Liberty Alone

From back in 2002.

Of course, its not just money which is given out, but subsidy in the form of infrastructure, regulation, licensing, IP laws, economic intervention, trade restrictions and a whole host of other intervention.

I think Farmer’s Markets are great. Not because I shop at them much (I find them too expensive), not for environmental reasons (I don’t buy into the whole ‘food miles’ thing - its a very bad measure of environmental impact), but because its entrepreneurial.

Producers and organisers have seen a gap in the market and have gone for it, often with great success.

There is a large constituency of people who for whatever reason like to shop at farmer’s markets.
When I occasionally shop at one its due to products that supermarkets don’t provide (the apple juice we used to get from the now closed local market was fantastic and the apples were just as good and cheaper than the supermarket).
Others like the aspect of it coming fairly directly from the producers, other buy into the environmental argument and many people probably have their own reasons or combination of reasons.

Whatever the reasons, Farmer’s Markets have (re?) discovered some things which people value and are willing to pay for (in money and time and travel) and hopefully making themselves a profit.

The essential thing is to keep innovating. Supermarkets and other shops have seen some of the things which farmer’s markets have been doing and adopted aspects, farmer’s markets must adapt to these changes. It will probably mean less profit (as occurs with every entrepreneurial effort after others adopt the methods) so new ideas will need to be tried.

Wit and Wisdom has a pretty good post on Prince Charles and his ‘War on Climate Change’.

Whilst I disagree with a small part of the post, the main thrust is how I think we should approach environmental challenges (and combined with the party’s Green Taxes it makes even more sense).

The main thrust is that we shouldn’t be promoting hair shirts, but we should be promoting the advantages.
So, conserve energy and we save money. Use less oil and we save money and resources. Recycle and we save money and resources.

I’d add that we should be paying people to sort out their rubbish for recycling. That way we can tell if something is worth recycling (ie do its benefits outweigh its costs) and the only way to do this calculation is through the price mechanism.

For more subjective things, like seasonal produce being more interesting - that is not for the government to say, it is purely subjective, but non-governmental organisations can promote that if they wish. Not everyone will agree, but you can promote the idea and probably convert more people to the cause.

Which is worse for the evironment?

Which do you think takes a bigger toll on the environment, owning a dog, or owning an SUV? My bet would be on the dog. I’m thinking of all of the resources that go into dog food.

I agree, it probably is the dog.

The comments point out that a dog has many positive side effects, people enjoy having dogs. What they miss is that the SUV also has many of the same positive side effects, people like their SUVs and sports cars.

The argument that a dog extends human life - from a strict look at the environmental impact alone works against the dog. Increased life span leads to increased emissions. This is not the point though, we are primarily concerned with human well being (most people are, outside a few misanthropic hardcore greens).

This highlights two things, firstly, as we already know, a lot of environmentalism is romanticism and anti-technological puritanism.
Secondly, and more importantly for policy makers, everything involves a trade off. The externality which is some forms of pollution occurs because there are no property rights associated with some things (and I find it difficult to see how to assign them). If property rights could be assigned or a substitute (Pigouvian taxation usually) then people will make value judgments on these trade offs. Many will accept the ownership of an SUV even with the higher costs. Others will move to more fuel efficient vehicles. Some will give up keeping pets, others will keep them even with higher costs of food.

The liberal must accept these value judgments. They may not be the same as yours, but it is not the place of another to interfere in the value judgments of others.

One of the achievements of the Austrian school of economics is the analysis of the business cycle. Mises developed the initial theories and Hayek expanded upon them.

However, the Austrian theory is concerned with capital goods, money and inflation but leaves out land. In contrast Georgist theories of the business cycle include land, but fail to incorporate those aspects which the Austrians include.

in the light of this there are now attempts to combine the two into an Autro-Georgist (or geo-Austrian) theory.

This predicts a real estate boom-bust cycle of about 18 years, which is born out by historical data. The last housing bust was in 1990, so we are right on target (with the US having already felt some of the effects).

Its an interesting idea, which combines two economic theories which have both had profound effects on liberals and individualists over the years.

Update:
I’ve come across a more thorough exposition of the theory here although I haven’t had the chance to digest it yet.

How often do you hear criticisms of the free market, claims that we are living in an era of laissez-faire, that markets rain supreme?
Its something I come across frequently.
Its lesser heard cousin is that laissez-faire or classical liberalism failed in the 19th Century.

Both are absolute nonsense. We never had a laissez-faire system. Even in the heyday of Manchester Liberalism the state still intervened in the economy. Perhaps we were in a situation where the gains from freer trade created more of a boost than the hindrance of intervention, war and imperialism, but it certainly was no laissez-faire or even classical liberal order.

Today we live in an era of vast economic intervention. Corporations depend on the state for their existence, rent seeking is rife. Privatisation is now largely an exercise in extending state control over private business and allowing the state to run things more efficiently.

The only difference is that we are not so exposed to the intervention as we were in the 70s say. Instead the interaction is between us and business and then business and the state in its varying forms.

Even setting aside the argument as to what is the preferable system, this is a gross distortion of the facts.

Today’s Mises.org daily story has more, along with a brief (and insufficient) attempt to attack the assumption of the beneficial state.

