Britain: joining Euro?

AFP (BREITBART.COM) | Britain is considering joining the eurozone as a direct consequence of global financial turmoil, European Commission President Jose Manuel Barroso said Sunday.

“We are now closer than ever before. I’m not going to break the confidentiality of certain conversations, but some British politicians have already told me: ‘If we had the euro, we would have been better off’,” Barroso told a weekly French news programme, referring to the fall in the pound’s value since markets and liquidity meltdown earlier this year.

“The British have an enormous quality, one of many, that is they are pragmatic,” he said on the panel of a joint RTL-LCI radio and television broadcast. “This crisis has emphasised the importance of the euro, and also of Britain,” he added.

“I don’t mean this will happen tomorrow, I know that the majority (of British people) are still opposed, but there is a period of consideration underway and the people which matter in Britain are currently thinking about it,” the former Portuguese prime minister said.

Barroso pointed to the case of Denmark, another EU state which has so far refused to accept the euro but is now planning another referendum on the single currency. The Danish voted against joining in 2000.>>>>Read the Full Article

An Ear for An Ear?

TAYLORSVILLE, UT | 13 August 2008 | The Fairness Doctrine, under the Media Ownership Reform Act, a bill that would force broadcasters to give equal air time to opposing sides of issues, has made the rounds in Congress lately. After being brought up by Democrats for consideration a few months ago, it was countered by the Republican sponsored Broadcaster’s Freedom Act, a bill that would ban the Fairness Doctrine from ever being passed. In childish response, House Speaker Pelosi then vowed that the Broadcaster’s Freedom Act would never come to the floor for a vote. At a virtual stalemate, both bills have been tabled as Congress has broken for their summer vacation. There has been talk that the Fairness Doctrine could be brought back to light after the inauguration of a new president.In covering the ongoing banter, both the liberal and conservative wings of the media have focused almost exclusively on how they perceive the doctrine affecting their rights to free speech. Liberals feel that talk radio and other venues have been unfairly overrun by right wing nuts and that their side of the story isn’t being heard. Conservatives feel that regulated free speech is a horrific contradiction of terms that can never work. And, while free speech is important enough to have been the front-runner amendment in the Bill of Rights, focusing on it alone will cause us to miss the bigger picture—the fact that freedom itself is at stake in this debate.

Key Points

• The Declaration of Independence and Constitution are the greatest and most significant examples of proper use of free speech. After seeing that their cries for change had fallen on deaf ears, the Founders set forth a system of checks and balances that would allow for grievances to be effectively addressed.
• Regulation of free speech is a removal of those checks and balances. If one cannot address his views of a problem without fear of sanction, he has no avenue in which to protect his freedoms.
• While the Fairness Doctrine doesn’t provide direct sanctions against speech, it takes steps in that direction by limiting the amount that can be said. Effectively slicing broadcast time in half, it forces stations to cap the discussion from either side of any issue. Failure to provide equal airtime to either side (or to find someone willing to fill the necessary time slots for both sides) would result in sanctions.
• Plato said, “Where no contradiction is evident, there is no cause for reflection.” Opposing views are needed in the debate process to help us refine our views of truth and error.
  However, forcing the public to listen to views that are unprincipled or flat-out wrong will cause gradual acceptance of these ideas. Sales trainings often teach that repeated exposure to a concept will eventually break down objections and build familiarity and acceptance. This is also a tactic of the socialist agenda.
• Continued exposure to diametrically opposed ideas will lead to schizophrenic confusion and inaction (if the public are dumb enough to not turn off the radio when needed). Liberals foster this sense of helplessness in order to create a need for and dependence on government solutions, which is also a tactic of the socialists.
• In the free market system intended by the Founders, there is no need for a doctrine to mandate fairness. People are free to share their opinions and the system will sort out good from evil, truth from concoction. Dollars follow value and market will see that voices that are meant to be heard are heard.

Conclusion

Because a free market system will see that truth is brought to the forefront, one must question the motives of anyone who seeks to regulate or eliminate that system. If elected officials are doing what they believe is right, they will feel no need to regulate what is said about their actions. As they often have no idea what is right or do things that they know to be wrong, they fear people’s opinions and shy away from criticism.

It has been said that no single drop feels that it is responsible for the flood. But, regulated speech is always one of the first drops to hit the masses as the floodgates of socialism are opened. Viewing the Fairness Doctrine as either fair or harmless shows a wanton disregard for the principles that maintain and guard our freedoms. To see such a doctrine being considered in a free country is ludicrous. To see that it is being pushed by liberal minds who have often considered themselves the defenders of free speech is infuriating.

