Disinherited: How the Old Use DC to Steal from the Young

There’s a war going on. While there are no bullets being fired, no blood being spilled, and no bodies lying on the ground, there are millions of casualties. You almost certainly know one of them. You might even be one of them.+

What “war” could I be speaking of? It’s one of numbers and laws, accounting gimmicks and misguided policies, false promises and wishful thinking. It’s called “generational warfare,” the act of taking from the young to give to the old, without a shred of regard for the former, and with widespread support from the latter.+

This issue has been on the radar of free-market types for generations. The latest examination comes in the form of a new book by the Manhattan Institute’s Jared Meyer and Diana Furchtgott-Roth, titled Disinherited: How Washington Is Betraying America’s Young.+

There have been many attempts to make this argument in the past, but they often fall flat when it comes to most important point: one of simple accounting. When talking about things like the national debt, it’s easy to get lost in the minutiae of how the national debt and accompanying tax burden will impact future generations.+

This book, however, excels by making this major point both powerfully and briefly, backed by plenty of statistics, before moving on to the myriad other ways wealth is transferred across generations. The authors raise and debunk many “common knowledge” arguments that one encounters when talking to average US Americans about issues of debt and taxation.+

For example, in a distinction that separates the best commentary on fiscal policy from the mediocre, they succeed in defeating the pervasive argument: “I paid into these entitlement programs like Social Security, so I should get my money back.”+

Yet the book is about far more than debt and taxes. It addresses two other notable intergenerational transfers as well: education and the job market. On education, the authors examine both the nation’s mountain of college debt, fueled by student-aid programs, and the failure of public schools to provide quality education.+

Meyer and Furchtgott-Roth explain how teacher tenure laws and restrictions on private and charter schools keep children from getting the best education possible. Their explanation of how firing practices push talented young teachers out the door when school budgets are tight, even as low-performing older teachers keep their jobs, shows how existing laws directly harm the young in favor of well-off older teachers.

Read the rest at PanAm Post…

Small Is Beautiful: The Democratic Advantages of Smaller States

Public choice theory teaches us that the bigger the political entity, the less incentives the citizens have to participate actively and to be well informed within a democracy. Democracy and its advantages should be discussed while taking the size of the democracy in question into account.

During my last visit to Switzerland, I was astonished to learn about the election process of local judges and other public offices, where some local towns and villages elect them by assembling at the local town square and vote. This form of democracy is totally different from a democracy that consist of over 300 million people, as in the case of the United States of America. The citizens of Switzerland know the people who are in charge. They are able to give direct feedback to them in the form of conversations, citizens’ advocacy groups, or in severe cases, social ostracism. These mechanisms are not available, or at least weakened, in the case of the USA, where one member of Congress represents 600,000 citizens (when the U.S. constitution was written the number of citizens represented by an elected official was 30,000). Debates about the merits and shortcomings of democracies would benefit if the size of the state in question would be taken into account.

Social science and statecraft are complicated and their insights opaque. There are no conditions that can be held constant to accurately test the effects of one policy and compare it to another. It had to be learned the hard way that one cannot simply take a given institutional framework that has worked in one context (for instance common law or the rule of law) and enforce it onto a different society and get the same results. Institutions are sticky and are hard to change. This mistake is encapsulated for me by a presentation by the former commander of the US forces in Afghanistan, General McChrystal. One slide of the presentation showed the blueprint for Afghanistan to become a functioning state. This desire for such large scale planning is a Pretence of Knowledge.

Institutions are the result of evolutionary forces and built upon complex foundations. One cannot just simply transfer a set of institutions from one society to the next and expect the same results. That the U.S. has moved private troops out of (and have left numerous private mercenaries in) Afghanistan does not lead to the conclusion that“nation-building” was successful.


Read the rest at Huffington Post…

Here’s how a Brazilian libertarian group is proving capitalism isn’t just a rich man’s game

It’s rather odd that capitalism in the United States is often thought as an economic system that primarily benefits the wealthy. In many other parts of the world, the promise of free enterprise is seen as a godsend by the middle class and poor.

Case in point: the Free Brazil Movement (Moviemento Brasil Livre), a ragtag team college-age kids that has galvanized its South American nation in favor of freer markets and government transparency after a major corruption scandal plagued the current administration.

On March 15, Free Brazil organized the largest demonstration São Paulo has seen since the country’s last dictatorship in 1984, with over 200,000 Brazilians taking to the streets to demand the removal of President Dilma Rousseff from power.

Now the movement, led by 19-year-old Kim Kataguiri, is embarking on a 33-day, 621-mile march from São Paulo to the capital Brasília, following a route the Portuguese bandeirantes took when settling the country in the 17th century.

Lest there be any doubt about mixed motivations behind the movement, Kataguiri is remarkably clear on its goals: “We defend free markets, lower taxes, and the privatization of all public companies.” Citing Milton Friedman, Friedrich Hayek, Margaret Thatcher, and Rand Paul as influences, Kataguiri and his crew are bona fide libertarians. In fact, Kataguiri is even a local coordinator with the international libertarian nonprofit Students For Liberty (SFL), my employer.

Yet, besides receiving free training and a few books from SFL, Free Brazil is a low-budget operation of its own. “Unfortunately, we don’t have any big sponsors,” Kataguiri told The Guardian. “The government and some sectors of the press say that we are financed by rich people. We would have no problem in being financed by rich people.”

Kim himself is a college dropout and the son of a metal worker — not exactly born with a silver spoon in mouth.

Read the rest at Rare…