What is the answer to Detroit?

I was watching a show Forgotten Planet and one particular episode caught my attention. It was an episode on Detroit, its heyday and its demise. For a long time Detroit was seen as the industrial mecca in the US, turning out automobiles, steel works, mining operations and one of the country's best school systems. But all of this was to come to an end in the wake of economic policies and disastrous government programs. Detroit now sits in ruin. So what would it take to return this city to the forefront of production and the ability for its citizens to prosper? Is the answer to just get government out of the way?

In an article written in 2013 Patrick Barron makes his case for a "Free Detroit".  His idea is to rid the city of all regulations and all taxation. Barron asks, "What if Detroit became a free city in which government provided for public safety, honest courts, protection of property rights, and little else? Might not unabated free enterprise take hold as it always has in America?" adding next, "All that Detroit really needs is economic freedom and secure property rights. Give Detroit its freedom from all manner of government, including the federal government. Declare Detroit a free city. (You can rest assured, Detroit, that America will come to your rescue if those bloodthirsty Canadians attack!) In other words, no one would pay any federal taxes whatsoever or be subject to any federal regulations whatsoever. Wouldn’t it be nice not to pay federal taxes, not even Social Security and Medicare taxes? Do the same with Michigan taxes. No taxes BUT also no federal or state aid either."

How can they have it both ways? You cannot allow zero taxation and have a funded government, even miniscule government compared to the current model.

The rest of the article reads pretty much how one can envision any free marketer article going. Cooperative experiences between citizens without the need for bureaucratic red tape, restrictions licenses, regulations and of course the end to the state sponsored welfare state.

All of these things are in line with the thinking of most Laissez Faire proponents, and of course with most who are familiar with the great Henry Hazlitt and Ludwig von Mises.

What Detroit has become is, in large part, due to the enormity of its city government, the State Government and helped along by the Federal Government. Programs that were meant to help the poor or working poor were in fact reducing them down to a life of dependency, and of course when the government finally runs out of other people money to give away, catastrophe ensues. The lesson to be learned from its fall is that there is such a thing as too much government.

But what is the answer to get it going again?

As Mr. Barron states it may lie in doing the complete opposite of the cause.

In response to Barron's writings on Detroit Chief Investment Officer of Universa Investments LP Mark Spitznagle writes, "Detroit can correct its past public-sector ineptitude and abuses by unleashing the private sector’s vast potential, rooted in the metropolitan region’s vibrant entrepreneurial and manufacturing culture, skilled workforce, and a robust technology base nurtured by world-class institutions like the University of Michigan. The city’s position on an important border crossing and access to an enormous fresh-water supply from the Great Lakes, not to mention the business community’s unrelenting support, enhance its prospects further."

Echoing the late Murray Rothbard, such a collapse “is the ‘recovery’ process, and far from being an evil scourge, is the necessary and beneficial return, says Spitznagle.

I think Detroit can be the greatest study of if and how free market and Austrian economic principles and policies can work. Whether it succeeds or fails will be the greatest milestone in the sake of accepted economic means to ends.

Tahmooressi and the Border Issue

The latest battle between political parties and their followers and pundits is the issue of Borders, Securing those borders, Immigration and Amnesty. It has in the past few months become the most visible topic by candidates, commentators and political junkies alike. The story of ex-US Marine Sgt. Andrew Tahmooressi has reignited this issue and has left myself with more than enough questions to the idea of borders and the sincerity of either political party and their adherents to the motives of their stances. The idea of borders, definable lines arbitrarily drawn on maps and fought over, has consumed the airwaves.

As always, the issue is made to be seen as only two options. Pro Immigration and Anti Immigration or Pro-Amnesty and Anti-Amnesty. The first option is to allow amnesty to persons already in the country "illegally" and the second is to continue deportation and criminal charges against those living in the United States borders without having gone through the immigration process, the "legal" way as they call it. The line these two beliefs draws is apparent and approachable by yet other paths. The history of immigration into the United States is riddled with laws, regulation, restrictions, hate, fear, death and hypocrisy. Beginning the Idea of America on the act of Immigration, Genocide and Conquest doesn't lend well to the history of immigration into this country and the resulting years and decades since the first Illegal Alien stepped foot on American soil. If we were to respect borders of any countries our military armaments would rust and its soldiers be taken back to private employment. If one reduces this issue down to its base it is a belief that one person may have say over the movement of another, this is to say that one person holds rule over another, or that any government have the right to restrict travel in any way.

We have seen wars fought over land, deaths in foreign countries in the name of this land and a new breed of bigots and hypocrites arise from the simple act of movement and travel around the globe. The mainstream accepted idea on immigration is to subject other human beings to tests and health restrictions, to perform up to certain levels, to curtail freedom and to allow themselves to be robbed of wealth in the process. Every year hundreds of people die in an effort to reach "The Most Free and Most Prosperous Country in the World". They die in their attempt to reach a land that promises freedom and prosperity, they die for a lack of freedom to enjoy a better life, they die for a lack of freedom to move about the earth unhindered and uninhibited. The act of Legalized Immigration is an act of barbarity and exclusivity.


To say you believe in the closing of borders, demarcations of land used in exclusion by one government entity, You have not only barred any entering of outside persons but have also confined oneself to the same rule. You have created your own prison.

The economic theory behind the want of closed borders is this. As more and more immigrants come into this country they will, without fail, turn and send these American dollars outside of our borders. In a proper understanding of Economics this isn't seen as a negative as any country that bars it's currency from foreign circulation fails to have that currency to buy products from the foreign markets. If this theory were to hold water, countries would have difficulty acquiring goods from foreign markets for lack of foreign funds. Now one might say to convert these currencies would be the answer and to reduce trade to currency exchanges and money manipulation. There is also the prohibition of allowing workers into trades within a country. Lower skilled workers who enter into a foreign marker make much lower wages, while this is seen on its surface as a negative, is actually a positive. Lower wages equal out to lower costs and in effect lead to lower prices. "Let's look at the problem of immigration from another angle. There exists a market demand for low-skilled cheap labor. Part of this demand is being met by outsourcing of jobs overseas. The rest is met by vast numbers of immigrants coming to this country. Illegal immigration is the market supplying a demand. A demand is being met and satisfied. When viewed this way, how is this a problem? This triumph of the market is not in itself a problem." says Wade A. Mitchell

Now to the Hypocrisy Part.