Action Items

1. Read the First Amendment to the Constitution.
2. Post here as to what you believe the Founders intended with this amendment and how Americans have mistranslated that intent.
3. Consider contacting your Congressman to express your concern about the loss of freedom that the Fairness Doctrine would lead to.
4. Support freedom in talk radio—listen to FreeCapitalist Radio live or via podcast, or check your local listings for a chanel in your area.

MRFC Principles: (7, 9, 11, 12)

Source

“Fairness Doctrine Vote Not In The Cards”, FMQB.com, Aug 1, 2008.

(Matthew Pilling is a member of the FreeCapitalist movement known as the Canadian Capitalist. Despite his time in the Great White North, Matthew loves America and all that it stands for. He lives with his wife and two children in Taylorsville and works in finance.)

Fast Food Slow Down in L.A.

TAYLORSVILLE, UT | 30 July 2008 | Amidst the ongoing news of a heated and controversial election, failing companies and markets, and myriad world conflicts, talk of fast food seems a low priority. The city of Los Angeles thinks otherwise, however. In a unanimous vote, the city council voted on Tuesday decided to “place a moratorium on new fast food restaurants in an impoverished swath of the city.”Their reasoning? “A proliferation of such eateries and above average rates of obesity.”

Their goal? “To attract restaurants that serve healthier food.”

Their problem? For whatever reason, restaurants that serve healthier food have not already freely chosen to operate in the area, and the number of fast food restaurants is not likely to be the thing that has kept them away.

Key Points

• After analyzing market conditions and local customer base, many restaurants have decided that it is in their best interest to operate in other areas of town.
• The only real incentive that the government has to attract new business to the area is tax breaks.
• Use of tax breaks to attract a business to an area that doesn’t have the customer base to support it is a recipe for failure. While lower taxes appear to increase profit margins, the increase is synthetic. Without revenues from a loyal customer base that can afford the products offered, there will be no need for tax breaks—there will be nothing to tax. Both the business and the government will be frustrated when the venture doesn’t work.
  Blocking other ‘less desirable’ establishments from opening is an abuse of the city’s power. If the market supports the fast food joints, they should have the freedom to operate as they please, where they please.
• If people really are looking for healthier choices, then the market will support the restaurants that offer those choices. Those businesses should compete based on their merits, rather than on government-given advantages.

Conclusion

Just like some of the left believe that they should keep the price of gas high because it will force people to quit ‘damaging the earth’, the L.A. City Council believes that they can force the people to be healthy by limiting the amount of fast food available to them. This is faulty logic. Dollars follow value. That means that people spend on the things that are important to them. “They should have better things for children,” said Rebeca Torres, a South Los Angeles mother of four. “This fast food really fattens them up.” If the price and convenience of unhealthy fast food has caused people to ignore healthier options (inside or outside of restaurants), then it is unlikely that any amount of government planning will lead them to patronize healthier, government-sponsored restaurants.

When the Nazi’s came to believe that there were problems with certain groups in their society, they began eliminating them. Their impossible goal was the social engineering of a perfect race. While the tactics being used by the City of L.A. are significantly less harsh, they are based in the exact same vein of thinking. With all that is going on in the world today, fast food does seem a low priority. But, the underlying attempt at social engineering is highly disturbing and should be a high priority to any freedom loving capitalist.

Action Items

1. Look at some of the ordinances passed by your city council. Do they generally tend to promote individual freedom or limit it?
2. Pick an ordinance that has been in place for a long time. Does the ordinance really make any difference in the city?
3. Make a list of ways that the community (citizens, not government) could persuade its citizens to effect the same changes without using force.
4. Take a deeper look at your personal relationships. When you want something to change in someone else, do you persuade or try to force?

MRFC Principles: (2, 4, 7, 8, 9, 11, 12)

Sources

Christina Hoag, LA blocks new fast-food outlets from poor areas, Associated Press, July 29, 2008.

(Matthew Pilling is a member of the FreeCapitalist movement known as the Canadian Capitalist. Despite his time in the Great White North, Matthew loves America and all that it stands for. He lives with his wife and two children in Taylorsville and works in finance.)

