Hayek: Liberty Is

Here is the way Hayek opens THE CONSTITUTION OF LIBERTY:

We are concerned in this book with that condition of men in which coercion of some by others is reduced as much as is possible in society. This state we shall describe throughout as a state of liberty or freedom. (11)

This definition of liberty or freedom makes it clear that freedom is a relation between men. Freedom is not about having greater possibilities or more things to choose from. I’ve heard or read some who do seem to equate freedom or liberty with a larger range of choices. Hayek also notes that restrictions on or infringements of freedom result from the coercion of some by another or by others. A person’s freedom is not reduced by weather or some physical event in nature, or by an accident that leads to a person being confined to a wheelchair.

This idea of freedom implies a person has a private sphere that means some realm for which the individual can act without the direct interference of others:

Whether he is free or not does not depend on the range of choice but on whether he can expect to shape his course of action in accordance with this present intentions, or whether somebody else has power so to manipulate the conditions as to make him act according to that person’s will rather than his own. Freedom thus presupposes that the individual has some assured private sphere, that there is some set of circumstances in his environment with which others cannot interfere. (13)

The words liberty and freedom are often used in different ways, which of course means the possibility of confusion and misunderstandings. Hayek discusses a dangerous and troubling use of the word liberty, which follows from the point of noting above that freedom is not about more choices and it is not about having the physical ability to do something a person wants to do.

. . .until comparatively recent times few people seriously confused this ‘freedom from’ obstacles, this freedom that means omnipotence, with the individual freedom that any kind of social order can secure. Only since this confusion was deliberately fostered as part of the socialist argument has it become dangerous. Once this identification of freedom with power is admitted, there is no limit to the sophisms by which the attractions of the word ‘liberty’ can be used to support measures which destroy individual liberty, no end to the tricks by which people can be exhorted in the name of liberty to give up their liberty. It has been with the help of this equivocation that the notion of collective power over circumstances has been substituted for that of individual liberty and that in totalitarian states liberty has been suppressed in the name of liberty. (16)

Hayek observes that this use of the word freedom has become accepted in the United States by those on the political left, and he specifically associates this view with J.R. Commons and John Dewey. While these figures are from an earlier generation of intellectuals, their work influenced much of the philosophy of the political left today.

This confusion of liberty with power is especially troubling because it can be used to associate that natural appeal of the word with the call to redistribute wealth:

This confusion of liberty as power with liberty in its original meaning inevitably leads to the identification of liberty with wealth; and this makes it possible to exploit all the appeal which the word ‘liberty’ carries in the support for a demand for the redistribution of wealth. Yet, though freedom and wealth are both good things which most of us desire and though we often need both to obtain what we wish, they still remain different. (17)

Another way of thinking about the meaning of liberty puts things more directly, I think, in terms that relate to government and the individual.

. . . it describes the absence of a particular obstacle – coercion by other men. . . .It does not assure us of any particular opportunities, but leaves it to us to decide what use we shall make of the circumstances in which we find ourselves. . . .it does not exist if one needs permission for most of what one can do. The difference between liberty and liberties is that which exists between a condition in which all is permitted that is not prohibited by general rules and one in which all is prohibited that is not explicitly permitted. (19)

It seems to me this last suggestion relates to a perspective often heard at least in political discussions, and probably also in many academic circles. Some discuss the rights of individuals as though those rights are granted to the individuals by the government. I think this is a view often used to discuss property rights for example, and it seems to me a view which is often used by law professors and legal scholars. It would seem that if government grants rights to individuals, then individuals do not have a right to do something or to take some action unless they have been explicitly granted the right to take that action by government. In contrast is the view that an individual has a right to act as he wants unless that action has been prohibited by general rules. This view seems much more the view Jefferson relied on in writing the Declaration of Independence, and it is much more the view of Locke and many others.