Ex-US Marine Sgt. Andrew Tahmooressi sits in a jail cell in Mexico for this very act, and the hypocrites on every side of the political aisle are in fervor for his release and an escape from the very laws they seek to impose on their own borders. The Marine, who had been visiting friends had supposedly come upon a border crossing station and checkpoint run by the Mexican Federal Government. Tahmooressi alledges to have informed the guards that he had registered weapons in the vehicle and had just made a wrong turn. Enforcing their own laws the border agents arrested Tahmooressi and the ensuing battle over his release has brought a new wave of nationalistic border builders and wall wishers. Whether Tahmooressi had or had not meant to cross into Mexico and whether or not he informed them of his weaponry, the Mexican Border Agents did the job of upholding their national law. This law may not be agreeable to me but it is to those that wish to "secure" the US's borders in the same fashion. It is hypocritical to say that a man from America should be released from custody yet scream and push for the same actions from your own border agents and administration.  This is the real gap in reasoning I see in the issue.

The gap in this is the face of the issue, subjective value and nationalism. Nationalism, to believe that the nation of your residence is befitting a higher status and therefore more rule over any other. The Subjective Value to reduce a mans worth and the worth of all others to the geographical location of their birth. The happenstance of birth in any place of the world  does not predispose one to a higher place in the world or a higher rule over others. It should not be seen as a benefit or hindrance where one is placed on the earth and it should not be restricted or inhibited in any way to any place he wishes to travel.

The issue of borders can best be seen from afar. Space. In the pictures of earth from above there are no borders, there is only earth, all of us together, all of us combined in this experience.

Minimum Wage Law

The Minimum Wage hurts both businesses and workers alike in that it takes away the right of them both to come to mutually beneficial terms of employment. Below is a recent conversation I had with the Manager of a local grocery chain. As I explain how the minimum wage laws hurt the contracts between company and workers, it also fails to allow services to be rendered at a rate of agreement and forces businesses to comply with rules and laws, mandates and edicts of government agencies that are not present at the time or place. 

Me: Hello I wanted to find out if you were hiring at the moment.
Store Manager (SM): We take applications and fill spots according to the need.
Me: Great, I noticed the parking lot was full of shopping carts and wanted to offer my services for retrieving those carts. I assure you my rate would be sufficient and according to the skills involved.
SM:Your rate?
Me: Yes sir you see I would willingly accept $4 per hour until the job was complete or until a specified time had passed, your decision,
SM: Oh no we cannot do that, that is well below the Minimum Wage set by law, I am sorry but there is no way.
Me: Would you deny me to make any wage simply on an edict of a federal and state agency that is not present at this time or place?
SM: Sir, there is nothing I can do, they set the rate at which I am supposed to pay employees.
Me: And is that fair to either you or the employee? I ask, if I were to say that $4 per hour is what it would cost to have my services, which are needed by the state of your parking lot, and that wage would sufficiently support myself, why then would you deny me a chance to use my skills to earn a wage simply on the arbitrary and unfair rule that takes away the right of companies and employees to come to mutually beneficial terms of employment?
SM: It may not be fair but that is the law and this company will not skirt the law in order to hire cheaper labor.
Me: The company willingly gives away it's right to mutually beneficial terms of employment contracts on the will of a government office that is not present, leaving customers swerving to miss your shopping carts, and then you can deny a man who offers services to help not only you but your customers the ability to earn a wage that is fair and agreeable?
SM: Sir, I am sorry I cannot help you in your search for temporary employment, rules and laws are there for the protection of the people...
Me: Excuse me sir but how then is the minimum wage law helping either me or you in this instance?
SM: Well it isn't in this instance but what you are asking is not normal, a low wage for work is almost unheard of.
Me; I assure you my decision on that number is equal to the amount of skill I have in the matter compared to the time it would take to do the job and given the need for the service the wage seems more than fair, wouldn't you agree?
SM: Well yes but that isn't the point, the point is that we cannot have you on the books at that wage...
Me: Fantastic, I will work for cash money, that would insure neither the company nor I would have to pay taxes on that money, what a fantastic idea.
SM: Sir, No we cannot do that.
Me: Why not, it was your idea. Let me be completely honest, I didn't come in here to bother you with all of this, I just wanted to see how the common company would refuse a person a wage on the edicts of a government agency, against the better judgement and benefits of both parties. I thank you for your time. Good afternoon.
SM: Good afternoon to you as well.

Top Ten Capitalist Arguments – Explained

I found this rather interesting post on Reddit which sent me to this Liberty.me users profile. Ethan Glover gives an excellent rebuttal to this video trying to give a false impression of Capitalism.

It is not often that I respond to these things of such low quality as the video below. I vowed a long time ago that I am done with anarcho-communists. I do not debate them, and I do not talk to them. After many attempts of communicating with them, with 100% accuracy I was exposed to the most vile of creatures totally unable to act like adults, or even like human beings. I don’t like to generalize entire groups. I was sent a message by an anarcho-communist with some very helpful and enlightening information that gave me a better understanding of their philosophy once. Will Moyer, a leftist, wrote a brilliantly put together article that I responded to in “The Limits of Will Moyer“. But any efforts I have made to talk to them directly have resulted in the most pathetic and lowest of treatments.

The reason I so thoroughly enjoyed Will Moyer’s article is because, unlike the video below, it was not full of SCE (sarcasm, cynicism, exaggeration). His article made his points directly and he proved that he had an understanding of “right libertarianism,” or synonymously, and more accurately to me, anarcho-capitalism. He did not mince words and was not afraid to go against libertarianism, but at the same time he did not treat his writing as a BuzzFeed Top 10 list. It was meant to be of high quality, and it was meant to be taken seriously.