Desperate to Exchange

HIGHLAND, UT | 2 June 2008| In a market where no one is confident enough to exchange, people can get pretty creative. This can give rise to some very interesting opportunities for those whose eyes are open and who position themselves for such opportunities.

Two stories recently—one this weekend and another about a month ago—tell about merchants who are working to increase exchange. Hotels want people to come and stay, but because of the relatively high price of gas, fewer people are currently traveling. They are offering fuel credits to guests as an enticement. The other, a real estate development company in San Diego, is offering 2 for 1 houses. If a customer will buy an upper-end home, for which the development company is asking $1.6 million, the company will throw in a 2000 square foot city-scape home worth $400,000. A representative of the company is reported as explaining, “It’s our way of dealing with current market conditions to move some inventory.” This sentiment indicates an understanding, even if only subconscious, of several principles of prosperity.

Key Points

• People are assets. This development company recognizes that it has far too many properties in its inventory. They are all worthless unless people take possession of them and begin to exercise their agency over them.
• Human Life Value is the source and creator of all property value. Again, and very closely related to the statement above, these properties—all properties—have zero value. The development company, through its marketing campaign is searching for the level at which humans value the properties the company currently holds.
• The development company is also learning another very valuable lesson about Human Life Value. They, along with a myriad other developers in Southern California and all over the country, are discovering that people are beginning to value less the higher end homes. Certainly, the plight of the lenders is an influence but the people, in general, have ceased to value these homes as well. This does not bode well for the developers in the near future. But as they continue to search for the perceived value of the potential buyers, they will eventually effect an exchange.
• Exchange creates wealth. This is probably one of the most well-understood of the 13 principles. If two people do not strike hands and make a deal, the perceived value creation does not exist. It is merely an illusion.
• Faith begins with self-interest. Market conditions that go sour breed fear which destroys faith. The developers are currently seeking for the self-interest of individuals in the marketplace. When they find that individuals will begin to act again.

Conclusion

Market slow downs are often difficult to deal with, whether an individual is a producer or a consumer. The idea, however is to help create certainty in the marketplace. Those most able to help others realize that certainty stand to prosper well during these questionable times.

Action Items

1. If you have fear regarding the current market, recognize that fear and strive to replace it with faith. This may not be an easy task. The best way to alleviate fear is to act. Identify where you see certainty and act upon it.
2. maintain an open mind to new ideas.
3. Encourage those within your personal sphere of influence to also maintain such a mental state.
4. Begin today to create certainty in your market by learning the motivations of those you wish to exchange with and then create value in those areas.

MRFC Principles: 8 (2, 5, 6, 8 )

Sources

Peter Viles, “In Escondido: Buy one (house), get one free”Los Angeles Times/Blogs, June 1, 2008.

Steve Hargreaves, “Hotels offer gas rebates amid record prices,”CNNMoney.com, April 21, 2008.

The Moral Confusion of Wal-Mart Haters

MAPLETON, UT | 16 May 2008 | It’s not that uncommon for people to resent big business – and the degree of their resentment is usually in proportion to the size and success of the object of their hate. In response to an article on the Huffington Post, I would like to examine the claims of one particular writer, who is not alone in his delusion – such is the tone of criticism heard in many venues against the successful businessman. This writer’s wrath was kindled as he observed efforts to entice people to spend their “economic stimulus tax rebates” at Wal-Mart. In explaining why he thinks such action won’t truly stimulate the economy, he reveals a deeper misunderstanding of moral economics:

With its low price focus, Wal-Mart may appear to help the U.S. economy. But, the reality is that with its poor wages and benefits, massive China sourcing and tax avoidance, Wal-Mart makes its workers and the communities where it operates poorer.

How is it possible for a company that hands out millions of paychecks every year to be “making its workers and the communities where it operates poorer”? No matter how small the paycheck and benefits are, can you actually become poorer by getting paid? Would even a 10-cent paycheck not make you 10 cents richer than you were before? If you could magically wave your hand and make the Wal-Mart disappear from your neighborhood, would people suddenly start becoming wealthier? Maybe the writer believes that unemployment benefits and other government programs are the key to wealth.

Think about what even a small raise for Wal-Mart’s 1 million+ workers would mean nationally, or what it would mean to your city or town if everyone at your local Wal-Mart got a raise.