I’ve been thinking about money. What makes it special? How should it be thought of?

I’ve come to the conclusion that we should just look at it as a commodity just like any other. The only thing special about it is its what we use to assign price to commodities to ease our interactions and to quantify relative values and utility.

I think this makes many things fall into place remarkably easily (in my layman’s thinking anyway). It eases thinking about prices from a methodological individualist view (that is recognising that decisions are made by individuals not by some collective entity - that is how liberalism thinks of society).

It also hints at the need for stable currency - inflation being the increase in prices, or decrease in the marginal value of money which can be caused by an increase in supply over demand (note: this does not in itself advocate a commodity or fiat money system)

I don’t know what economists think of this idea, but it seems a sensible way to think of things to me.

I’ve just seen a hint at an idea which is very interesting.

There is an important debate amongst economists starting in the 1920s with Ludwig von Mises’s critique of socialism. This is the Calculation Debate which brings an argument that the socialist economy cannot allocate resources and the calculations needed are not possible. Personally I think this is settled against socialism, at least in the case where we have a non-static economy. Since for the improvement of the situation of people we need a non-static economy and the fact that not everything can be controlled, I think this debate shows that economic socialism is not possible.

A student of Mises, Murray Rothbard, it appears, took this idea further and showed that this economic calculation problem sets a limit on the size of corporations. Anyone who has worked in a large organisation knows that diseconomies of scale really do come into effect. Its interesting to see this outline of an economic argument as to why this happens.

Why then don’t small businesses run rings around big corporations? The answer is that government intervention and regulation favours the big, established concerns.
Like much taxation, regulation costs those with lower income a greater portion of their income. Regulation increases startup costs, big business has more resources to devote to lobbying politicians.

Contrary to what many think, it is not the free market which gives big companies the advantage, it is the lack of free market which panders to them.

I’ve just read an interesting article from the Journal of Liberal History about Arthur Seldon, a founding member of the IEA and at the time Liberal activist. In those days, the IEA was seen as a Liberal Party front by some sectors, the Liberals embracing economic liberalism which was at the party’s core from the very beginning.

Its a funny twist that the party which kept economic liberalism alive throughout the 20th century, when both the Conservatives and Labour parties favoured the corporate state now treats any talk of economic liberalism as dangerous Tory-talk, despite the fact that the Tories never embraced economic liberalism and have now fallen back to their default state of corporatism and entrenchment of privilege.

Interesting snippets concern the fact that there was a debate in the 1960s within the Liberal Party about education and health vouchers, and Beveredge being concerned about the way the welfare state was starting to take over the non-governmental means of support which had developed.

Its sad now that vouchers are a taboo subject in the mainstream of the party, being used as a slur in the recent leadership election, and the consensus is to try and keep the governmental near-monopoly (a real monopoly for the poor) on welfare.

We could learn a lot from looking back beyond the 1970s and 80s when it comes to the party’s economic position. I wonder whether the party as a whole actually still supports free trade, let alone the more radical proposals from the party’s past.
Economic liberalism should be central to any liberal program, it originates as an attack on privilege, we need to rediscover those aspects and promote them, recovering economic liberalism from the other parties who have perverted it to try and entrench privilege or give favours to their preferred supporters.

I hope the party will rediscover the Liberal heritage in economic liberalism, there’s some signs that things will move in this direction, at least the debate is starting to be had.

Over at Charlotte Gore’s blog Matthew Huntbach launches yet another attack on markets in education.

This time he fails to understand the difference between the pressure to achieve centrally set targets and to provide services (or products) people desire.

He says:

The reality is that school teachers actually feel under intense competitive pressures to do whatever it is to drive their schools up the league tables, and this is having a negative rather than a positive effect on education.

I agree that teachers are under pressure to push the school further up the league table. However, this is pressure to conform to outside imposed targets. In a market, the pressure is to create what people actually want, not what some government department thinks people should want.

The current situation is like trying to meet this month’s quota for tractor production. Its an arbitrary target which has little to do with what is actually desired or needed.

In a market the pressure is to produce something which enough people want to make it worthwhile. So whilst some people want tractors, they will want different things from their tractors. Different companies can specialise in different types of tractor, or they could divert their energy and capital to the production of a different type of farm machinery for which there is a demand.

Thus, competition is driven not by government targets and trying to do best at them, but by the demands of the customer, and the customers are not a homogeneous group with the same desires and expected outcome.
Schools would then be able to specialise. Some people may prefer a school which gets very high grades at GCSE above any other considerations. Others may prefer a school which has a broader focus, or which specialises in a particular subject area. There are any number of considerations.

If I look at my experience. I was lucky enough to go to a private school (thanks to sacrifices by my parents and later the generosity of charity, the school and my own savings). The reason my parents were willing to pay so much? Because the local schools would not have given me an education which was suitable for me (and they were both teachers in the borough so they knew this very well).
When looking at schools, the one we chose was not chosen over exam results, it was chosen because of the whole atmosphere and ethos.
I assume other pupils and parents preferred the other school for their own reasons.

Of course, the school did not suit everyone, there were several people who did not respond well to the academic atmosphere (despite being very intelligent). They would have benefited from an even greater choice of schools.