The video below was made for attention and makes no attempt to understand capitalism, but rather it only illustrates a reconfirmation of biases. I respond to it only at request, and grudgingly so. If the video creator wanted to be taken seriously he would have sucked it up, cut out the childish SCE and utilized a little CHI (curiosity, humor, impudence). Or to put it in other words, there’s no problem with disagreeing and rejecting the arguments of others, but if you don’t want to be torn apart, try to have some fun and create a real discussion. This video, in its despicably low BuzzFeed sarcastic style, does not deserve a bit of respect. I’d be willing to point out the positives in all other cases as I did with Moyer, but this will simply be the crumpling and throwing away of an undeserving piece of junk.

A note on how to read this article: This is not a thorough break down of anything in particular. Rather, it is merely a response to a poorly put together, quick list of arguments against capitalism (which are actually arguments against socialism). For the best way to follow this article, watch the video one item at a time, and then read the appropriate response. For example, watch #10 from the video, then read #10 in the article. #9 from the video, then #9 in the article and so on.

10. Capitalism promotes innovation

Many people do indeed fall into taking easy jobs and not looking for upward mobility. Of course, the socialist answer is usually to force everybody into a single system of being equally poor. Not everyone is capable of being innovative, and not everyone wants to sit around playing the guitar all day. Most people take normal jobs that require simple work and live their life outside of work. Work does not have to be some amazing thing that we love to do, there are always going to be shitty jobs out there to be done. What we can do is allow adults to make their own decisions, and run their own lives. You simply cannot force everyone to be an artist. If everyone were innovative, there would be no such thing as innovative.

Not only that, but the source that the video uses to show that only 13% of people are disengaged at work is a worldwide poll. The four highest countries for most engaged are the United States (mixed-economy, partially capitalist), Canada (mixed-economy, partially capitalist), Australia (market economy, third freest economy in the world), and New Zealand (market economy, fourth freest economy in the world). The most disengaged? East Asia (which with the exception of newly capitalist systems such as China and Hong Kong, most countries in East Asia have socialist command economies), Sub-Saharan Africa (a highly underdeveloped region with a long history of socialism and communism), and South Asia (a highly liberalized area, it’s fastest growing nation, Sri Lanka recently took on some capitalist policies). [Source]

As for the source on people not responding to financial incentive? Massively taken out of context. First, the study found that when it comes to mechanical skills, people respond to financial incentives, and when it comes to cognitive skills people respond to different kinds of incentives, but we’ll get back to that. The economic law that says people respond to incentives is still true. If you don’t pay a programmer enough, he’ll quit for a higher paying job. However, once the pay is good enough, he’ll start to look for other incentives like the ability to be autonomous and creative. What does this mean? High value employees are capable of demanding more, and do so. This is something we have found through capitalism. It is the still generally free market in the software world that has recognized this. This is why you see such incredible innovation in the workplace in places like Google and Amazon. This has been known for a long time, this research is only repeating what has already been discovered in, and put into practice in the free market.

Within the highly capitalist software industry, this is also where you see things like Apache, Linux, and Wikipedia. Large open source projects that are dependent upon free labor and donations. The “open-source way” does call for people to lead projects, but it also welcomes free labor. Open source has become one of the best ways for young people to gain experience and work with big projects. This is why they’re so popular. It provides an opening, and the people who are at the top, leading the project and running the show? They’re being paid. Of course, they’re being paid. It’d be silly to think that wasn’t the case. Open-source is a huge industry. All of this is a part of the free market. Being free of charge has nothing to do with socialism. This entire video is an idiotic misunderstanding of a simple word that can be looked up in the dictionary in about two seconds. Socialism means collective ownership. Guess what? The Wikimedia Foundation, The Apache Software Foundation, and Linux distributions such as Fedora? All owned and operated by full time employees.

Queue the canned rants about “global inequality” and how it’s not fair that everyone doesn’t have the same piece of the imaginary pie. First of all, wealth is not distributed, it is created. It is the socialist nations who end up poor. It is not the fault of capitalist nations that that is the case. It is the fault of the governments for holding people back and not allowing them to adapt to the world and build better lives for themselves. Second, you don’t need to be rich to innovate, the greatest innovators throughout the world come from humble and poor means. It is their striving to build something that pushes them into innovating in the first place. Does this mean it is capitalism itself that promoted that innovation? Sort of, on a general scale. But take it down to the individual scale as the video has, and it’s more because those innovators wanted to get rich and share their ideas.

Then there’s the idea, that’s repeated many times throughout the video that “capitalist education” destroys creative thinking and critical thought. Of course, the video is ignorantly referring to public schools, the exact thing it had just called for by saying that we are more than capable of providing education for everyone.

9. Free markets increase economic development

Immediately after saying the word “free market”, the video starts talking about the IMF, World Bank, and Free Trade Organization. These are not free market organizations, and it must be said that it is impossible to force free market on anyone. At that point, it is by definition, not free, nor capitalism. People must be able to trade among themselves freely in order for there to be a free market. You’d think that’d be obvious, right? It then suggests that protectionist policies such as anti-trust laws and banking bailouts are good for economies, and all the evidence that shows that protectionist policies are only to protect special interests (shocker!) don’t matter.

On the internet being a major innovation, let’s consider first where innovation on the internet has come from. To the government, the internet was nothing but a tool for the military, they had no idea of its power. It was only until the private sector started building on it that it became what we know of today. The internet that the video refers to is pure private sector. Not only that, but just because entrepreneurs use roads to drive to work, that does not mean the government is responsible for their innovations. In the absence of government, roads will still exist, just cheaper and more efficient. If the government never created the “internet”, it still would’ve been created, probably by the same private sector contractors. The internet and GPS, today, are old technologies that are only useful to the average person because of innovative entrepreneurs in the free market.

