June 15, 2017

Activists lobbying the UN to make cultural appropriation an international crime

The stupid, it burns:

Due to the fact that the United Nations doesn’t have anything more important to deal with, delegates from 189 countries, including the United States and Canada, are lobbying in Geneva for the organization to institute laws to make cultural appropriation illegal – and for those laws to be implemented quickly.

The delegates are a part of a specialized international committee in the World Intellectual Property Organization (WIPO) which was founded in 2001 to expand intellectual property regulations to protect indigenous art, forms of expression like dance, and even words.

According to CBC, James Anaya, dean of law at the University of Colorado, said that the United Nations document should “obligate states to create effective criminal and civil enforcement procedures to recognize and prevent non-consensual taking and illegitimate possession, sale and export of traditional cultural expressions.”

Not only could the state put you in jail for cultural appropriation, those who feel as though their culture is appropriated would be able to sue you for damages. In other words, you could go to jail for making and selling burritos if you’re not Mexican, or wearing a kimono while white.

There has never been a human culture that has not “appropriated” from other cultures except for those so isolated that they never encounter other cultures. Appropriation is literally older than civilization, and no action of WIPO is going to change that. It may, however, provide even more ways for emotional and legal blackmail to be made profitable, and give even more tools to those who long to force others to bend to their will.

Ed Krayewski has more at the Hit and Run blog:

What sort of appropriation does the committee want to stop? University of Colorado Law Dean James Anaya, an indigenous leader and a technical analyst for the IGC, points to products that purport to be made or endorsed by indigenous groups but aren’t. At the Geneva meeting, Anaya offered Urban Outfitters’ “Navajo line” as an example. The Navajo Nation actually brought suit in U.S. court against Urban Outfitters over that line of products in 2012, and the case was settled out of court last year. It’s unclear how an international intellectual property bureaucracy would improve the situation.

But it’s clear how it could create new avenues for rent-seeking. The World Intellectual Property Organization generates revenue from fees, such as the ones it charges for international trademarks. Any system the IGC creates is likely to include a similar international mechanism for registering whichever “traditional cultural expressions” get protections. Such a setup could have a chilling effect on any commercialization of folklore, even by members of the original indigenous communities.

After all, the same forces of globalization and decentralization that have made intellectual property laws more difficult to enforce offer the potential to drastically expand native producers’ reach. KPMG has noted, for example, that the internet offers a “new potential for indigenous Australians in regional and remote areas to access global audiences.” An IGC-style intellectual property regime would inevitably require such entrepreneurs, not just the big corporations accused of cultural appropriation, to get additional approvals for their activity.

Meanwhile, the same governments with long histories of abusing indigenous populations would be responsible for deciding who belongs to such populations and who faces criminal penalties for not meeting the governments’ definitions. Kathy Bowrey, a law professor at the University of New South Wales in Australia, tells Reason that she would love to see the IGC succeed in setting up an system that genuinely protects indigenous culture. But she has no hopes that it will. Given the “racist practices that mark everyday lives of First Nations people domestically,” she says, “I’m not sure why there is an expectation that these states would operate differently on the international stage.”

December 7, 2016

QotD: Turning ordinary recycling into a vast revenue enhancement tool

Filed under: Economics, Government, Quotations, Technology — Tags: , , — Nicholas @ 01:00

… we know that ubiquitous RFID tags are coming to consumer products. They’ve been coming for years, now, and the applications are endless. More to the point they can be integrated with plastic products and packaging, and printed cheaply enough that they’re on course to replace bar codes.

Embedded microcontrollers are also getting dirt cheap; you can buy them in bulk for under US $0.49 each. Cheap enough to embed in recycling bins, perhaps? Along with a photovoltaic cell for power and a short-range radio transceiver for data. I’ve trampled all over this ground already; the point is, if it’s cheap enough to embed in paving stones, it’s certainly cheap enough to embed in bins, along with a short-range RFID reader and maybe a biosensor that can tell what sort of DNA is contaminating the items dumped in the bins.

