December 2, 2008
The Food Is Certainly Better
The central question in Reason Magazine's 40th Anniversary issue is whether we are more free than in 1968 or less. As much as big-L libs love to look at the dark side, about all of them were pretty upbeat. Veronique de Rugy highlights the conundrum "Government has grown, but freedom has grown faster."
As Milton Friedman showed in Capitalism and Freedom, such wealth both feeds and is a byproduct of freedom. On one hand, freedom in economic arrangements produces wealth. This, in turn, produces a demand for more liberty, which then produces more prosperity. Thus, increasing wealth is usually correlated with increasing economic freedom. The deregulations of the airline, telecom, and trucking industries in the 1970s, and the marginal tax rate cuts and control of inflation in the ’80s, contributed to the widespread prosperity of the ’90s.
Yet, the wealth accumulation of the last 40 years has also made the government bigger. Real federal spending increased from $774 billion in 1968 to $2.5 trillion in 2008—a 225 percent increase—and federal spending per household grew from $11,800 to roughly $21,000 over that period, in constant dollars. This forms a libertarian paradox: economic freedom and wealth breed not just more political freedom, wealth, and choice but also more government.
David Boaz's book of his collected essays is likewise pretty upbeat. JohnGalt once suggested a freedom meter. Like the end-of-the-world clock, we could dial it up or down based on elections, legislation, and our moods that day.
I watch a nephew discover Ayn Rand and the liberty movement (I gave him my 40th Anniversary issue). I feel sorry that he did not discover the movement when Ronald Wilson Reagan was President. On the other hand, he gets the Internet. Ultimately, I have to accept that the additional wealth is a good tiebreaker for 2008.
Freedom on the March
Posted by John Kranz at December 2, 2008 12:38 PM
I'll play the contrarian - color me partially unconvinced.
I've read the article, and what stands out to me is that there's no satisfactory definition of "economic freedom" stated. I'm left with the idea that the writer sees "economic freedom" and "having more money to spend on more stuff." Indeed, if we're going to measure economic freedom by the number of poor people (as defined by the Census Bureau) who own air conditioning, color televisions, and refrigerators, then she is right - and it's time to declare victory in the War on Poverty so they'll stop taxing my income to death and using the revenue to buy air conditioners, televisions, and refrigerators for the so-called poor. We have the richest poor in the world here.
But "economic freedom" must also mean "the freedom to spend the money I rightfully earn in the ways I see fit, or to not spend it at all if I so desire." If I own an asset (let us say a plot of land) that I cannot use in a sensible way as I see fit (such as to build a business, as a result of the government declaring it a wetland), then I have wealth but no economic freedom in that regard.
The same applies to what should be called individual unfunded mandates. If I have ten extra dollars, then I have more wealth; but if the government outlaws cheap incandescent light bulbs and requires me by law to spend an extra twenty dollars a year on compact fluorescents, I have less economic freedom. If my wife, who (bless her heart) loves pork rinds, suddenly cannot enjoy them because the nannystate's diet wing bans them now that we can afford to add them to the grocery list, then we lack economic freedom.
Look at the whole concept of Tax Freedom Day. With some fluctuation, Tax Freedom Day has advanced later in the year as time goes by, and that does not take into account those individual unfunded mandates. It also doesn't take into account the effect on the cost of goods purchased with my increased wealth due to government meddling in markets and production. Finally, it doesn't take into account the federal debt, which is a bondage - though a bondage postponed.
Wait until the government gives us universal health care and starts nationalizing industries, and see how much economic freedom we lose.
I see it as a post hoc ergo propter hoc fallacy. I doubt that "wealth accumulation of the last 40 years has also made government bigger." Instead, I see it more as a matter of, as Americans created more wealth, our government became greedier and demanded a bigger and bigger piece of it. Government does not create wealth; at best, it can provide an environment where the citizens can create wealth. Our government, as a result of its felt need to regulate and dictate more and more aspects of our lives, has cost us freedoms, both economically and politically.
I'll wait until later in the day to scroll down the page and play village contrarian on the issue of immigration.
I'll play the contrarian - color me partially unconvinced.
I've read the article, and what stands out to me is that there's no satisfactory definition of "economic freedom" stated. I'm left with the idea that the writer sees "economic freedom" and "having more money to spend on more stuff." Indeed, if we're going to measure economic freedom by the number of poor people (as defined by the Census Bureau) who own air conditioning, color televisions, and refrigerators, then she is right - and it's time to declare victory in the War on Poverty so they'll stop taxing my income to death and using the revenue to buy air conditioners, televisions, and refrigerators for the so-called poor. We have the richest poor in the world here.
But "economic freedom" must also mean "the freedom to spend the money I rightfully earn in the ways I see fit, or to not spend it at all if I so desire." If I own an asset (let us say a plot of land) that I cannot use in a sensible way as I see fit (such as to build a business, as a result of the government declaring it a wetland), then I have wealth but no economic freedom in that regard.
The same applies to what should be called individual unfunded mandates. If I have ten extra dollars, then I have more wealth; but if the government outlaws cheap incandescent light bulbs and requires me by law to spend an extra twenty dollars a year on compact fluorescents, I have less economic freedom. If my wife, who (bless her heart) loves pork rinds, suddenly cannot enjoy them because the nannystate's diet wing bans them now that we can afford to add them to the grocery list, then we lack economic freedom.
Look at the whole concept of Tax Freedom Day. With some fluctuation, Tax Freedom Day has advanced later in the year as time goes by, and that does not take into account those individual unfunded mandates. It also doesn't take into account the effect on the cost of goods purchased with my increased wealth due to government meddling in markets and production. Finally, it doesn't take into account the federal debt, which is a bondage - though a bondage postponed.
Wait until the government gives us universal health care and starts nationalizing industries, and see how much economic freedom we lose.
I see it as a post hoc ergo propter hoc fallacy. I doubt that "wealth accumulation of the last 40 years has also made government bigger." Instead, I see it more as a matter of, as Americans created more wealth, our government became greedier and demanded a bigger and bigger piece of it. Government does not create wealth; at best, it can provide an environment where the citizens can create wealth. Our government, as a result of its felt need to regulate and dictate more and more aspects of our lives, has cost us freedoms, both economically and politically.
I'll wait until later in the day to scroll down the page and play village contrarian on the issue of immigration.
Posted by: Keith at December 2, 2008 4:02 PMThe problem is that you cannot quantify freedom. You're either free or you're not. (Austrian economists like me tend to reject quantification of abstract concepts like "good" and "bad," which we hold cannot be measured objectively.)
We were not truly economically free under Nixon's wage-price controls. We're certainly not truly economically free today. But how do you assign a value to gasoline lines and stagflation versus a federal bailout and New York's mandate that all health insurance cover everything (meaning men are insured for hysterectomies)?
Different times, same BS, same problem. Don't be satisfied today just because you have your iPod, hi-def TV and other toys. A gilded cage is still a cage, so the saying goes. Be willing to demand freedom, even if it means having less wealth.
Ask yourself: do you love wealth more than you love liberty?
Posted by: Perry Eidelbus at December 3, 2008 11:20 PM | What do you think? [2]