8. Markets are a rational means of organizing economic life.

The fact that the U.S. wastes so much food is a sign of prosperity (obviously). That prosperity comes from better technology and a (relatively) free market. The starving nations around the world (which are mostly under socialism and dictatorships) lack the agricultural technology that countries like the U.S. do. Even still, countries like the U.S. continue to send them food and care, causing their populations to rise disproportionally to their technology. This only makes things worse than they are. Socialist programs of just giving things away with no consideration as to the consequences and potential alternatives (such as abandoning intellectual property and business regulations that may allow companies to help these countries) are what cause the mass poverty in poor nations.

The New Deal (mentioned in one of the videos sources), by the way, destroyed the economy and it was only after Roosevelt’s death and the removal of his policies that the economy recovered from it and World War II.

As for planned obstination, this is primarily caused by inflation, which is caused by central banking. As the dollar loses value, people have less to spend, so they demand cheaper products. Companies respond to this demand by making… cheaper products. In order to do this, they must use lower quality material. This is as opposed to the post world war two era in which socialist public works programs were being dismantled and the pent up economy went through a major boom. This was an era in which cars, clothes and appliances were made to be very sturdy and long lasting. Today, people simply cannot afford such things and must choose lower quality products.

These cheaper products do not generate more profits, because they are lower priced products for lower priced material. Without planned obstination, there would be higher priced products with higher priced materials that would be more durable, and would not be replaced nearly as much.

When Keynes said that technology would lead to 15 hour workweeks he ignores the entire purpose of technology. Technology allows us to advance society. As technology rises, we create different kinds of technological jobs. The purpose of technology is not to create an imaginary, impossible Peter Joseph world. It is to raise the standard of living and to solve problems. Robots have replaced menial factory line jobs and have allowed more people to take on more challenging jobs in robotics and electronics. This is a positive that the video was complaining doesn’t exist from the very beginning. You don’t create more challenging jobs by playing the guitar for no pay, you do it by innovating in the free market to meet customer demand.

The videos source, which complains about people working longer hours, makes no mention of things like inflation and high tax rates. The countries mentioned such as the United States, Canada and Japan all have some of the highest individual tax rates in the world. As always, the socialist answer is just to pass regulation to shorten the workweek, which inevitably leads to mass poverty because no one can afford to live and afford all the socialist publics works programs at once. As for the article on “bullshit jobs,” it’s just a lot of complaints about necessary jobs and how the author wishes he could spend his life doing nothing productive.

You can work as long as you want, the free market (again) is by definition free. The market isn’t some magical being that doesn’t let you do less work. It is, however, inefficient and bad for the people to hire 100 people to work for half an hour each. To quote the video, “How stupid is that?”

The claim that everyone is working “bullshit jobs” to buy “bullshit products” is.. well.. bullshit. It’s entirely subjective opinion. My smartphone is not a bullshit product, nor is my laptop. I don’t own any bullshit products, because I don’t choose to buy products that I think are bullshit. I think socialist books are bullshit products and a waste of money. But some people don’t, so be it. Nobody “makes me want” anything, that again, is a bullshit argument. If you buy one thing over another, that does not make you superior, that makes you human.

7. We can prevent bad business practices through ethical consumerism.

The very first argument is that the media (state controlled) is advertising products to people and are, therefore, catering to the evil corporations. Advertising, overtime, has become much more subtle, internet marketing is about advertising products to people who already want that product. This has happened because people have begun to ignore advertisements, this is why adless mediums such as Netflix have become so popular over things like cable.

Yes, vegging out on the couch and watching TV is bad for you, but will it program you to go out and buy stuff? No. In the end, it is the individuals choice and responsibility to do so. Everyone, including the commentator of this video, has found a great product that they like (and is, therefore, subjectively not bullshit) through advertising. Advertising is not only a great way to drive down costs of certain things like YouTube (ads are the reason it’s free) but it’s a great way for us to discover new products that we might enjoy. A personal lack of self-control is no reason to vilify the entire thing. That’s like saying Mountain Dew should be illegal because I enjoy it too damned much.

But, the point of saying advertising is bad is because companies won’t advertise their own bad practices. Yes… that’s an actual claim. At no point have I ever heard a capitalist claim that companies should self-police. What I have heard is that the market is capable of self-policing. This means that there is no need for government intervention. Especially when there are things like Consumer Reports and the thousands of systems for product review out there such as with Amazon and eBay.

Just because single products bring multiple products together, it doesn’t mean a thing. Individual products and companies speak for themselves. What the video is referencing (but coyly doesn’t mention) is the “business practices” of companies in foreign socialist nations in which workers are treated like cattle, thanks to bad economies and regulations created by their governments.

At the end of this rant, the video says you can only vote with your money if you actually have any money. This shows a total misunderstanding of what voting with your wallet means. First of all, politics currently control and dictate most business products, especially things like food. Businesses can not cater to their customer because they are either held back by protectionist regulation or must use protectionist regulation to get ahead. Voting with your wallet has nothing to do with moving companies actions by yourself, it’s about making your own decisions. Yes, this gets increasingly harder as countries become more socialist, that does not negate the purpose.

6. Government regulations address the question of bad practices.

No. They don’t. They create them. This is not capitalism, it’s got nothing to do with it. What the video complains about is actually socialism.

Capitalism: The possession of capital or wealth; an economic system in which private capital or wealth is used in the production or distribution of goods and prices are determined mainly in a free market; the dominance of private owners of capital and of production for profit.

Socialism: A theory or system of social organization based on state or collective ownership and regulation of the means of production, distribution, and exchange for the common benefit of all members of society; advocacy or practice of such a system, esp. as a political movement.

The enforcement of collective ownership and social organization is government. The government, through socialism, chooses certain companies over others by creating protectionist regulations.

“Worker control” already exists due to government regulation, they’re called unions, and they only make things worse by deluding supply and demand.

5. Don’t you buy things from corporations? Doesn’t that make you a hypocrite?

No.

4. Capitalists put risk into their businesses.

It was challenging for Nazi’s to take power, and because it’s challenging to start a business, then it’s wrong? Wait, what if it’s challenging to build a socialist system that doesn’t collapse in five years? Does that make it wrong? This has nothing to do with challenge, it’s about the fact that when someone puts blood and sweat into building something, you can’t come along and claim that it somehow equally belongs to everyone on earth.