The evil business plan of evil (and misery) posits the existence of smart municipality-provided household recycling bins. There’s an inductance device around it (probably a coil) to sense ferrous metals, a DNA sniffer to identify plant or animal biomass and SmartWater tagged items, and an RFID reader to scan any packaging. The bin has a PV powered microcontroller that can talk to a base station in the nearest wifi-enabled street lamp, and thence to the city government’s waste department. The householder sorts their waste into the various recycling bins, and when the bins are full they’re added to a pickup list for the waste truck on the nearest routing — so that rather than being collected at a set interval, they’re only collected when they’re full.

But that’s not all.

Householders are lazy or otherwise noncompliant and sometimes dump stuff in the wrong bin, just as drivers sometimes disobey the speed limit.

The overt value proposition for the municipality (who we are selling these bins and their support infrastructure to) is that the bins can sense the presence of the wrong kind of waste. This increases management costs by requiring hand-sorting, so the individual homeowner can be surcharged (or fined). More reasonably, households can be charged a high annual waste recycling and sorting fee, and given a discount for pre-sorting everything properly, before collection — which they forefeit if they screw up too often.

The covert value proposition … local town governments are under increasing pressure to cut their operating budgets. But by implementing increasingly elaborate waste-sorting requirements and imposing direct fines on households for non-compliance, they can turn the smart recycling bins into a new revenue enhancement channel, much like the speed cameras in Waldo. Churn the recycling criteria just a little bit and rely on tired and over-engaged citizens to accidentally toss a piece of plastic in the metal bin, or some food waste in the packaging bin: it’ll make a fine contribution to your city’s revenue!

Charles Stross, “The Evil Business Plan of Evil (and misery for all)”, Charlie’s Diary, 2015-05-21.

August 16, 2016

QotD: The real danger of expanding the power of the state

Filed under: Government, Quotations — Tags: , , — Nicholas @ 01:00

Every expansion of the state incites more people to compete – and to compete more intensely – to possess the power over others that that expansion brings. From each individual’s perspective, it’s better to be in the group that exercises power rather than in the groups against whom the power is exercised. Unlike competition in markets, competition for power wastes material resources and human time and energy (rent-seeking wastes); such competition is never win-win but, rather, win-lose. But also unlike competition in markets, competition for power results in the worst form of inequality – indeed, the only form of inequality that warrants legitimate concern – namely, inequality of power. Those with state power, regardless of how they acquire it, can command those without state power. Those with state power use force to override the choices of those without state power. Those with state power do the choosing; those without state power do the obeying.

Unlike market-enabled differences in monetary incomes and wealth, this species of inequality – inequality of power – is inhumane and destructive, and it results from humans’ most primitive impulses.

Don Boudreaux, “Quotation of the Day…”, Café Hayek, 2016-07-25.

September 25, 2015

Reducing income inequality

Filed under: Bureaucracy, Business, Economics, USA — Tags: , , , , — Nicholas @ 02:00

Tim Worstall in Forbes:

There’s a fascinating and very long essay over in National Affairs about how we might cut income inequality. And, contrary to what any number of Democratic candidates for office will tell you, the answer isn’t to impose ever more regulation upon the economy. Rather, it’s to strip away some of the regulation that allows certain favoured income groups to make excessive incomes. Excessive here defined as greater than the economic value they add to the lives of the rest of us, something they achieve by carving out economic rents for themselves. I would, myself, go rather further than the writer, Steven Teves, and start using Mancur Olson’s analysis, that this is what democratic (note, democratic, not Democratic) politics always devolves down into, a carving up of the public sphere to favour certain interest groups. But even this milder version gives us more than just hints about what we should be doing:

    At the same time, however, we have seen an explosion in regulations that shower benefits on the very top of the income distribution. Economists call these “rents,” which we can define for simplicity’s sake as legal barriers to entry or other market distortions created by the state that create excess profits for market incumbents.