Irrational Voters

Bryan Caplan's THE MYTH OF THE RATIONAL VOTER looks very interesting:

I see neither well-functioning democracies nor democracies highjacked by special interests. Instead, I see democracies that fall short because voters get the foolish policies they ask for. (p 22)

I'm not far into the book yet. It seems a key foundation for his analysis is the idea that voters have preferences about beliefs concerning how the world works. Voters mostly seem to take their personal preferences about these beliefs as given and they generally devote little attention to checking those beliefs against reality. In particular, voters beliefs about economic issues are taken by Caplan to be systematically wrong.

The implication?

Biased beliefs about economics make democaracy worse at what it does most. (p 21)

Presidential Candidates On Earmarks

THE WASHINGTON POST REPORTS:

Sen. Hillary Rodham Clinton helped secure more than $340 million worth of home-state projects in last year's spending bills, placing her among the top 10 Senate recipients of what are commonly known as earmarks, according to a new study by a nonpartisan budget watchdog group.

Working with her New York colleagues in nearly every case, Clinton supported almost four times as much spending on earmarked projects as her rival for the Democratic presidential nomination, Sen. Barack Obama (Ill.), whose $91 million total placed him in the bottom quarter of senators who seek earmarks, the study showed.

Sen. John McCain (Ariz.), the likely GOP presidential nominee, was one of five senators to reject earmarks entirely, part of his long-standing view that such measures prompt needless spending.

As a campaign issue, earmarks highlight significant differences in the spending philosophies of the top three candidates. Clinton has repeatedly supported earmarks as a way to bring home money for projects, while Obama adheres to a policy of using them only to support public entities.

McCain is using his blanket opposition to earmarked spending as a regular line of attack against Clinton, even running an Internet ad mocking her $1 million request for a museum devoted to the Woodstock music festival. Obama has been criticized for using a 2006 earmark to secure money for the University of Chicago hospital where his wife worked until last year.

This is pretty interesting. Nice to know at least one of the presidential candidates is against the corruption of earmarks.

You can see the numbers for yourself at Taxpayers For Common Sense.

Ethanol Warming?

WSJ COMMENTARY:

"So, incredibly, when the hidden costs of conversion are included, greenhouse-gas emissions from corn ethanol over the next 30 years will be twice as high as from regular gasoline. In the long term, it will take 167 years before the reduction in carbon emissions from using ethanol 'pays back' the carbon released by land-use change. As they say, it's not easy being green.

The second study comes out of the University of Minnesota and the Nature Conservancy and explores what the authors call the 'carbon debt' when native ecosystems are converted to biofuel stock. Until the debt is repaid, biofuels from those fields will be greater net emitters than the fossil fuels they replace. The authors find that the debt for corn ethanol in the U.S. is between 48 and 93 years. In Indonesia and Malaysia, which have a 1.5% annual rate of deforestation to produce palm oil for Western European biodiesel, the debt is as high as 423 years. Yep, that's four centuries. Even Fidel Castro won't last that long."

What is the typical citizen supposed to think, eh?

From Poverty To Prosperity

Russell Roberts INTERVIEWS WILLIAM EASTERLY who is the author of two interesting books on economic development: The White Man's Burden and The Elusive Quest for Growth. The interview is about 1 hour long. Much of the interview discusses the ways in which the western economies have not helped developing economies along the path to prosperity, and a good deal of this story reflects poorly on neoclassical economics. I think one very interesting suggestion Easterly makes about doing better in our efforts to help poor economies is that the conceptual framework needs to be changed from the mindset of planner to the mindset of the searcher.

I also have to mention something Roberts said: "The romance of utopia is timeless and enduring." This seems to be true. Too bad.

There is an interesting approach to offering aid to poor countries that was mentioned in the interview. Check out Global Giving.

Laissez-fairist Presidents

FREDERIC SAUTET offers a list of the presidents who have been most supportive of laissez-faire (in order of most supportive): Grover Cleveland, Martin Van Buren, Andrew Jackson, Thomas Jefferson, Calvin Coolidge, and Ronald Reagan. Only one president makes the cut since 1929.