People voluntarily build businesses, other people voluntarily work for those businesses. In the same way that this video creator thinks you’re stupid for buying a smartphone instead of socialist literature, he thinks you’re stupid for working for a private company rather than working for the government or a cooperative. It is actively saying that you are too dumb to manage your own life and instead, your life should be run by a British teenager on the internet.

Socialists want to exercise their power over others by destroying systems that everyone explicitly agrees to and is perfectly happy with. Thankfully, they’re unwilling to take the risks of gaining actual support and tend to enact what they want through groups like the democratic party in the hopes that one day, the government will put a gun to your head and tell you that you own nothing, no matter what your personal beliefs are.

3. Living standards improve overall, even for the poor.

Living standards improved under Nazism and Fascism, therefore, it’s not a good thing that living standards improve under capitalism. Again, the video is going immediately towards the Nazi’s and saying, “Look, they did it!” If the video claimed that socialism improves living standards for the poor (as it does temporarily) I could claim the same thing. What’s more important is that capitalism and free trade permanently raise living standards and does not lead to mass famine and poverty as socialism and Keynesianism does.

Argentina has always had economic troubles and experienced the usual boom bust cycles that any Keynesian economy does. There’s nothing wrong with worker cooperatives and are perfectly welcome under capitalism. If they work, if they can meet customer demand, then they are totally OK. I would love to see more attempts at cooperatives, but only if they compete on the free market where people can decide which is best. It is important to mention that there are both pros and cons of co-ops. It is also important to remember that the customer is more important than the employee. This does not mean it’s OK to commit criminal actions against employees, but to say that working is a personal decision that is about serving others for the sake of future personal benefit.

2. Capitalism is the result of human nature.

First of all, capitalism has existed for at least 150,000 years. Second, of course it came after humans, humans created trade. Capitalism being a result of human nature has nothing to do with genetics as the video author very well knows. It’s about the fact that trade is a part of communication. It’s what allows us to build societies. The division of labor is the entire reason modern society exists.

Communicating with others and having friends has nothing to do with communism.

Communism: A theory that advocates the abolition of private ownership, all property being vested in the community, and the organization of labor for the common benefit of all members; a system of social organization in which this theory is put into practice.

The video is trying to suggest that capitalism means you can’t live with friends, have relationships or communicate. However, it is in communism that it becomes impossible to solve disputes because there is no recognition of ownership. Such a society quickly devolves into a primitive state.

Capitalism does not force you to charge your friends to help you to move. This, as the video creator and everyone on earth knows, is a ridiculous thing to say to begin with. Capitalism thrives on, and asks for cooperation, it is built on cooperation. Competition is not the opposite of cooperation, nor is it the only foundation of capitalism. And yes, competition is natural, if it weren’t, sports wouldn’t have been around for well over 4,000 years.

And then we get back to how public schools are capitalist schools. Over and over, this video talks about socialism and calls it capitalism. The public education system (which this video creator should adore) teaches an over exaggerated idea of “sharing is caring”. They do not teach fundamental reasoning, negotiation and critical thinking skills. If we had a capitalist education system, there surely would be plenty of schools that did just that, but alas, we have a socialist one.

1. Capitalism is the only system that’s possible.

No one is saying this. In fact, it is very rare to see capitalism today. It certainly does not exist in the US or UK. But the video doesn’t talk about that and the historical effects of socialism. Instead, it queues the pictures that are purely a result of the tragedy of the commons and the lack of private property. When all land is unowned, people have no incentive to take care of it.

It’s been proven time and again that the environment is not headed for collapse, and when the economy collapses it is often due to Keynesian practices and central banking which creates ridiculous and unnecessary boom/bust cycles.

The only need for social change is the need to get rid of government to allow people to act like adults and make their own decisions instead of bending to these ridiculous “common good” arguments that have never had a lick of actual reasoning behind them. (Mostly because there is no such thing as a common good, it’s an impossible concept.)

The only way you’re ever going to convince everyone that all companies should be cooperatives is to force it on them by regulation. The fact is that structured companies, which are responsive to the customer, not some bratty socialist employees, will always out compete them and the customers will always choose them as superior businesses.

As for anarcho-syndicalism in the Spanish Civil War, this system was indeed forced on those peaceful non-criminals who did not want it. The punishment for using money was death. There is no possible way to force a particular kind of anarchy without the use of coercion, in which case, it is inevitably a state. Of course, this is only in the few areas that anarchy was established. In the grander sense, the Spanish Civil War was fought between Nazi and Italian Fascist supporter Dictator Francisco Franco against the Soviet Union.

I get that anarchy makes places better than they are, I’m sure those parts of Spain under anarchy were in a better position than being under a long series of dictators who were constantly at war for the entirety of Spain’s history. Is this really the best case for “left libertarianism?” If so, it’s got nothing to stand on.

Conclusions

In reality, this video gives no real arguments against capitalism and why it is criminal. There are a lot of arguments against socialism and the usual whining of, “Why isn’t everyone as economically ignorant as me? I’ll make them that way!”, but nothing with any real content.

When the video says not to use, “rehashed, terrible phrases that mean nothing [that] are often completely inconsistent with reality” it ignores the fact that the video uses a stereotypically wrong view of capitalism pushed by socialist government and it ignores the realities of economics, something socialists like this have never been able to get straight in their entire history.

Bastiat On Economic Protectionism

A PETITION From the Manufacturers of Candles, Tapers, Lanterns, sticks, Street Lamps, Snuffers, and Extinguishers, and from Producers of Tallow, Oil, Resin, Alcohol, and Generally of Everything Connected with Lighting.

To the Honourable Members of the Chamber of Deputies.