Let us take one very simple example of such rents. The earnings of those who possess taxi medallions in cities where there’s an insufficient number issued. Until very recently one such medallion, allowing one single cab to operate on the streets of NYC 24/7, had a capital value of $1 million. That led to a rent, a pure economic rent, of $40,000 a year to allow one cab river to use that medallion for 12 hours of the day. and, obviously, another $40,000 to allow another to use it for another 12 hours a day.

That is purely a rent: and one created by New York City not issuing enough medallions to cover the demand for cab services. Uber has of course exploded into this market and the success of that company, along with its many competitors, shows how pervasive the creation of such rents by limiting taxi numbers has been in cities around the world. That is an obvious and very clear creation of a rent purely through bureaucratic action.


Deregulating the economy will remove many of those rents. This will reduce income inequality. So, why aren’t those who rail against income inequality shouting for deregulation? Good question and the only proper answers become increasingly cynical. Unions exist for the purpose of creating rents for their members. So, given the union participation in the Democratic Party we’re not going to see calls for deregulation from that side. And different groups, those car dealers perhaps, the doctors, have their hooks into the Republican Party too.

My own answer is that it needs to be done in the same manner that Reagan treated the tax code. Not that I’m particularly stating that Reagan’s tax changes were quite as wondrous as some now think they were, only that it all had to be approached on a Big Bang basis. Everything had to be on the table at the same time so that while there were indeed those who would defend their little corner the over riding interest of all was that all such little corners got eradicated. With this rent creation, given that so much of it is at State level, that won’t really work. Except for one idea that I’ve floated before.

September 1, 2015

Bet you didn’t see this coming – Koch and Sanders working together

As everyone on the left knows, the Koch brothers are blackest avatars of evil incarnate and any of their works are tainted with pure, unadulterated evil … which might make some heads explode because The Intercept is reporting that the Koch fortune might be put to work to help elect Bernie Sanders:

I have a prediction: Charles and David Koch will soon announce they’re backing Bernie Sanders for president.

Here’s my logic, which is irrefutable:

We know the Koch brothers, and the organizations they fund, hate corporate welfare more than anything. They hate it!

The top priority of Freedom Partners, which oversees the Koch network of donors, is “tackling ‘rent-seeking,’ ‘corporate welfare,’ and other forms of cronyism.”

Charles Koch himself just told Politico’s Mike Allen that “We have to show that this corporate welfare and cronyism is unjust.” Sure, said Koch, it makes their friends unhappy, but “so what? You’ve got to do the right thing.” So as Allen wrote, “Rolling back corporate welfare is one of the top issues Koch is pursuing.”

Similarly, when Koch spoke recently to 450 of his fellow big donors at a recent Koch event in California, he demanded that “they have to start opposing, rather than promoting, corporate welfare.” In the Wall Street Journal, Koch wrote that “I have spent decades opposing cronyism and all political favors, including mandates, subsidies and protective tariffs.”

It might sound outlandish, but there aren’t many of the four hundred Republican candidates who are as staunch against crony capitalism, corporate welfare, and rent-seeking as good old self-declared socialist Bernie Sanders (aside from Rand Paul, I can’t think of any current Republican candidates who might even hint at biting the corporate hands that feed their campaigns’ insatiable demand for fresh funding…).

January 3, 2015

Last year, “a Kentucky judge did something no federal judge has done since 1932”

Filed under: Business, Law, Liberty, USA — Tags: , , , , , — Nicholas @ 11:44

It’s been a very long time since a federal judge in Kentucky anywhere in the United States has struck down a “certificate of necessity” (CON) regulation:

Mighty oaks from little acorns grow, so last year’s most encouraging development in governance might have occurred in February in a U.S. district court in Frankfort, Ky. There, a judge did something no federal judge has done since 1932. By striking down a “certificate of necessity” (CON) regulation, he struck a blow for liberty and against crony capitalism.

Although Raleigh Bruner’s Wildcat Moving company in Lexington is named in celebration of the local religion — University of Kentucky basketball — this did not immunize him from the opposition of companies with which he wished to compete. In 2012, he formed the company, hoping to operate statewide. Kentucky, however, like some other states, requires movers to obtain a CON. Kentucky’s statute says such certificates shall be issued if the applicant is “fit, willing and able properly to perform” moving services — and if he can demonstrate that existing moving services are “inadequate,” and that the proposed service “is or will be required by the present or future public convenience and necessity.”