Taking Leonard Liggio’s list as a benchmark, out of 42 presidents in U.S. history, only six of them can be regarded as true supporters of laissez-faire in one way or another. 1/7 is a pretty small ratio (but it’s probably better than in most other countries in the world). Also, only two of the six were presidents during the 20th century, and they are the least laissez-fairist of the bunch. If the “tendency” were to continue, there shouldn't be any laissez-faire-minded president in the 21st century. Clearly, it appears impossible that any of the current candidates to the U.S. presidency would make it on the list someday . . .

The Top & The Bottom

MICHAEL COX AND RICHARD ALM:

"Thus there is a certain perversity to suggestions that the proper reaction to a potential recession is to enact protectionist measures. While foreign competition may have eroded some American workers’ incomes, looking at consumption broadens our perspective. Simply put, the poor are less poor. Globalization extends and deepens a capitalist system that has for generations been lifting American living standards — for high-income households, of course, but for low-income ones as well."

This is an op-ed piece that points out, for me, how aggregation can make it difficult to have an accurate understanding of the rich and the poor in our country. Of course our system of political economy has been lifting American living standards for generations. But, this seems to often be missed when there are data reported about how much more the top income quintile has versus how little the bottom income quintile has. Cox and Alm explain some reasons why this data can mistakenly portray a picture which is inaccurate. And, their explanation doesn't even utilize the dynamic nature of our economy by which there is significant mobility between income groupings in the data, much less the observation that many in the lowest income quintile are those who are young and very early on in their working years.

History of Freedom

BRITS AT THEIR BEST is a very interesting web site with a Liberty Timeline.

Reward For Merit

Friedrich Hayek:

Reward for merit is reward for obeying the wishes of others in what we do, not compensation for the benefits we have conferred upon them by doing what we thought best.
(The Constitution of Liberty)

Freedom’s Friend

I heard on the radio this morning that today was President Reagan's birthday. I've been taking a few minutes this afternoon to read a few of President Reagan's speeches, and I ran across a short essay by Milton Friedman in which he explains the following observation:

Few people in human history have contributed more to the achievement of human freedom than Ronald Wilson Reagan.

I think it is well worth it to read Friedman's short essay.

One of the things I noted in looking at just a few of President Reagan's speeches is that he often talked about freedom and liberty. It seems to me these days that very few of our political leaders speak of freedom and liberty, and except for a brief reference by Mitt Romney in his speech last night, the people with much of a chance to be the next President have pretty much neglected individual liberty in their campaigns and in their views of government.

Eminent Domain After Kelo

WSJ commentary:

Does restricting "eminent domain" -- the power of government to seize private property -- harm economic growth? A new report from the Institute for Justice looks at the evidence and concludes the answer is no.

[. . . .]

This result isn't surprising. Developers love eminent domain because it's easier to snap up land when government forces owners to sell -- no unpleasant dickering over price, etc. Local politicians likewise believe they are best positioned to pick winners and losers and to shape the future of their cities.

But private development went along very nicely for two centuries before politicians began seizing one person's property for the benefit of another private citizen. Sometimes the marketplace adapted in amusing ways, as when major building projects were forced to go up around, or even on top of, older buildings. But in the absence of the coercive state, buildings still got built.

The most grandly conceived plans are also often those most likely to fail. If a project cannot proceed without government interference, it is reasonable to ask whether it is worth putting the hamfist of government on the scales at all. As the Institute for Justice's report notes, Baltimore's much-touted Inner Harbor redevelopment remains dependent on government handouts. At the same time, private redevelopments without eminent domain, such as in Anaheim's A-Town, are thriving.

From the standard economic perspective of efficiency and market failure, the important question is whether there are reasons to believe that parcels of land (especially those that would be taken by the power of eminent domain) will otherwise come to be devoted to something other than their most highly valued uses. In general, I can see no reason to conclude that they will. But, if you do conclude that parcels of land will not come to be devoted to their most highly valued uses, then the important question in all of this is whether there are reasons to believe that the government officials who wield the power to take land from some to give it to others are sufficiently knowing to successfully take land that is not being efficiently utilized and then give it to the person who will put the parcel to the most highly valued use. I'm sure this is very unlikely, and if it happens it would only happen by accident. I conclude that allowing government the power of eminent domain for so-called "economic development" results in significant government failure with respect to an efficient allocation of resources. Therefore, I'm not surprised that restricting government's power of eminent domain with respect to so-called "economic development policy" wasn't found by the research to diminish economic growth.