What a great idea! Here, the writer, from the perspective of someone outside the relationship between Wal-Mart and its workers, proposes changing the terms of employment for the good of the community. He doesn’t bother to ask how to accomplish it, nor does he consider any consequences other than the presumed benefit to the people as a whole. In this mentality, it is assumed that the costs of such an idea will simply be borne by the wealthy, who have enough already and can afford to give more to everyone else. Presuming a beneficial outcome for “the people” is supposedly justification enough. Readers of Atlas Shrugged will immediately recognize this philosophy, and the consequences of imposing it on the producers of value by force.

As our nation’s largest employer and most financially-successful company, Wal-Mart is a singular American institution. It occupies a unique position in our world by virtue of its size, reach and responsibility for the livelihoods of millions of workers and the needs of billions of consumers. And with such overwhelming influence comes certain moral responsibilities. It is the acceptance or rejection of those responsibilities that determines greatness.

There is both praise and damnation in this statement, acknowledging Wal-Mart’s success while simultaneously using that status as tool of condemnation. These words embody the very morality of the modern socialist mentality. It is a sentiment that views profit as guilt, a burden to be relieved by giving it to others. It is the claim that the degree of one’s success is the degree of one’s indebtedness to others – that it is an indication not of the value one has created, but of a debt owed to society by virtue of its ability to do so. Here, greatness is measured by obedience to “certain moral responsibilities”, which are unnamed, undefinable, and subject to no standard other than the self-loathing of the moocher. No recognition is made of the effort required to succeed, only demands made of the fruits of those efforts – as if such fruits were simply a matter of luck and required better allocation.

Ironically, if a person were to win the lottery, few would claim that the prize should be redistributed to all those who weren’t lucky enough to win (despite the fact that those winnings were created from the pockets of all those who participated freely). But when the prize is earned through value creation and free exchange (from the pockets of the customers of Wal-Mart), many call for the profits to be more “fairly spread”. Such a mentality rewards gambling and penalizes effort, and breeds the idea that the lottery is a fair game where no one wins at the expense of others, while mercantile exchange is a dirty business.

Wal-Mart has rejected those responsibilities and because of that choice, the money spent there does nothing of what it could to strengthen our economy. Higher salaries, quality affordable healthcare and paying what they owe like any good American, are just three things Wal-Mart can do tomorrow that will make them a company worthy of our money.

By ignoring the debate about whether government handouts (taken from the taxpayers or from the printing presses) are even capable of “strengthening our economy”, and proclaiming the presumed evils of Wal-Mart, this writer has successfully avoided any meaningful discourse on how to effectively stimulate any economy. In the process, he has revealed his true agenda: to discourage people from shopping at Wal-Mart due to their failure to adhere to the moral standards of the moochers and looters.

Conclusion:

At the core of this argument is the presumption that if everyone who worked for and shopped at Wal-Mart knew (as the writer claims) the “hidden costs” of doing business with Wal-Mart, they would cease to do so on moral grounds. The fact that millions of people choose freely to accept wages and purchase goods from Wal-Mart is the greatest evidence of the morality of its business, and a far greater indicator than the complaints of this writer. As is usually the case in the socialist mindset, the writer presumes to know better than millions of free individuals how best to use their resources (even their own labor) – and given the power (of government), would likely use force against the villain he condemns, claiming to do so “for the good of the people”. And like every other well-meaning tyrant in history, would ignore the evidence and the freedom of the actions of “the people” for their own sakes.

If Wal-Mart – or any company – is not in the business of creating value for its employees and its customers, it will not be in business very long. Thus Wal-Mart’s success is evidence of the value it has created (Principle 6: Profit is the Tool of Validation). As long as its business does not rely on force or deception in its transactions, whether for wage labor or for cheap laundry soap, there can be no greater statement of the value it provides to each individual and thus, to our economy as a whole, than this confession by the writer:

“…our nation’s largest employer and most financially-successful company”

Action Steps:

• Examine your relationship with the people and companies you do business with – are your dealings with them voluntary, and free of force or deception?
• Write a letter to the editor in your local newspaper in support of those businesses (big or small) that are successful as a result of the value they create for you.
• Research what laws are being proposed in your community (from the city council to the state legislature) that seek to control prices, wages, or other terms of free exchange. Contact your representative and express your opinion.

