Wisdom of Anarchy

Libertarian justice reveals the wisdom of anarchy that maximizes sustainable peace and prosperity. We can do better.

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How Government Regulation Makes Us Poorer | Mises Wire

How Government Regulation Makes Us Poorer | Mises Wire

This year, Mises Institute Associated Scholar Per Bylund released The Seen, the Unseen, and The Unrealized: How Regulations Affect Our Everyday Lives.

Source: How Government Regulation Makes Us Poorer | Mises Wire

No truer words. Mr. Bylund states in part:

“Growth and entrepreneurship in a market is not so much about allocating existing resources within the market as it is about speculating about how resources can be created and used in more valuable ways. The market is a creative enterprise always aiming for the future and satisfying more wants and newly discovered wants. Thus, a governmental regulator or central planner has no data to use in making a “rational” plan because the data doesn’t exist yet. That’s the problem with central planning — you cannot plan with only unknowns and unknowables. That’s also why markets are messy, but decentralized decision-making within a profit-and-loss system generates the very structure needed for such decision-making.”

Never having all the data is why all governmental regulation and central planning should be rendered legally arbitrary and capricious. They are always created in hindsight because regulators and central planners fail to, and cannot reasonably, account how market participants are constantly learning and adapting, the context is ever dynamic. Plus, the remedies for wrongs are already available through such basic maxims as the non-aggression principle. Common law interpretations are often an extension of this very principle and have well-served western culture long before the advent of the nation-state.

Regulation and central planning introduces mass inefficiency and protectionism into the market. They cannot sustainably protect those for whom they were purportedly created. In many ways , every regulation is a “one-size-fits-all” approach. By definition, all regulation curtails choice, and this is almost always ultimately at the expense of the middle or lower classes — the politically unconnected.

Even when regulation appears to specifically restrict the rich — think Sarbanes-Oxley Act of 2002; then the 2008 meltdown; and now, the Dodd-Frank Wall Street Reform and Consumer Protection Act and its Consumer Financial Protection Bureau. These regulatory schemes have done nothing and will continue to do nothing in the protection of consumers other than make the associated products and services more expensive or available to fewer people.

In the case of these acts, if banks and financial institutions were not allowed to commit the theft of counterfeiting through legally sanctioned cartelization under the Federal Reserve System and the practice of fractional reserve banking under the protection of legal tender laws, they never would have been “needed”.  There is simply no better regulator than having your own hard money at risk. If these banks were true banks, accountable to their shareholders and depositors, without the protection the Fed and taxpayer-funded bailouts, then again, no regulation would be needed. If more of us would take the time to break it down, then more would see that this supposed protection is not only an exercise in futility, but is actually a barrier to entry for greater market competition and diversity.

And all the while, earned income is redistributed through taxation for the benefit of those who can best afford to influence governmental officials to craft these regulations; then those remaining earned dollars are essentially counterfeited and de-valued again to the benefit of those with early access. And then, the pattern repeats itself until eventually financial collapse ensues.  This constant meddling and repetitive cycles of theft are a significant factors in the boom-bust economic cycle which have afflicted modern economies for well over the last century — not surprisingly concurrent with the growth and development of centralized planning and fractional reserve banking.

Politicians and mainstream economists never talk about purchasing power (rather it’s DOW, job creation, interest rates, etc.), and how the above-mentioned practices have literally robbed generations of families of saved income, or deprived legions of everyday entrepreneurs the ability to better realize an idea, or for parents to spend more time raising their children. We need to first think of adhering to first principles — legally and economically, maximizing the purchasing purchasing power of all should be paramount. This is a merely an extension self-ownership through property rights and a cornerstone of true capitalism – not crony-capitalism.

Ultimately, regulation curtails choice, and choice is nothing other than power. So when you think that governmental regulation doesn’t directly affect you because you are not in that industry or that part of the country, think again. All people, products and services are interconnected. Regulation and central planning does not operate in a vacuum. Those products and services directly affected will ultimately be more expensive, reduced in availability and diversity; thereby decreasing your total choices and value to a wider array of customers.