Now, from the perspective of the words we find written into our Constitution this analysis of eminent domain and efficiency (market failure) would seem to be of little relevance:

. . . nor shall private property be taken for public use without just compensation.

It seems clear to me, but unfortunately not to the Supreme Court, that taking privately owned parcels of land in order that the parcels may be owned by a different private owner is unconstitutional, since after all, the property is not being taken to be put to some public use such as a public highway, or a public park, or a public school. So, if the Supreme Court would stick to the words written in the Constitution (as it was ratified), the issue considered by this research would be of little policy interest. As it is, the research shows that assumptions made by the majority in the Kelo opinion are incorrect, and that the government officials who support such public actions in the name of "economic development" are very likely to fail to accomplish their stated goals. All the while, government's power is being used to take what is supposed to be private property in communities all across our country.

Energy Tyrants

Walter Williams:

The California Energy Commission has recently proposed amendments to its standards for energy efficiency. These standards include a requirement that any new or modified heating or air conditioning system must include a programmable communicating thermostat (PCT) whose settings can be remotely controlled by government authorities. A thermostat czar, sitting in Sacramento, would be empowered to remotely reduce the heating or cooling of your house during what he deems as an "emergency event."

Say you disagree with the czar's temperature setting for your house, the California Energy Commission is one step ahead of you with the provision: "The PCT shall not allow customer changes to thermostat settings during emergency events." In other words, the thermostat must be configured in a way that doesn't allow the customer to override the czar's decision.

Some people might agree with this level of government control over their lives, but if these amendments become law, you can safely bet there are other intrusive energy-saving proposals waiting in the wing. For now California's energy Nazis are simply testing how much intrusiveness Californians will peaceably accept. I can easily imagine California's Energy Commission requiring remotely controlled main circuit breaker boxes that control all of the electricity coming into your house. That would enable the energy czar to better manage your electricity use.

Say you're preparing a big dinner. The energy czar might decide that you don't need so much heat in the rest of the house. Or, preparing a big dinner might mean the energy czar would turn off the energy to your washing machine and dryer while the electric stove is on.

There's no end to what the energy czar could do, particularly if he enlists the aid of California's Department of Health Services. Getting six to eight hours sleep each night is healthy; good health lowers health costs. So why not make it possible for the energy czar to turn the lights off at a certain hour? California's Department of Education knows children should do their homework after school rather than sit playing video games or watching television. The energy czar could improve education outcomes simply by turning off the television, or at least turning off all non-educational programs. Of course, there could be a generous provision whereby if an adult is present, he could use a password to operate the television.

You say, "Williams, you must be mad. All that would never happen." That's the same charge one might have made back in the '60s, when the anti-tobacco movement started, if someone predicted that the day would come when some cities, such as Calabasas, Calif., would outlaw smoking on public streets. Back in the '60s, had someone predicted that there'd be bans on restaurants serving foie gras; citations for driving without a seatbelt, that the government said would be unnecessary if cars had airbags; and school bans on kids having peanut butter sandwiches in their lunchbox, I'm sure people would have said that would never happen.

California's Energy Commission, along with its legislature, has the power to mandate that all existing -- as well as new -- heating and cooling devices have programmable communicating thermostats by 2009. After all, it's never too early to start saving energy or prepare for an "emergency event." The reason they won't is because they would encounter too much political resistance. Their agenda is far more achievable using techniques dear to all tyrants: There's less resistance if liberty is taken away a little bit at a time.

I can't think of anything to add.