Applicants must notify their prospective competitors, who can and often do file protests. This frequently requires applicants to hire lawyers for the hearings. There they bear the burden of proving current inadequacies and future necessities. And they usually lose. From 2007 to 2012, 39 Kentucky applications for CONs drew 114 protests — none from the general public, all from moving companies. Only three of the 39 persevered through the hearing gantlet; all three were denied CONs.

Bruner sued, arguing three things: that the CON process violates the Constitution’s equal protection clause because it is a “competitors’ veto” that favors existing companies over prospective rivals; that the statute’s requirements (“inadequate,” “convenience,” “necessity”) are unconstitutionally vague; and that the process violates the 14th Amendment’s protections of Americans’ “privileges or immunities,” including the right to earn a living.

November 9, 2014

Rent-seekers and crony capitalists love big government

Filed under: Bureaucracy, Government — Tags: , , , , — Nicholas @ 10:38

One of the reasons I’m a small-government fan is that the less the government tries to do, the less opportunity for rent-seekers and crony capitalists to batten on the inevitable opportunities that big government provides when it controls and regulates far beyond its competence:

A nice little point being made over in the New York Times, that for all of the public rhetoric about free markets and competition it’s not actually true that the Republicans are entirely pro-free market and pro-competition at all levels of governance. There’s an explanation for this too, an explanation that comes from the late economist Mancur Olsen. That explanation being about the level of the system that decides what will happen on a particular matter and thus where the special interests will try to capture governance.

    Republicans have hailed Uber, the smartphone-based car service, as a symbol of entrepreneurial innovation that could be strangled by misplaced government regulation. In August, the Republican National Committee urged supporters to sign a petition in support of the company, warning that “government officials are trying to block Uber from providing services simply because it’s cutting into the taxi unions’ profits.”

Josh Barro then goes on to point out that while the national Republican party might be saying such fine words when we get down to the people who actually regulate taxi rides then local Republicans can be just as pro-taxis and anti-Uber as any group of Democrats.

[…] More likely, to me at least, is that Mancur Olsen had it exactly right. His point being that over time democracy will end up being a competition between special interests for control of that democratic apparatus. The basic background insight is spread costs and concentrated benefits. One analogy is the pig and the chicken deciding what to have for breakfast. If they decide upon bacon and eggs then the chicken is interested but the pig is rather committed there. So it is with the regulation of producers and the competition that they might faced. US consumers of sugar might be paying $50 a year each to protect US sugar producers (that number’s not right but it’s not far off, it’s not $5 each nor $500) but rationally, when there’s so much else for us to think about, it’s sensible enough for us to not get very excited nor angry about this. But the sugar producers are making millions a year out of that same system of restrictions and subsidies. They’re very interested indeed in making sure that it continues.

We who take taxis or Uber are quite interested in Uber (and Lyft and all the others) being able to continue in business. But it’s not the end of our lifestyle if the regulatory apparatus is able to stifle them. But for the people who, for example, own taxi medallions in NYC then the replacement of the traditional taxi market by Uber will mean the potential loss of up to $1 million for each medallion. They’re very much more interested in crimping Uber’s style than we consumers are in expanding it.

Olsen went on to point out that the special interests are obviously more interested than we are in the details of regulation. And they’ll concentrate their efforts at whatever level of the regulatory and democratic system it is that affects their direct interests. Contributing to election campaigns, making their views known and so on, wheeling and dealing to promote their interests.

May 27, 2014

QotD: What capitalism should do now

Filed under: Business, Economics, Quotations — Tags: , , , , — Nicholas @ 07:13

Just as democracy can be corrupted by repressive populism, so can capitalism be perverted by “rent-seeking” — when people seek to gain more than the goods and services they produce are worth to others.

Sometimes they use political influence to sustain monopolies or to prevent new entrants and innovators from competing for custom. Sometimes they use governments to provide subsidies from taxpayers, or to prohibit cheaper imports.