And, what may be worse?

If these products and services are more basic in nature, then rest assured that other products and services which rely on these underlying components will be negatively affected as well.  It doesn’t take a great deal of foresight to see that the system becomes fouled.

And for what?

For the arbitrary and inequitable redistribution of wealth; all of which is principally directed by government that is ever-nurtured and influenced by special interests primarily paid for by the un-connected working class.

Mr. Bylund makes many more excellent points about regulation and central planning. But more deeply, in searching for a sustainable solution to this sort of oppression, we really need to ask ourselves just exactly how far are we willing to go to solve this systemic dilemma with government. Because simply, government is synonymous with regulation. The problem with just being satisfied with a simple reduction in regulation never guarantees that the tide will not turn once again — to fight the battle again — all for the very same reasons that it plagues us today.

We need more openmindedness to more fully explore what system(s) of governance could provide the services that many think only a government based on force can provide.

And if we fail to find a more sustainable solution than the current structure of representative democracy, then we will be doomed to repeat the ebb and flow of waste, inefficiency and graft that have metastasized and made a mockery of our current system of governance — and the more poorer.

Note:  The views expressed are solely the opinion of the author.
Conceptual and title source: How Government Regulation Makes Us Poorer | Mises Wire
Media source: https://mises.org/blog/how-government-regulation-makes-us-poorer

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Utilities Strip Consumers’ Control Over Energy Bills – Episode 36 of Local Energy Rules Podcast | John Farrell | Pulse | LinkedIn

Source: Utilities Strip Consumers’ Control Over Energy Bills – Episode 36 of Local Energy Rules Podcast | John Farrell | Pulse | LinkedIn

Mr. Farrell, one my favorite renewable experts, quotes Rick Gilliam who says:

“[Solar is] the antithesis of the utility business model and it allows customers to really take control over their own energy future, which is something the utility doesn’t like,” said Rick Gilliam, program director for DG regulatory policy at California-based nonprofit Vote Solar. “It’s a monopoly and it wants to maintain its position as the sole provider of service.”

In response, given the circumstances, I would expect this resistance by utilities (their management and partners in government) on human nature alone.  Where an uncertain change in the status quo can negatively affect the livelihood of the primary benefactors of such monopolies  and their associates, there is absolutely no basic economic incentive to advance change — in this case, more energy choices such as solar. The rules are inherently stacked against disruption for more choice.

So, the solution isn’t just voting for more solar and trying to compete with utilities within their own operational framework. The real solution lays in changing the artificially imposed structure and liaison with government which controls much of the generation and distribution of energy — no small task I admit — but that is the job at hand.

Unlike participants in freer markets, where government intervenes less, where no governmental regulation ensures monopoly, where there is every incentive to please the customer — lest your doors close — utilities are just the opposite. Given these advantages, combined with the fundamental necessity of energy, there is a huge incentive not to change or improve services that would otherwise derail the gravy train. Thus, structural change in the energy market must be demanded by more persons with continued pressure supplied by distributed renewable energy technology — sort of a force-multiplier effect.

Many argue that renewables are absolutely necessary to prevent anthropogenic global warming.  Even if you trust the proponents of this brand of climate change, this is still not the primary benefit of renewable energy, only a spinoff.  The real benefit is that distributed renewables provide the greatest degree of freedom for individuals to potentially provide, maintain and exchange, the most basic component of living and improving one’s well-being: energy.

When you realize that literally everything that most of us do throughout the day requires energy, then you can begin to fathom the liberating effects of individuals creating clean distributed energy, not to mention less geopolitical stress and often war in securing and protecting sources of energy. On an economic level, individual energy independence and diversity are synonymous with all forms of personal liberty and accountability.