Earmark Corruption? Par For The Course

Mark Tapscott:

With the exception of a tiny band of GOP senators led by Tom Coburn, R-OK, and Jim DeMint, R-SC, and House Minority Leader John Boehner, Republican Study Committee chairman Jeb Hensarling and the small caucus of anti-earmark conservatives, the congressional GOP is every bit as addicted to pork-barrel politics as the Democrats, if not even more so.

That's why since before Christmas, the White House has dawdled on what ought to be a no-brainer decision and has thus been hearing from a steady procession of congressional GOPers pleading with Bush not to sign the Executive Order, like drug addicts begging the judge not to force them into rehab.

From that perspective, Blunt's actions, the deafening silence of Senate Minority Leader Mitch McConnell on the Executive Order, and the determined effort of National Republican Congressional Committee chairman Tom Cole of Oklahoma to get a seat on the House Appropriations Committee instead of supporting efforts to put anti-earmarker Rep. Jeff Flake, R-AZ on the panel are all par for the course.

The problem is the congressional wing of the GOP is all but the second caucus of the Government Party in Washington. Bush wimping out on what could be a milestone in the fight to restore limited government and a tremendous boost for Republican prospects in the 2008 campaign simply reflects the general lack of political courage in the GOP at the national level on spending and entitlements. These people love Big Government and won't take serious actions to reduce its size and scope of power.

The idea here is that because of the way earmarks are accomplished by Congress, the President is probably not constitutionally bound to spend the money on the earmarked projects. Apparently the President was thinking about signing an executive order that would tell the executive branch agencies not to spend the earmarked money in that way. It seems to me that would be a good thing, but alas, it appears now that the President will continue to join with the corruption of Congress. Reforming the corrupt practices of our government continues to be unlikely, and I should perhaps seek to refuge of the rationally ignorant.

Cold Weather Kills

Tyler Cowen:

Spells of extreme cold kill over 27,000 Americans each year, or about 700 people each very cold day. Heat waves may receive more publicity, but it turns out that cold periods — days with an average temperature below 30 degrees —have more significant and longer-lasting effects on human mortality. More people die in cold periods than in homicides.

Extreme cold brings cardiovascular stress as human bodies struggle to adjust to the temperature; many of the deaths in these periods come through heart attacks. Heat waves tend to kill people who were already weakened and would have died soon anyway; cold periods bring additional people to the verge of death.

When retired people move to a warmer state, their life expectancy rises dramatically. In fact, 8 to 15 percent of the increase in American life expectancy over the last 30 years comes from people moving to warmer climates, according to research done by two economics professors, Olivier Deschenes at the University of California, Santa Barbara, and Enrico Moretti, at the University of California, Berkeley.

I wonder the economists researching global warming have considered this in their analyses yet?

Fraudulent Borrowing

Tyler Cowen:

There has been plenty of talk about “predatory lending,” but “predatory borrowing” may have been the bigger problem. As much as 70 percent of recent early payment defaults had fraudulent misrepresentations on their original loan applications, according to one recent study. The research was done by BasePoint Analytics, which helps banks and lenders identify fraudulent transactions; the study looked at more than three million loans from 1997 to 2006, with a majority from 2005 to 2006. Applications with misrepresentations were also five times as likely to go into default.

Many of the frauds were simple rather than ingenious. In some cases, borrowers who were asked to state their incomes just lied, sometimes reporting five times actual income; other borrowers falsified income documents by using computers. Too often, mortgage originators and middlemen looked the other way rather than slowing down the process or insisting on adequate documentation of income and assets. As long as housing prices kept rising, it didn’t seem to matter.

In other words, many of the people now losing their homes committed fraud. And when a mortgage goes into default in its first year, the chance is high that there was fraud in the initial application, especially because unemployment in general has been low during the last two years.

This is interesting. If the President and Congress are going to look for policy responses to mortgage defaults, then shouldn't this be a big part of the policy discussion? In cases of borrower fraud, it seems to me that the mortgage contracts themselves probably suggest what government's role in the default should be, which is to enforce the contract's provision with respect to default. There wouldn't seem to me very solid normative grounds to have government "bail out" the borrower who had committed fraud in securing the mortgage.