Open letter to the French Parliament, originally published in 1845 (Note of the Web Publisher)

Gentlemen:

You are on the right track. You reject abstract theories and have little regard for abundance and low prices. You concern yourselves mainly with the fate of the producer. You wish to free him from foreign competition, that is, to reserve the domestic market for domestic industry.
We come to offer you a wonderful opportunity for your — what shall we call it? Your theory? No, nothing is more deceptive than theory. Your doctrine? Your system? Your principle? But you dislike doctrines, you have a horror of systems, as for principles, you deny that there are any in political economy; therefore we shall call it your practice — your practice without theory and without principle.
We are suffering from the ruinous competition of a rival who apparently works under conditions so far superior to our own for the production of light that he is flooding the domestic market with it at an incredibly low price; for the moment he appears, our sales cease, all the consumers turn to him, and a branch of French industry whose ramifications are innumerable is all at once reduced to complete stagnation. This rival, which is none other than the sun, is waging war on us so mercilessly we suspect he is being stirred up against us by perfidious Albion (excellent diplomacy nowadays!), particularly because he has for that haughty island a respect that he does not show for us ^[1].
We ask you to be so good as to pass a law requiring the closing of all windows, dormers, skylights, inside and outside shutters, curtains, casements, bull's-eyes, deadlights, and blinds — in short, all openings, holes, chinks, and fissures through which the light of the sun is wont to enter houses, to the detriment of the fair industries with which, we are proud to say, we have endowed the country, a country that cannot, without betraying ingratitude, abandon us today to so unequal a combat.
Be good enough, honourable deputies, to take our request seriously, and do not reject it without at least hearing the reasons that we have to advance in its support.
First, if you shut off as much as possible all access to natural light, and thereby create a need for artificial light, what industry in France will not ultimately be encouraged?
If France consumes more tallow, there will have to be more cattle and sheep, and, consequently, we shall see an increase in cleared fields, meat, wool, leather, and especially manure, the basis of all agricultural wealth.
If France consumes more oil, we shall see an expansion in the cultivation of the poppy, the olive, and rapeseed. These rich yet soil-exhausting plants will come at just the right time to enable us to put to profitable use the increased fertility that the breeding of cattle will impart to the land.
Our moors will be covered with resinous trees. Numerous swarms of bees will gather from our mountains the perfumed treasures that today waste their fragrance, like the flowers from which they emanate. Thus, there is not one branch of agriculture that would not undergo a great expansion.
The same holds true of shipping. Thousands of vessels will engage in whaling, and in a short time we shall have a fleet capable of upholding the honour of France and of gratifying the patriotic aspirations of the undersigned petitioners, chandlers, etc.
But what shall we say of the specialities of Parisian manufacture? Henceforth you will behold gilding, bronze, and crystal in candlesticks, in lamps, in chandeliers, in candelabra sparkling in spacious emporia compared with which those of today are but stalls.
There is no needy resin-collector on the heights of his sand dunes, no poor miner in the depths of his black pit, who will not receive higher wages and enjoy increased prosperity.
It needs but a little reflection, gentlemen, to be convinced that there is perhaps not one Frenchman, from the wealthy stockholder of the Anzin Company to the humblest vendor of matches, whose condition would not be improved by the success of our petition.
We anticipate your objections, gentlemen; but there is not a single one of them that you have not picked up from the musty old books of the advocates of free trade. We defy you to utter a word against us that will not instantly rebound against yourselves and the principle behind all your policy.
Will you tell us that, though we may gain by this protection, France will not gain at all, because the consumer will bear the expense?
We have our answer ready:
You no longer have the right to invoke the interests of the consumer. You have sacrificed him whenever you have found his interests opposed to those of the producer. You have done so in order to encourage industry and to increase employment. For the same reason you ought to do so this time too.
Indeed, you yourselves have anticipated this objection. When told that the consumer has a stake in the free entry of iron, coal, sesame, wheat, and textiles, ``Yes,'' you reply, ``but the producer has a stake in their exclusion.'' Very well, surely if consumers have a stake in the admission of natural light, producers have a stake in its interdiction.
``But,'' you may still say, ``the producer and the consumer are one and the same person. If the manufacturer profits by protection, he will make the farmer prosperous. Contrariwise, if agriculture is prosperous, it will open markets for manufactured goods.'' Very well, If you grant us a monopoly over the production of lighting during the day, first of all we shall buy large amounts of tallow, charcoal, oil, resin, wax, alcohol, silver, iron, bronze, and crystal, to supply our industry; and, moreover, we and our numerous suppliers, having become rich, will consume a great deal and spread prosperity into all areas of domestic industry.
Will you say that the light of the sun is a gratuitous gift of Nature, and that to reject such gifts would be to reject wealth itself under the pretext of encouraging the means of acquiring it?
But if you take this position, you strike a mortal blow at your own policy; remember that up to now you have always excluded foreign goods because and in proportion as they approximate gratuitous gifts. You have onlyhalf as good a reason for complying with the demands of other monopolists as you have for granting our petition, which is in complete accord with your established policy; and to reject our demands precisely because they are better founded than anyone else's would be tantamount to accepting the equation: + x + = -; in other words, it would be to heap absurdity upon absurdity.
Labour and Nature collaborate in varying proportions, depending upon the country and the climate, in the production of a commodity. The part that Nature contributes is always free of charge; it is the part contributed by human labour that constitutes value and is paid for.
If an orange from Lisbon sells for half the price of an orange from Paris, it is because the natural heat of the sun, which is, of course, free of charge, does for the former what the latter owes to artificial heating, which necessarily has to be paid for in the market.
Thus, when an orange reaches us from Portugal, one can say that it is given to us half free of charge, or, in other words, at half price as compared with those from Paris.
Now, it is precisely on the basis of its being semigratuitous (pardon the word) that you maintain it should be barred. You ask: ``How can French labour withstand the competition of foreign labour when the former has to do all the work, whereas the latter has to do only half, the sun taking care of the rest?'' But if the fact that a product is half free of charge leads you to exclude it from competition, how can its being totally free of charge induce you to admit it into competition? Either you are not consistent, or you should, after excluding what is half free of charge as harmful to our domestic industry, exclude what is totally gratuitous with all the more reason and with twice the zeal.
To take another example: When a product — coal, iron, wheat, or textiles — comes to us from abroad, and when we can acquire it for less labour than if we produced it ourselves, the difference is a gratuitous gift that is conferred up on us. The size of this gift is proportionate to the extent of this difference. It is a quarter, a half, or three-quarters of the value of the product if the foreigner asks of us only three-quarters, one-half, or one-quarter as high a price. It is as complete as it can be when the donor, like the sun in providing us with light, asks nothing from us. The question, and we pose it formally, is whether what you desire for France is the benefit of consumption free of charge or the alleged advantages of onerous production. Make your choice, but be logical; for as long as you ban, as you do, foreign coal, iron, wheat, and textiles, in proportion as their price approaches zero, how inconsistent it would be to admit the light of the sun, whose price is zero all day long!