Sometimes they do deals with governments that provide taxpayer funds to cushion losses derived from incompetence or recklessness. These forms of crony capitalism detract from capitalism’s real benefits and achievements.

What capitalism should now do is to free itself from these rent-seeking perversions and spread its benefits as widely as possible.

It should act against anti-competitive practices to give people instead the power of free choices between competing goods and services. It should spread ownership of capital and investment as widely as possible through such things as personal pensions and individual savings accounts.

It should lower the barriers to entry so that everyone can aspire to start up a business to bring goods and services to others. It should seek a tax system that rewards success rather than punishing it.

Capitalism should become inclusive, making it as easy and as attractive as possible for as many as possible to set aside some part of present consumption in order to invest some of their resources and their time in providing goods and services that others will want. It should become true capitalism.

Dr. Madsen Pirie, contributing to “Viewpoints: What should capitalism do?”, BBC News, 2014-05-26.

September 11, 2013

What do libraries have to do with rent seeking?

Filed under: Books, Bureaucracy, Economics, Education — Tags: — Nicholas @ 07:46

As Logan Albright explains, quite a lot:

Libraries are wonderful places. There is nothing like a vast repository of knowledge, filled with undiscovered treasures for anyone who cares to look. They provide free access to information, both in book form and over the internet, to people would otherwise not be able to afford it. All in all, it’s a lovely service. But as much as I enjoy them, libraries also provide a useful example of the inefficiencies of the public sector and the numerous problems with government funded programs.

You may not realize it, but most librarian jobs these days require a specialized education – a master’s degree in the field of Library Science. The curriculum of such a degree varies from school to school, but the main focus is on using a variety of complex databases, as well as interacting with the public. Why is such a specialized form of education required to work in a library? It’s not like a degree in aeronautics or medicine where actual lives could depend on your competence. A quick search for the job duties of a reference librarian turns up the following: “A reference librarian provides assistance to users of a library who need help locating resources and information.” The average salary for a reference librarian? $39,659 – $55,008. Other library science related jobs can make as much as $100,000 a year.

Of course, it’s not as simple as all that. Locating information in a library database is not like searching Google. It requires specialized skills. You can’t simply type in what you want and expect to get it. The obvious question here is: why not?

The simple answer is that the public funding structure of libraries provides no incentive to improve things. In fact, it encourages just the opposite. Since the library’s budget does not depend on how many customers it pleases, there is no compelling reason to make things easier. Since a library’s revenues come from the public coffers and not from the pockets of voluntary patrons, there is no competitive pressure to keep costs low.

September 26, 2012

Shakespeare’s Henry V: public choice theory in the 15th century

Filed under: Economics, Government, History, Media — Tags: , , , — Nicholas @ 09:37

In The Freeman, Sarah Skwire points out that the opening act of Shakespeare’s Henry V — while boring to those hoping for battle and carnage — explains the public choice economic theory of rent-seeking:

Shakespeare’s Henry V — a favorite of theater companies and movie studios — begins with an invocation of the muse of fire, presumably because only her powerful heat and light can provide the inspiration necessary for Shakespeare’s great task of bringing forth so “great an object” on “this unworthy scaffold.” The prologue promises, after all, that we are about to see the armies of two great monarchies clash at the famous battle of Agincourt. A plea for divine aid seems only reasonable.

After all that buildup, however, the opening scene of the play has to be one of the dullest stretches in all of Shakespeare’s writing. Promised a ferocious battle with knights and horses and blood and thunder, we are given instead more than one hundred straight lines of a highly technical legal discussion between the Bishop of Canterbury and the Bishop of Ely. It is historically accurate. It is important. And it is exceptionally tedious.

It is tedious, that is, unless you are familiar with one basic piece of Public Choice theory.