The Selfishness Of Others

Walter Williams:

"Selfish" is a bit more useful term, and it's the human motivation that gets wonderful things done. For example, I think it's wonderful that Alaskan king crab fishermen take the time and effort, often risking their lives in the cold Bering Sea, to catch king crabs that I enjoy. Do you think they make that sacrifice because they care about me? I'm betting they don't give a hoot about me. They make it possible for me to enjoy king crab legs because they want more money for themselves. How much king crab would I, and millions of others, enjoy if it all depended on human love and kindness?

Politics & Intergenerational Justice

Robert Samuelson has some very important observations about the young and the old in this presidential campgaign:

The big lie of campaign 2008 -- so far -- is that the presidential candidates, Democratic and Republican, will take care of our children. Listening to these politicians, you might think they will. Doing well by children has now passed Motherhood and Apple Pie as an idol that all candidates must worship.

"We will do whatever it takes to make America a better country, to give our kids a better future," says Mike Huckabee, winner of the Republican Iowa caucuses.

"We will deliver for our children, our grandchildren and our great-grandchildren," claims Sen. Barack Obama, the Democratic winner.

"We're going to reclaim the future for our children," says Democratic Sen. Hillary Clinton.

Actually, these are throwaway lines, completely disconnected from reality.

Our children face a future of rising taxes, squeezed -- and perhaps falling -- public services, and aging -- perhaps deteriorating -- public infrastructure (roads, sewers, transit systems). Today's young workers and children are about to be engulfed by a massive income transfer from young to old that will perversely make it harder for them to afford their own children.

No major candidate of either party proposes to do much about this, even though the facts are well-known.

I view this forced income transfer from young workers to retired workers as intergenerational injustice, and I've posted on this thought before, here and here for example.

Samuelson concludes his commentary with this:

A moral cloud hangs over our candidates. Just how much today's federal policies, favoring the old over the young and the past over the future, should be altered ought to be a central issue of the campaign. But knowing the unpopular political implications, our candidates have lapsed into calculated quiet.

They pay lip service to children but ignore the actual programs that will shape their future. The hypocrisy is especially striking in Obama. He courts the young, promises "straight talk," and offers himself as the agent of "change." But his conspicuous omissions constitute "crooked talk" and silently endorse the status quo.

The insidious nature of this problem is that because the spending increases for the elderly occur gradually, the pressures on taxes and other government programs will also intensify gradually. A crucial moment to clarify the stakes and compel politicians to make choices probably won't occur until it's too late.

The longer we delay -- and we've done so now for several decades, because the strains created by an aging society have been obvious that long -- the more likely that eventual "solutions" will be unfair to both young and old. To acknowledge that and to come to grips with it would constitute genuine "change."

Social security and the allied government programs seems to have always been discussed by our political leaders in terms of a big lie. It seems unlikely this will change any time soon. Both President Clinton and President Bush made efforts to reform social security in needed directions, and in both cases politics stopped the efforts.

Is it ironic that Senator Obama draws young voters in large numbers when it seems he too has little interest in reforming intergenerationally unjust programs? Or, perhaps the young voters are unconcerned about what government has promised as their very large tax burdens? Or, perhaps young voters are rationally ignorant, as we tend to assume all voters are in public choice analysis? Or perhaps young voters are merely irrational?

Santa Claus Politics

Tom Sowell, as always, gets to the heart of the matter, in this case explaining the nature of politics as being somehow like Santa Claus. Here is the way he concludes his commentary to begin the new year:

After the departure of Senator Phil Gramm and House Majority Leader Dick Armey, Congress has been an economics-free zone. There is not one economist among the 535 members of Congress.

But, in an election year, that is not a political handicap. Santa Claus has won far more elections than any economist.

What does he mean about Santa Claus winning elections?

Senator Hillary Clinton's Christmas commercial, showing various government programs as presents under a Christmas tree, was a classic example of calculated confusion in politics.