These organizational structures, whether it is utilities, or any other governmentally owned or dominated industry will neither produce the best that can be had nor the best value propositions (diversity in choice) for whatever product or service. There is simply not the ever-constant accountability, which imbues free markets (optimally governed by one rule of law applicable to all), to adequately incentivize and distinguish the most creative, efficient, sensitive and best products and services from what can otherwise be developed.

Where the disconnect occurs is that many people feel that there are exceptions for making certain products and services, and that these inconsistencies with fundamental economic rules can be ignored — in this case, personal incentive and responsibility — and yet, they still expect to be provided with ample choice and the best value. Sorry, but sustainably, that’s impossible.

By analogy, it is no different from fixing broken windows and crooked walls in a home with a failing foundation. It makes little sense to replace the windows and cosmetically fix the walls, without curing the real problem — the failed foundation — only to endure the visible symptoms once again.  The same approach must be used in sustainably solving any other problem — which includes modern governance.

However, for the near term, the greater problem is retraining ourselves how to un-learn many of the fictions and half-truths that are perpetuated by either those who don’t know any better, or those with a vested interest in the “status quo” — both are dangerous.

And for that matter, our re-education applies to more than energy, but there is no better place to start , because with energy, it is literally the foundation of everything.

Note:  The views expressed are solely the opinion of the author.
Conceptual and title source: Utilities Strip Consumers’ Control Over Energy Bills – Episode 36 of Local Energy Rules Podcast | John Farrell | Pulse | LinkedIn
Media source:  https://www.linkedin.com/pulse/utilities-strip-consumers-control-over-energy-bills-episode-farrell

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The Failure of Public Schooling in One Chart | Foundation for Economic Education

The Failure of Public Schooling in One Chart | Foundation for Economic Education

Between 1950 and 2009, American public schools experienced a 96 percent increase in student population. During that time, the number of administrators and other staff increased by over seven times the increase in students. This staffing surge still exists today, but the promised benefits are nowhere to be seen.

Source: The Failure of Public Schooling in One Chart | Foundation for Economic Education

 

The source article is a great piece from Daniel J. Mitchell because it succinctly and effectively sums up what is wrong with public education; however, it ends there.

At some point, we need to realize not only that a problem exists, not only that it is severe, but that it cannot in anyway be corrected by or from within the very structure of human organization which allowed it to evolve and survive in a deficient state – in this case, that organizational structure is government – ever subject to the whims of political successors.

No disrespect to the Cato Institute; it produces some fantastic analyses on a broad range of topics. But like most other political think tanks, it fails when the author or another subject offers a non-solution such as:

“Juan concludes his column with a plea for diversity, innovation, and competition… …He’s right, but he should focus his ire on his leftist friends and colleagues. They’re the ones (including the NAACP!) standing in the proverbial schoolhouse door and blocking the right kind of education reform.”

The conclusion is correct in that education would improve from greater diversity, innovation and competition. But then, logic, sound economics and reality were abandoned.  The author then adds where Juan’s focus should be – on the left side of the political spectrum.

Given that public education has been under the direction of both ends of the political spectrum, and in reality usually the combination thereof, this clearly isn’t a solution.

The real problem is government itself – not the people, the structure. As a form of human organization, it cannot systematically and sustainably cleanse itself of virtually any ill whether it waste, inefficiency, or graft. Just look at the 40-year trend in the above graph in cost versus performance versus the number of employees.

It is not a right or left problem. It is a structural problem; one that cannot be resolved by politics – ever. Only the free market under one rule of law positively applied to all persons can provide diversity, innovation and competition in education. If you understand the fundamentals of business, and in particular entrepreneurialism; and then centralizing forces of government, you known that this not opinion – it is fact. More choice is always more power. Government cannot provide real choice.

If you really want broad-based educational improvement, then cut to the chase: get government out of education, and do it now.

Note:  The views expressed are solely the opinion of the author.
Conceptual and title source:  Daniel J. Mitchell from his blog originally published on fee.org. The Failure of Public Schooling in One Chart | Foundation for Economic Education
Media source:  www.fee.org

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