Frédéric Bastiat (1801-1850), Sophismes économiques, 1845

Taxing Voluntary Trade. It's what the government does best.

Did you know that businesses and individuals that use bartering to acquire products and services are held to rules from the IRS? The simple act of mutual trade between people is subject to oversight and increased taxation by the Federal Extortion Agency. So what are the rules and what are the penalties for not complying? Is there a way around the hand of government?

Just another way for the Government to steal wealth.

The IRS lays out a few things businesses should know before they mutually trade with others.

Barter exchanges.  A barter exchange is an organized marketplace where members barter products or services. Some exchanges operate out of an office and others over the Internet. All barter exchanges are required to issue Form 1099-B, Proceeds from Broker and Barter Exchange Transactions, annually. The exchange must give a copy of the form to its members and file a copy with the IRS.

Bartering income.  Barter and trade dollars are the same as real dollars for tax reporting purposes. If you barter, you must report on your tax return the fair market value of the products or services you received.

Tax implications.  Bartering is taxable in the year it occurs. The tax rules may vary based on the type of bartering that takes place. Barterers may owe income taxes, self-employment taxes, employment taxes or excise taxes on their bartering income.

Reporting rules.  How you report bartering varies depending on which form of bartering takes place. Generally, if you are in a trade or business you report bartering income on Form 1040, Schedule C, Profit or Loss from Business. You may be able to deduct certain costs you incurred to perform the bartering.

*According to the IRS website

All of this is a clear indication that the IRS thinks that whether currency is exchanged or not, the transfer of products and services is subject to taxation.

“In 1982, the IRS recognized barter as legal tender and barter exchanges as third-party record keepers, like accountants and banks. The exchanges must report barter income to the IRS on form 1099B”, says Karen E. Klein in a 2012 article for Bloomberg Businessweek.

Even though the government has taken this stance against voluntary exchange a free market system has come about. In an article posted to LewRockwell.com, writer Karen De Coster gives an explanation of a localized system of community barter. The Roanoke Valley Time Bank is a website devoted to help local individuals find help, services and other things on a system of barter and what the system calls “Time Dollars”. These dollars are obtained by helping or bartering some time, products or services to other members, time dollars can then be used on personal wants or needs, simply posting the job or product details of what is wanted and others barter their time dollars to help you. What a fantastic idea! What beautiful Anarchy this is!

 The mission statement for the Roanoke Valley time Bank is as follows:

“The mission of the Roanoke Valley TimeBank is to foster the well being of our community by providing a member-driven network of services that strengthens social bonds, encourages reciprocity, enhances our local economy, and builds on a  foundation of respect and equality.  Exchanges among members are recorded, honored, and rewarded through the use of "Time Dollars," a currency of equally valued services that empowers people to utilize their assets and enhance their lives, neighborhoods, and communities.”

Roanoke Valley Time Bank is part of a larger network of nationwide Time Banks.

This subject originally found its way into my brain via an article in a local newspaper by a tax preparer. He makes a point that though businesses and individuals are required to report these mutual trades very few actually do. I suppose others find this kind of theft undue and inhibitive to the creation of wealth or capital. In an age where one could seek out professional help through the internet on a voluntary basis, federal regulators try their hardest to punish cooperative help and to burden the individuals with compliance to unsavory rules and regulations. 

What You Weren't Told About The Minimum Wage by Skyler Lehto.

I came across this Video by Skyler Lehto on his YouTube channel. It raises what I believe to be the greatest argument against any artificial raise in minimum wages in the United States. Transcribed under this video is the complete text. 

Last year, President Obama proposed a hike in the federal minimum wage from $7.25 to $9.00 an hour. After the predictable failure of his proposal, Obama and his party have returned with the Harkin/Miller proposal to raise the minimum wage to $10.10 an hour. What I’m going to do in this video is make several points to confront the myths and address the reality behind the minimum wage. 

Point #1 

Elizabeth Warren’s assertion about a $22-an-hour productivity-adjusted minimum wage is highly misleading. 
First of all, the fact that the minimum wage has fallen behind in value does not mean that the jobs themselves have been held back just as much. In fact, over the past 34 years for which the BLS has maintained this data, the percentage of jobs paying at or below minimum wage has fallen precipitously. So the fact that the minimum wage is lower does not necessarily mean that most low-end workers are worse off for it. What’s more, the federal minimum wage law in 1960 did not apply to as many sectors of the economy as it does today, so Warren’s comparison is not entirely commensurable. Second, her suggestion overlooks a very crucial distinction between average productivity and marginal productivity. Not only did she cherry pick one of the highest estimates of productivity growth, but the statistic that Warren uses is based on an aggregate measure of productivity growth for the whole economy. However, we have to recognize that different jobs have changed in marginal productivity by vastly different amounts. Given the changes in technology and composition of the economy since 1960, some types of jobs have grown tremendously in productivity, whereas others have not grown nearly as much. Economists refer to this phenomenon as skill-biased technological change. As Christopher Wheeler notes in his 2005 St. Louis Fed study, increased wage dispersion since 1983 is significantly correlated with the increased relevance of college education and occupational computer use. Long story short, if we want more workers to earn $22 an hour, it requires getting more people the skills to actually take on these higher productivity jobs. 