Anyone who believes that the government can give the country presents has fallen for the oldest political illusion of all -- the illusion of something for nothing.

Santa Claus may turn out to be the real front-runner in the primaries, judging by the way candidates are vying with one another to give away government goodies to the voters.

Santa Claus is bipartisan. The Bush administration is unveiling its plan to rescue people who gambled and lost in the housing markets when the bubble burst.

We now have a bipartisan tradition of the government stepping in to rescue people who engaged in risky behavior -- whether by locating in the known paths of hurricanes in Florida or in areas repeatedly hit by wildfires over the years in California or by doing things that increase the probability of catching AIDS.

Why not also rescue people who gambled away their life's savings in Las Vegas? That would at least be consistent.

Apparently the only people who are supposed to be responsible are the taxpayers -- and they are increasingly made responsible for other people's irresponsibility.

Military conscription is long gone. But taxpayers are still being conscripted to play Santa Claus.

Go ahead. Read the entire piece and consider just how well Sowell helps us understand politics, politicians, and government

Health Insurance: The Young & The Old

Betsy McCaughey discusses proposals to have government mandate that everyone buy health insurance. This is a policy idea that seems to have a pretty prominent position in the political agendas of several presidential candidates. There is an interesting implication of such a public policy:

The first myth is that it's fair to make everyone pay the same price for health insurance. It is not: For young people who rarely use health services, this is a rip-off. If people in their 20s paid attention to politics and voted, politicians wouldn't dare try this.

According to the latest Census data, 56% of the uninsured are adults aged 18-34. True enough, forcing them to be a part of a same-price-for-everyone insurance pool will likely bring down premiums. These young people generally need minimal health care ($1,500 a year, on average, according to a Commonwealth Fund study).

In most states, (but not New York and Vermont), young adults who buy health insurance are charged premiums that reflect their low medical needs. A 25-year-old man can buy a $1,000 deductible policy for a quarter to a third of what a 55-year-old man has to pay. (In Manchester, N.H., a 25-year-old man pays $156 per month, while a 55-year-old pays $542 for the same policy, according to ehealthinsurance.com).

Both the Clinton proposal and the bipartisan congressional proposal prohibit insurers from giving such price breaks to the young. Their mandates would force the young to subsidize the heath tab for the middle-aged generation. This subsidy would come on top of the payroll tax younger people already pay to support today's Medicare recipients. This is contrary to a fundamental American principle. This nation has always believed in making life better for its children, not exploiting them.

I used to think, when I was young and naive, that there was just such a "fundamental American principle." But, then, sometime in my recent past, I decided to try to understand the social security program. After cutting through all the political rhetoric about social security it is quite clear it is a program which uses government's power to tax to take income from young workers in order to give it to old retired workers. Of course, social security is a program that has been around for some time now. So, I no longer think America holds to such a fundamental principle, and it seems to me the proposed health insurance mandates continue what is now a pretty long tradition of government taking from those who are younger in order to give to those who are older (and often these transfers are also from those who are relatively poor to those who are relatively wealthy).

Alien Concepts, Reluctant Minds

Peter Boettke's comments on a New York Times article:

The problem is that various statements in the piece are so misinformed theoretically, empirically, and policy application wise that it is hard to know where to start to set the matter straight. But the article is extremely useful as a means to remind us as economic educators that our work is cut out for us and that it does take varied reiterations to force alien concepts upon reluctant minds.

I agree there are far too many problems in the piece to know where to begin a critical analysis. The piece does make an interesting read, especially if, as a member of the club of dismal scientists, you like to be discouraged. Here is how the piece ends:

“Untethered market forces lead to bad things,” said Mr. Bernstein of the Economic Policy Institute. “You simply can’t run an economy as complicated as ours on ideology alone.”

I would like to borrow just a bit from Mr. Bernstein's comment here to say: "You simply can't run an economy." The "economy" emerges. It simply is not possible to have sufficient knowledge come to reside in the minds of government bureaucrats to "run an economy" in order to achieve the great good things politicians and bureaucrats have in mind for us.