Gain without Mutual Benefit

One its core concepts is the idea of rent-seeking. Unlike profit-seeking, which aims at mutually beneficial trade, rent-seeking is the attempt to use the political process to capture a bigger slice of wealth for oneself. Unlike trade, there is no mutual benefit. No wealth is created. The only profit is to the rent-seeker, and possibly his cronies. With that in mind, the opening scene of Henry V is gripping. It is no longer more than one hundred lines of fifteenth-century legal trivia. It is more than one hundred lines of some of the most explicit, uncensored, behind-the-scenes rent-seeking action in literary history.

August 11, 2012

The Broadcasting Treaty zombie rises from the grave

Filed under: Law, Media, Technology — Tags: , , , , , — Nicholas @ 09:31

Cory Doctorow explains why we still need to fight against WIPO’s latest attempt to gain even more legal rights over content:

The UN’s World Intellectual Property Organization’s Broadcasting Treaty is back. This is the treaty that EFF and its colleagues killed five years ago, but Big Content won’t let it die. Under the treaty, broadcasters would have rights over the material they transmitted, separate from copyright, meaning that if you recorded something from TV, the Internet, cable or satellite, you’d need to get permission from the creator and the broadcaster to re-use it. And unlike copyright, the “broadcast right” doesn’t expire, so even video that is in the public domain can’t be used without permission from the broadcaster who contributed the immense creativity inherent in, you know, pressing the “play” button. Likewise, broadcast rights will have different fair use/fair dealing rules from copyright — nations get to choose whether their broadcast rights will have any fair dealing at all. That means that even if you want to reuse video is a way that’s protected by fair use (such as parody, quotation, commentary or education), the broadcast right version of fair use might prohibit it.

Worst of all: There’s no evidence that this is needed. No serious scholarship of any kind has established that creating another layer of property-like rights will add one cent to any country’s GDP. Indeed, given that this would make sites like Vimeo and YouTube legally impossible, it would certainly subtract a great deal from nations’ GDP — as well as stifling untold amounts of speech and creativity, by turning broadcasters into rent-seeking gatekeepers who get to charge tax on videos they didn’t create and whose copyright they don’t hold.

June 27, 2012

John Kay on the evils of rent-seeking

Filed under: Economics, Government, Politics — Tags: , , , , , — Nicholas @ 08:08

Broadly speaking, wealth can be accumulated in two distinctly different ways. It can be earned through hard work, innovation, and competition, or it can be extracted from the public by use of coercive methods, corruption, and misappropriation:

Whatever the true extent of the Mubarak family fortune, it stands in stark contrast to the lot of most Egyptians. Gross domestic product per capita in Egypt is a mere $2,500. In western Europe and North America GDP per capita is about $40,000, yet the capacities of Egypt’s intellectual and entrepreneurial elite are the rival of any state in the world.

The real damage imposed by men such as Mr Mubarak is not the money they might have stolen. The tragedy is that the system that enables them to steal it destroys opportunities for others to generate wealth — not only for themselves but for the whole population.

The price of requiring a potential Mark Zuckerberg or Mr Gates to pay a $100 bribe to each of 10 officials before he can establish his new business is not the $1,000 creamed off by corrupt bureaucrats. It is the far greater one of lost businesses that never came into being because the licensing process that makes such corruption possible was not navigated. In the meantime, people who might be successful entrepreneurs choose instead to seek political power. If business is endlessly frustrating and politics endlessly rewarding, the career choice for able and enterprising people is obvious.

Institutions are the key influence on economic prosperity — West Germany did not outperform East Germany because of its excellent monetary policies. And, as Daron Acemoglou and James Robinson point out in their book, Why Nations Fail, a critical feature of successful economic institutions is that they limit the scope for what these authors call “extractive activity” — others have described it as predation or rent-seeking — which appropriates the wealth created by other people.

