force (Government corrosion)
• Including Fraud

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ECONOMY

• The natural inclination for man is to be
  economical or frugal
• To spend as little to gain as much of what he
  wants as he can
• ECONOMY only exists in a world of REAL PEOPLE who
  create all sorts of ways of gaining what they
  want
• Some people would rather STEAL than WORK
• ECONOMY really means POLITICAL ECONOMICS

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Political Economics Government

• Government
• The monopoly on the use of legitimate force to
  control a society
• Provides for the safety security of the society
• Legitimate Government Prevents piracy, theft,
  fraud among the individual members of an economy
• Legitimate Government Prevents, punishes
  reduces the amount of force and physical violence
  being used in an Economy among the individual
  players

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Problems

• Who shall control the Government?
• How shall the government be used?
• Danger The Government will use its force to
  appropriate goods produced by others so that the
  rulers may live in ease and with little labor.
• Danger The Government may play Robin Hood and
  take from one group and give to another group

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Market-Oriented Economy

• Characterized by the distribution and spread of
  power, risk money among voluntary participants
• Individual Producers Consumers are free to make
  their own deals without Government force taking
  sides
• Supply Demand not Government regulated
• Capitalism Private Ownership of Money
• Government A Necessary Evil

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Social Norms of Fairness

• Justice The Quality of Being Just or Fair
• Problem Some people WANT other people
  HAVE
• Solution Use the Governments Force to
  take one side against the other side
• Problem WHO is the arbitrator of fairness?

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SOCIALISM

• The system in which the means of producing
  distributing goods services is owned by the
  government which also plans controls the
  economy
• Government is Good Im From the Government and
  Im Here to Help You!

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Capitalism versus Socialism

• Capitalism
• Risk-taking
• Competitive
• Innovative
• Socialism
• Risk-adverse
• Cooperative (who forces cooperation?)
• Unchanging

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Mixed Economy

• A mixture of Capitalism Socialism
• Mixture of private ownership and decision making
  and government-controlled ownership and decision
  making
• Characterized by concentration of power in a
  paternalistic system under the threat of force
• Individual risk is absorbed by the system and
  thereby becomes political risk
• Underlying Philosophy DISTRUST of Competition
  and the Free-Market

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The Soul of the Mixed Economy

• Lies in controlling the financial flows with
  the help of the banking system
• The use of Moral Persuasion Bureaucrats
• The Troika of Power Used to Control
  Manipulate the Economy
• Government
• Treasury
• Central Bank

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The Interventionist

• Treats the ECONOMY as if it were a terminally ill
  patient!
• Creates the illusion Ministering to the
  Economy (a loving metaphor)
• VERSUS
• The reality (force is used on the people)

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Interventionists

• Blame the Economy name the problems
• depression, recession, inflation, stagflation
• instead of blaming the Governments manipulation
  of the economy itself.
• The fault lies in the Governments Failure to
  protect property and in its interventionist
  measures

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San Francisco you are where you live!

• The City owns
• MUNI the bus company
• SFO the Airport
• Electrical generation (Hecht Hetchy) Sewage,
  Water distribution
• Schools Hospitals
• Housing, Libraries, Parks, Parking garages
• Police Fire Departments, Courts
• Forests, Lakes, Pipelines, Ports

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San Francisco Controls

• Zoning
• Housing
• Business
• Licensing Permits
• Restaurants, Liquor, Gambling, Pornography
• Shipping, Ports, Airlines
• Monopoly Grants
• Cable TV telephone
• Gas Electric service

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Government Control Market Manipulation

• Examples
• Silver Price Caps
• Milk Price Fixing
• California ISO Power Operator)
• House Zoning Laws
• Rent Control Boards
• Solar Power Tax Credits
• Regulation The control of PRICES
• The Law of Unintended Consequences

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The REAL Questions to Ask

• How OPEN is the market to all comers?
• What laws, rules regulations hamper entry?
• Can prices change or are they fixed?
• Can wages be set by mutual agreement between
  employer and employee?
• How private is property? Any restrictions?
• How much of ones earnings can one keep?
• Does government subsidize or penalize?
• Are privileged groups exempt from regs?

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Solution The Minimal State?

• Generally-agreed principles by Americans
• Administration of Justice
• National Defense
• Education
• Roads
• Social Statistical Reporting
• Regulation of Natural Monopolies
• Welfare, Unemployment Medical Benefits
• Environmental Protection Disaster Loans
• Space Exploration, and so on and so on

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The Index of Economic Freedom

• Heritage Foundation FREE Countries Ranking
• 1) Hong Kong 1.35
• 2) Singapore 1.60
• 3) Luxembourg 1.63
• 4) Estonia 1.65
• 5) Ireland 1.70
• 6) New Zealand 1.70
• 7) United Kingdom 1.75
• 8) Denmark 1.75
• 9) Iceland 1.76
• 10) Australia 1.79
• 11) Chile 1.81
• 12) Switzerland 1.85
• 13) United States 1.85

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United States Economic Index Scores

• Trade Policy 2.0
• Fiscal Burden 4.0
• Government Intervention 2.0
• Monetary Policy 1.0
• Foreign Investment 2.0
• Banking and Finance 1.0
• Wages and Prices 2.0
• Property Rights 1.0
• Regulation 2.0
• Informal Market 1.5

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Freedom the Free Market

• No such thing as a little loss of freedom
• All Government corrupts the people in power and
  the people under it
• Government left to its own devices grows like a
  cancer (the cooking frog syndrome)
• The best solution Checks Balances (lots)
• Bottom Line If you give Government the monopoly
  on Force, limit it to Legitimate uses only
  National Defense, Domestic Justice

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CONCLUSION

• Any Free Economic System that becomes MIXED
  will Ultimately Become a Socialist Economic
  System
• SOCIALISM doesnt work in Theory or Practice as
  it creates shortages and a ruling class of
  overlords (commissars)
• The Economy and its society - ultimately
  collapses into?

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The United States Can a Mixed Economy Be Free?

• The Answer
• NO!

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My Goal Today

• To Inoculate you against Jargon
• To provide TRUTHSPEAK

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Keywords the Jargon

• Economy
• Micro-Economics
• Macro-Economics GNP, national Income,
  unemployment statistics, price index
• Free Economy
• Planned Economy
• Controlled Economy
• Capitalist Economy
• Socialist Economy

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National Economies

• American
• German
• Japanese
• Russian
• Relative Relationships to other economies
• Relative Relationship to the world economy

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Interventionist Jargon

• Deficit Spending
• Federal Reserve Discount Rate
• Housing Subsidies
• Road Building
• Tax Bonuses
• Industry Regulation
• Consumer Protection Measures
• Fiscal Stimulation

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Roosevelt versus Clinton

• Roosevelt Poverty results from social and
  economic causes rather than failed personal
  morals
• Clinton Providing welfare to unemployed but
  healthy individuals actually creates dependency
  rather that solves problems
• THE MORAL HAZARD PROBLEM