MRFC Principles: 6 (5,7,8,9)

References:

Why Wal-Mart Does Not Strengthen Our Economy – by David Nassar
http://www.huffingtonpost.com/david-nassar/why-wal-mart-does-not-str_b_99463.html

Senate Seeks Control of Internet

HIGHLAND, UT | 23 APRIL 2008 | In 1964, Ayn Rand wrote about the chaos that was previously the radio industry. She explained that capitalism was the perceived blame for this chaos but countered that the lack of ownership of the airwaves, rather than a rational system of ownership of them, was the actual blame. Forty years later, the nation is still grappling with this chaos, and it wishes to bring radios younger brother into the fray: the Internet. John Dunbar of the Associated Press (AP) reported Tuesday that the Senate, specifically Olympia Snowe (R-Maine) and Bryon Dorgan (D-N.D.) introduced legislation that would force Internet Service Providers (ISPs) to assume a policy of “network neutrality.” Currently, ISPs admittedly prioritize data packages, sending what they believe is more important ahead of lesser important ones. This, to some, seems unfair, and Dunbar reports that this debate has lately heated up. Adequately understanding the government’s proper role would aid greatly in this matter—the issue is not about fairness; it is about property rights.

Key Points

• Rand teaches, “Any material element or resource which…requires the application of human knowledge and effort, should be private property—by the right of those who apply the knowledge and effort.” In other words, the person who put forth this Human Life Value should be the rightful owner of his efforts.
• The Internet exists in name only, for it is merely a system of wires, hardware, and software, no matter how high tech; all assembled by individuals and therefore individually owned, operated and maintained. The government neither owns nor controls these devices collectively.
• There are many levels of ownership involved with the Internet. For example, those who own the servers, routers, cables, etc; and those who own the intellectual property stored and transmitted on these devices.
• An individual user owns the data he created, an email for example. He is simply renting the rest. He therefore has no more right to those devices than a driver on the road has a right to owning the guardrail or the lines painted on the street.
• Though acting more like a pipeline than hauling buckets, the transmission of data through this web of communication is only facilitated by the work of human hands.
• Ayn Rand explained, “It is the proper task of the government to protect individual rights and, as part of it, to formulate the laws by which these rights are to be implemented and adjudicated. It is the government’s responsibility to define the application of individual rights to a given sphere of activity—to define (i.e., identify), not to create, invent, donate, or expropriate.” In other words, if the dispute over ISPs discriminating between pieces of data does come to government’s doors, government should ask one question: “Whose property is this?” When the owner is sufficiently found, government should then say, “Great. All the rest of you, do what the owner says.”
• However, there is a great sickness in our land. It is the sickness of collectivism. Too many people believe in the mantra what’s yours is mine. Dunbar reported beautifully on this when he quoted Justine Bateman, the TV actress, “The idea of your site succeeding or failing based upon whether or not you paid the telecom companies enough to carry your amterial or allow quick access is appalling.” A closer look at this statement reveals an entitlement attitude regarding activity on the Internet, and a lack of understanding of how the web works.
• A great way to sort this out is to return to the first statement: “Any material element or resource which…requires the application of human knowledge and effort, should be private property—by the right of those who apply the knowledge and effort.” With this it becomes understandable that individuals own the Internet and it is their agency and stewardship to manage data traffic the way they see best. If customers are dissatisfied, they have the right to seek out a more satisfying Provider and become their customer. If data traffic is handled inefficiently, the market will decide who stays in business, and who finds a different line of work. This is as it should be.

Conclusion

Just as radio revolutionized the way we communicate, the Internet has revolutionized that revolution, making the availability of information almost instantaneous around the world. It has revolutionized the way we communicate, how we do business, how we store information, how we pass time. Properly understanding the hard lines of property ownership will aid each one of us in acting appropriately in this matter. The government’s role is not to demand fairness, as seen in the eyes of those who would rob others of their hard work, but rather to insure that the lines defining ownership are clearly drawn and that those who would cross those lines are duly dealt with. Anything else is an abuse of power.

Action Items

1. Review Ayn Rand’s “The Property Status of Airwaves” (p. 122–129 of Capitalism: The Unknown Ideal). Decide how her message applies to the question of Internet use and government restrictions.
2. In questions of “Is it good to do _____” (i.e., Is it good to demand that ISPs treat each bit of data equally?), start asking, “Whose property is ______?” Then act accordingly.
3. Evaluate your own life. Identify areas where you may have misunderstood the principle of property rights. Resolve to change your perspective regarding property rights.

MRFC Principles: 13 (11, 12, 13)

Resources

John Dunbar, “Senators Debate Future of Web” AP, Yahoo! News, April 22, 2008.