January 18, 2012

Why the rent seekers have been pushing for SOPA and PIPA

Filed under: Law, Liberty, Technology, USA — Tags: , , , , , , — Nicholas @ 10:41

Max Titmuss at the Adam Smith Institute summarizes the key points that make SOPA and PIPA so attractive to rent seekers:

The provisions put forward in SOPA and PIPA enable the closing down and harassment of websites (not even necessarily located in the US) on the flimsiest of pretences: government censorship masquerading as copyright protection. But what exactly makes the laws so odious? There are four key, objectionable provisions, all of which are ripe for manipulation by rent-seeking parties (summarised from this link):

  1. The Anti-Circumvention Provision, allowing the US government to close sites who offer advise on merely circumventing censorship mechanisms;
  2. The “Vigilante” Provision, which would grant immunity from prosecution to internet service providers who pre-emptively block potentially offending sites, leaving them inherently vulnerable to pressures from a host of interested parties;
  3. The Corporate Right of Action, enabling copyright holders to obtain an unopposed court order which would cut off foreign websites from payment processors and advertisers;
  4. Expanded Attorney General Powers: therein giving the Attorney General the power to block any domain name and have their results barred from search engines: they would effectively cease to exist.

You don’t need to be a rabid libertarian to realise both SOPA and PIPA are anathema to a society which readily proclaims its commitment to spreading liberal democracy; an integral part of which is the freedom of expression. After all, western nations have waged war purportedly in support of ‘freedom’ and regularly (this time rightly) criticise those nations which continually suppress freedom of expression online.

January 8, 2012

George F. Will on big government

Filed under: Bureaucracy, Economics, Government, Politics — Tags: , , , , — Nicholas @ 10:54

Even fans of bigger government should recognize the accuracy of this short summary:

Liberals have a rendezvous with regret. Their largest achievement is today’s redistributionist government. But such government is inherently regressive: It tends to distribute power and money to the strong, including itself.

Government becomes big by having big ambitions for supplanting markets as society’s primary allocator of wealth and opportunity. Therefore it becomes a magnet for factions muscular enough, in money or numbers or both, to bend government to their advantage.

The left’s centuries-old mission is to increase social harmony by decreasing antagonisms arising from disparities of wealth — to decrease inequality by increasing government’s redistributive activities. Such government constantly expands under the unending, indeed intensifying, pressures to correct what it disapproves of — the distribution of wealth produced by consensual market activities. But as government presumes to dictate the correct distribution of social rewards, the maelstrom of contemporary politics demonstrates that social strife, not solidarity, is generated by government transfer payments to preferred groups.

[. . .]

The tax code, government’s favorite instrument for distributing wealth to favored factions, has been tweaked about 4,500 times in 10 years. Generally, the beneficiaries of these changes are interests sufficiently strong and sophisticated to practice rent-seeking.

Not only does redistributionist government direct wealth upward; in asserting a right to do so it siphons power into itself. A puzzling aspect of our politically contentious era is how little contention there is about the ethics of coercive redistribution by progressive taxation and other government “corrections” of social outcomes it considers unethical or unaesthetic.

December 8, 2011

“Pure socialism” in the Soviet Union

Filed under: Economics, History — Tags: , , , — Nicholas @ 08:53

Nicholas Snow summarizes the only serious attempt to implement “pure socialism” in the first years after the Russian revolution:

The closest the Soviet Union came to actual pure socialism was the period known as War Communism, 1918 to 1921. This period is unanimously seen as a disaster, even among socialists. Production fell in most if not all industries, and millions starved to death. From then on the Communist Party struggled to keep hold of both their Marxist ideology and their power. Naturally the latter took precedence, and as a result the price system, which they originally wanted to abolish, took on a larger and larger role. [. . .]

The Soviets certainly liked to keep up appearances. At a glance the Soviet economy looked centrally planned. The planning board for each industry set output levels, and the State owned de jure all means of production. A closer look, however, revealed a different story. As Boettke and Anderson pointed out, the Soviet economy was closer to that of a mercantilist economy, a heavily regulated market economy effectively run by rent-seeking government officials and factory managers. De facto, the factory managers were the owners and residual claimants. They paid the State for the right to run the factory, and in return the State created a monopoly for them, just as in the mercantilist system of old.

Middlemen, known as the Tolkachi, worked on behalf of the State enterprises to sell surplus commodities on the one hand and purchase needed products on the other. They essentially created a market that allowed for economic calculation not possible under a pure socialist system.

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