Point #2 

The minimum wage is not a big stimulus to the economy. Many proponents of a higher minimum wage argue that giving workers more money to spend will set off a virtuous cycle leading to more jobs and more economic growth. Putting the transient nature of Keynesianism aside, the quantitative effect of a minimum wage increase on spending is actually quite trivial, because only a small portion of workers earn at or near the minimum wage, and much of their increased spending would come at the expense of others. As Obama's former chief economist Christina Romer writes, “the income increase from the higher minimum wage would be about $50 billion. Even assuming all of that higher income was redistributed from the wealthiest families, the difference in spending behavior is likely to translate into only an additional $10-20 billion in consumer purchases. That’s not much in a $15 trillion economy.” Now granted, that was in consideration of the $9.00 minimum wage proposal. But even if the minimum wage hike boosted total spending by as much as $40 billion, that would still amount to less than one quarter of one percent of GDP, which isn't much to get excited about.

Point #3

Australia’s minimum wage is not $16 an hour in US terms. People who make this claim are not doing the currency conversion properly. The exchange rate between two currencies in the foreign exchange market does not necessarily reflect what the currencies are valued at domestically. The nominal exchange rate is often skewed from the real exchange rate due to various factors, such as taxes on imports and exports, or international financial flows that favor one currency over another. Making an accurate price comparison between two countries requires taking account for something called purchasing power parity. Doing this, we discover that Australia’s minimum wage is actually $10.51 in US terms. While that is measurably higher than the US, it’s a far cry from the $16 an hour that many have suggested, and it doesn't come without its share of unintended consequences. Along these lines, people will also occasionally cite higher minimum wages in Canada. But applying the same process to Canada using Ontario’s minimum wage results in a figure of only $8.03 in US terms. 

Point #4

The minimum wage does little to reduce poverty. Supporters of a minimum wage hike usually take it as an article to faith that it will effectuate a reduction in poverty by raising incomes for the working poor. Yet the vast majority of empirical evidence suggests otherwise. Most studies, such as Neumark and Wascher in 1997, Vedder and Gallaway in 2001, Sabia and Burkhauser in 2010, and Sabia and Nielsen 2012 find that minimum wage hikes have no significant effect towards reducing poverty. This is because there are several factors either trivialize or negate the positive effects of a higher minimum wage. First of all, 80 percent of minimum wage earners are not in poverty. The mean household income for a minimum wage worker is around fifty-one thousand dollars a year, because most minimum wage workers are actually second and third earners in their household. Three out of five minimum wage workers end up getting a pay raise anyway within their first year. As it currently stands, the median age of a minimum wage worker is 24, and single parents working full time only constitute four percent of minimum wage workers. Ironically enough, raising the minimum wage is least likely to benefit the workers who actually are in poverty, because as their income rises, many see their government benefits sharply reduced. And of course, the minimum wage is going to have a hard time reaching the 65 percent of impoverished adults who are not employed. To make matters worse, raising the minimum wage comes with adverse side effects. Among these include higher food prices, and a decrease in employment opportunities, which brings me to my next point. 

Point #5 

The minimum wage worsens unemployment for the low-skilled. Now this point has been heavily researched and discussed amongst economists, especially with the new minimum wage research that has proliferated since the 1990s. Nearly two-thirds of new minimum wage research studies indicate a negative employment effect associated with the minimum wage. But a few studies have purported to find a zero or positive effect of the minimum wage on employment. One such study was done by David Card and Alan Krueger in 1994. More recently, another was done by Dube, Lester and Reich in 2010, and another by Allegretto, Dube, and Reich in 2011. These studies have numerous flaws, as David Neumark and William Wascher have pointed out. Most of the details are too extensive for this video, but I would like to indulge in the following. Suppose it were true that the minimum wage has zero effect on the quantity of labor employed by low-wage employers. In that case, it would still be likely to have deleterious effects on the employment prospects of the low-skilled because of something called “labor-labor substitution.” Hypothetically speaking, even if employers paid for the higher minimum wage entirely through prices, productivity, and reduced turnover, the positive supply effects of a higher wage would give the employer a larger labor pool to draw from. Consequently, they would be able to select more-skilled applicants at the expense of those who are less-skilled. And to add insult to injury, lower turnover means fewer job openings for those looking to get a foothold in the job market. Thus, a higher minimum wage would still make it more difficult for the low-skilled to find employment, even if the employer’s elasticity of labor demand were zero. So it should come as no surprise that when we segment the labor force by skill level, as economist Antony Davies and many others have done, we find that a higher minimum wage is correlated with higher unemployment for the lowest-skilled members of the work force. This is also why in their meta-study of new minimum wage research, Neumark and Wascher concluded that, “the studies that focused on the least-skilled groups provide relatively overwhelming evidence of stronger dis-employment effects for these groups.” All in all, three-quarters of economists recognize that   the minimum wage has negative effects on the employment of low-skilled workers. 

Point #6 

The minimum wage hurts the disadvantaged. Most advocates for a higher minimum wage are undoubtedly motivated to improve the well-being of the worst-off members of society. But good intentions are no excuse for bad results, and the minimum wage is just that for the lowest-skilled members of the workforce. Not only does the minimum wage make it more difficult for less-skilled prospective workers to find jobs, but evidence suggests that it also has a long-term negative effect. A 2004 study from Neumark and Nizalova found that exposure to a higher minimum wage during young adulthood is associated with lower earning several years later, and that the main reason for this is a deprivation of work experience during younger years. They also found that this effect was more pronounced for blacks than any other racial group. This is unsurprising, given how black teenage unemployment is exceedingly high, in great part due to the minimum wage. 

So there you have it. Average productivity is not the same as marginal productivity. $16 in Australia is not the same as $16 in the US. Being on the minimum wage is not the same as being in poverty. Raising the minimum wage is not the same as helping the disadvantaged. Good intentions are not the same as good results. And for those reasons, raising the minimum wage is not the same as a good idea.

Special Thanks to Skyler Lehto for permission to transcribe as well as my wife for transcribing this.