Ayn Rand, “The Property Status of Airwaves,” Capitalism: The Unknown Ideal, Signet, 1967. pp. 122–129.

Can the Kibbutz survive without Capitalism?

MAPLETON, UT | 17 April 2008 | In the kibbutzim of Israel, as in communal societies around the world, an entire generation attempted to live by the ideology of collectivism. Years later, all such social experiments have ended with one choice: adopt capitalist principles or cease to exist. The consequences of collectivism have resulted in two critical failures – economic bankruptcy, with communities unable to sustain themselves, and moral bankruptcy, with new generations rebelling against the oppression of communal sacrifice for parasitic consumption. The result has been deserted colonies, lacking resources, and devoid of the renewal of youth who abandoned them for the promise of individual freedom abroad.

Readers of Atlas Shrugged by Ayn Rand will remember the account of the 20th Century Motor Company, whose heirs decided to turn the company and its employees into a communal “family”. Rand describes a Marxist society that few today would consider plausible – yet the socialist kibbutzim are the literal ideological descendants of the axiom, “From each according to his ability, to each according to his needs.” To learn the economic history and hear the personal tales from the kibbutzim is to witness Rand’s fictional community come to life (with the exception that many modern kibbutzim have chosen reform).

Kibbutz Yasur, founded in 1949, serves as an example. Though it began with high ideals, textile and toy factories, they were unprofitable, and soon closed, leaving many without a means to provide for their future. Homes eventually sat empty, as children left town and no new members joined the community. Today, those homes are nearly filled, and old farmland is being sold for new real estate development.

“The new kibbutz is not perfect, but economically things are improving,” said Mr. Kilon, who manages Yasur and another kibbutz nearby (many kibbutzim are now run by professional managers rather than by popular vote). “The incentive to work has gone up, and after changes in the management, we are standing on our feet.”

Boaz Varol was born on a kibbutz in the far north, but he left at 18. “My parents worked all their lives, carrying at least 10 parasites on their backs,” he said. “If they’d worked that hard in the city for as many years, I’d have had quite an inheritance coming to me by now.”

Key Points:

• In the year 2000, more than half of Israel’s 257 collective farms were bankrupt.
  In the past, kibbutz members were rewarded equally, whether they milked cows or managed a large industry.
• On the new kibbutz, members earn salaries or receive end-of-month allowances reflecting the income they bring in.
• About half the kibbutzim have moved into real estate, selling plots for luxury neighborhoods in place of the fields and orchards outside their gates.
• House buyers generally do not join the kibbutz, but pay for services like child care.
  While the major assets of the kibbutzim are still collectively owned, the communities are now largely run by professional managers rather than by popular vote.

Conclusion:

What has emerged in the social consciousness of the kibbutzim is a newfound appreciation for the principles of prosperity – if not a total embrace. After decades of reaping the starving harvest of collectivism, the kibbutzim, in an attempt at self-preservation, have re-introduced the concepts of private property and wages based on productivity. The results have spoken for themselves.

The kibbutzim have traded pure socialist collectivism not for capitalism, but for a modern mixed economy, where individuals are free to work for themselves, generating private profits that are then taxed in order to fund communal socialist programs. Many assets are still owned communally, though housing is often owned privately. Such a policy is usually termed “privatization”, though leaders prefer to call it “renewal”. Allowing people to own property, produce value and be compensated for it has resulted in a surge in productivity and profit among the kibbutz members. Finally, the prosperity promised by marxist illusions is beginning to appear where free exchange is honored.

Such a society, however, is still not a free society, but a parasitic one. The socialist strategy over the past century has evolved pragmatically from one of total collective control (which, as the kibbutzim demonstrate, has always resulted in economic failure) to a parasitic co-existence with the private producers of value. Such an arrangement has allowed the socialists to remain on life-support, sustaining their moral bankruptcy as long as they allow just enough freedom for their capitalist hosts to produce the profits they are unable to produce for themselves.

The modern residents of the Kibbutzim are enjoying some of the benefits of capitalism, and their prosperity has attracted the attention of outsiders, resulting in increased demand and waiting lists for membership. While the changes have increased incentives to work and reduced the parasitic tendencies of the past, it remains to be seen whether the people will fully embrace the ideology at the core of their newfound prosperity. Their future depends on it.

Action Steps:

1. Read Atlas Shrugged – specifically the account of the train tramp who revealed to Dagny the story of the 20th Century Motor Company after its founder had died.
2. Examine your role in your community – what determines your individual prosperity? What determines your community’s prosperity?
3. What can you do to associate with others and develop local communities based on the principles of capitalism and freedom?

MRFC Principles: (2,3,5,6,7,8,10,11,12,13)

References:

The Kibbutz Sheds Socialism and Gains Popularity
http://www.nytimes.com/2007/08/27/world/middleeast/27kibbutz.html?_r=1&pagewanted=all

Is It Immoral to Use Food Crops for Fuel?

ALPINE, UT |31 March 2008| The recent surge in production of bio-fuels (fuel derived from food crops such as corn, soy, and sugarcane) both in the U.S. and around the world has sparked a debate about whether such production should be promoted or even permitted. Aside from arguments about the energy efficiency of bio-fuels, the latest criticisms have arisen from the recent rise in prices of staple foods, such as the corn used to make tortillas in Mexico. Far away from the corn fields in Iowa, yet linked by the global economy, some have expressed anger over the rapid increase in cost of a commodity they purchase daily for their sustenance. In many third-world countries, citizens have been shielded from the full effects of these cost increases through government price controls and subsidies – but these programs are straining to maintain the illusion of cheap food in the midst of a worldwide jump in food prices. Ironically, in many industrialized nations, governments have been pressured to use tax dollars to “stimulate” the production of bio-fuels through grants for bio-fuel factories, infrastructure, and subsidies for farmers – with the intent of reducing our dependence on petroleum fuels.

Key Points:

• Increased use of food crops for fuel production has reduced the amount sold for human consumption, resulting in price increases (supply & demand).
• Where bio-fuels have been more profitable than selling crops for food, some farmers have chosen to sell their crops to the fuel producers.
• Government price controls on food commodities have limited the profit possible to farmers, incentivizing them to seek other markets for their product.
• Government subsidies for bio-fuel production have distorted the economic value of food crops by creating an artificial demand (using tax dollars to stimulate production in the place of buyer dollars, which would demonstrate true demand).
• Acute shortages of subsidized bread, which is sold at less than one U.S. cent a loaf, have caused hours-long lines and violence at some sites in poor neighborhoods in Egypt in recent weeks.
• The supply of subsidized bread has been decreasing. Many people in Egypt believe subsidized bakeries sell some of their flour on the black market rather than make bread.
• Egypt has long been one of the top importers of U.S. wheat, but its U.S. purchases have been falling as it searches for cheaper sellers on the world market, where prices have tripled in the last 10 months.
• Some have criticized the use of food crops for fuel as “uncaring” and an example of “lopsided priorities”, due to the effect it has had on food prices, making it more difficult for poorer people to purchase basic foodstuffs.

Commentary

Not surprisingly, those who are suffering the consequences of government manipulation of the free market are the first to cry for the government to manipulate it further. This mentality believes that all costs are determined by the power of huge corporations, greedy middlemen, and government regulators – thus creating the illusion that the economy is simply a constant struggle between greedy businessmen and “the public” (represented by government protectors), waging price wars, with both sides continually seeking the upper hand. This illusion, during times of economic hardship, leads to the cry for government to be given greater powers to control commerce and trade, and to set “fair” prices.

What is not seen or heard in this debate is the fact that in a free exchange, the price of the product is decided mutually by the buyer and seller. Absent force, neither party can demand the other buy or sell the product – they must mutually agree. Thus, a general rise in the price of a commodity would indicate that someone is willing to pay more for it, and is doing so. Attempts to manipulate such an exchange through force will always result in its collapse, for the buyer will refuse to sell (reducing the amount of product available) and the seller will refuse to buy (creating a surplus in product available). These forces cannot be changed by government edict, and those who clamor for the force of government to be exercised to impose their opinions on what should be sold for what purpose and for how much will reap the consequences of history – shortages, recession, and general economic collapse.

In a real sense, what is being demanded by those who condemn the use of food crops for bio-fuel, is that each individual farmer should not be allowed to sell the fruits of his labor for the best price he can ask. He should be constrained to use his crops only for the benefit of those determined to be “in need” – by selling it only for food use and only at a price that is deemed “fair” by those who are demanding it from him. Such a policy can only be implemented through force, and has only one possible outcome. Eventually, the farmer will cease to produce when it is no longer profitable for him to do so under the coercive terms of the “public good” – and when that happens, there will be no food to buy at any price, no matter how great the need.

In the case of food crops and bio-fuels, both sides of the equation have been manipulated by tyrants – those who wish to control the direction of the fuel industry, and those who wish to mandate the value of a simple food product. Both distortions have aggravated what might have a been a simpler development in our modern economy. When men are free to exchange, temporary disruptions like those created by the invention of bio-fuels are quickly adjusted to, and self-interested people are quick to fill the needs and desires of others, for a profit. And that motivation, whether you revile it or not, is truly what fuels the economic activity of every person on the planet.

Action Steps

1. Read “Capitalism and Freedom” by Milton Friedman (available in the F.C. Primer).
2. Ask a local farmer what determines the sale price and use of the crops he produces.
3. Research the recent trends in the commodity markets – do you know the cost of the sources of your food?
4. Email your congressman and ask his/her opinion about the U.S. Farm Bill.
5. Read “The Law” by Frederic Bastiat – How does the concept of “legal plunder” apply to the issues of production, free exchange, government subsidies, price controls, and other economic manipulation?

MRFC Principles: (6, 7, 8, 9, 11)

Resources
Indian minister attacks biofuels
BBC – March 26, 2008
http://news.bbc.co.uk/2/hi/south_asia/7315308.stm

Egypt tries to tackle deadly bread crisis. CNN – March 4, 2008
http://www.cnn.com/2008/WORLD/africa/03/24/egypt.bread.riot.ap/index.html?eref=rss_world

Man Attempts to Sell Life on eBay

ALPINE, UT | 24 March 2008 | Sometimes life gets so bad you just want to push the reset button and start the game over. This is, in effect, what one Australian man is attempting to do by using his Human Life Value to auction all of his property and board the first available plane to anywhere. His five-year old marriage to “the best girl in the world” went awry and now he’s looking for a way out. This sale includes all his worldly possessions including clothing, home, toys, friends, other acquaintances, and his job. Hmm…I wonder if that also includes the remnants of the marriage?

Key Points:

• Ian Usher, 44, has put everything to do with his current life on the eBay auction block in a package deal.
• He is hoping to walk away with ?230,000.
• His employer said they would give the winning bidder a two-week trial at his job with permanent status if everything works out after that.
• The Telegraph reports Usher as saying, “I am looking forward to moving on, and shedding the past. I am excited about the future, and really having no idea where events might lead me. I love the adventurous nature of the project, and am excited about a new start…Everything here is connected with that past life, and as I cannot have that life any more, then I don’t want to hang on to it desperately.”
• His friends suggest it is just a mid-life crises.
• Usher has created a website to promote the sale of his “life.” www.alife4sale.com

Conclusion:

While surely everyone would like the opportunity, at times, to do as Mr. Usher is attempting, the nature of life suggests that the stewardships we engage in are not as simple as selling everything and somehow starting over. That will, indeed, get rid of the material possessions of one’s life, but it will do nothing for the memories and the relationships that person leaves behind. The stewardship of life suggests that we use our agency to learn to overcome our trials and to increase our knowledge, experience and abilities; in short, to increase our Human Life Value. Running from every trial in our lives may appear to solve the problems, but when life is over what will we be able to say about our stewardship called life? Still, perhaps one can admire the resolve of such an individual to just dump everything pertaining to the current life and disappear into another life, another identity, another stewardship, maybe even a life worth loving.

Action Steps:

1. In a journal or a notebook, spend one hour writing everything you are thankful for and love about your life. Don’t think about the negative things or the things you don’t love at this time, unless you are truly thankful for them.
2. Write about the challenges in your life and how they, specifically can be for your good. Record some of the possible lessons you might learn from those experiences.

Reference(s):

Date: Tuesday, March 18, 2008
Source: Telegraph, “Australian Auctions Entire Life on eBay”
Author: Lewis Carter
MRFC Principles: (3, 4, 6)

Gold at Record High: Government Secretly Confiscating Your Savings

ALPINE, UT | 17 March 2008 | There are certain economic concepts that most people are just oblivious to. Even worse, we have been trained, taught, and educated to let things we don’t understand about economics just float by our conscious minds with little critical thought at all. For example, I think most people have heard on the radio, watched on the television, or read in the paper reports that the “dollar” is not doing well (an intentional understatement). But I don’t think most people understand what this means for them directly. Specifically, if “dollars follow value” what I don’t think most people are aware of is Read more

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