Sunday, November 25, 2007

Reign over me (cont.)

I sent the following to the Raleigh News & Observer
In your editorial "No dynasty needed," you quote Warren Buffett as saying that "the resources of society I don't think should pass along in an aristocratic dynasty of wealth." This you use to help make your case for keeping the estate tax.

If we are truly concerned about "aristocratic dynasties," however, why not go after the more harmful dynasty of power? Let's amend the Constitution so that family members of former elected officials are prevented from taking their relatives' former seat - a growing phenomenon with regards to Congressional seats. It is possible, after all, that by the year 2017 the presidency will have been in control of two families for nearly 30 years. Why is that less troubling than someone handing down rightfully acquired wealth to his heirs?

We easily violate property rights to prevent so-called "dynasties." Why should we let eligibility requirements for political candidates stand in our way?

Thursday, November 22, 2007

Thanksgiving Whatever

Happy Thanksgiving!

Sunday, November 18, 2007

Reign over me

"The resources of society I don't think should pass along in terms of an aristocratic dynasty of wealth. I believe in keeping equality of opportunity as much as you can in this country."

Those were the words of renowned investment guru Warren Buffet when he spoke to the Senate Finance Committee recently. He was there to lobby the U.S. Congress to keep the Inheritance Tax which was set to expire in 2010 (it would actually only expire for that year and would return in 2011). It's somewhat sad that such leftist shibboleths are spoken by a man who seems to have the Midas Touch when it comes to investing.

Let's start from the beginning. "The resources of society..." No Mr. Buffet they are not society's resources they are yours. You created them with your hard work - they would not have existed otherwise. Why does "society" have a claim on them? Okay, maybe you can make the claim that if it wasn't for "society" you wouldn't have had the ability to acquire such wealth. But the reverse case could also be made: other members of society wouldn't be as rich or even have jobs if it weren't for men like you.

"... I don't think should pass along in terms of an aristocratic dynasty of wealth." I applaud the healthy suspicion of aristocracy, but let's not forget the other American tradition: respect for property rights. I would also argue that a "dynasty of wealth" is somewhat innocuous unless that wealth is allowed to wield the power of government. We can blame the owners of such wealth for influencing government power, but the onus must fall upon elected officials who allow themselves to be bought.

A note on terminology: Aristocratic dynasties are primarily governing institutions. If we really wanted to stop true "aristocratic dynasties" shouldn't we amend the constitution to prevent family members of former elected officials from running for office? (It is possible that by 2017 the U.S. Presidency would have been in the control of two families for almost 30 years. There is also a growing trend where children are replacing their parents in Congress.)

"I believe in keeping equality of opportunity as much as you can is this country." How is it that opportunity is taken away from anyone if you, Mr. Buffet, are able to leave your wealth to your heirs? I would argue that your wealth has created opportunity for countless numbers of people - whether it be with jobs that were created or investments that increased in value. Do you trust the political process with such wealth more than your heirs? You may want to think that your taxed wealth will go to better someone's life, but it could just as easily be said that that money will go to support more corruption and war. I would hope that you would look to clean up government before giving it more wealth to destroy.

Here's an idea: Why not continue your philanthropic ways by willing your estate to a cause (or causes) that would provide opportunity directly to individuals? Why should that wealth have to be pass through the unproductive sieve of a political bureaucracy?

Unfortunately, Mr. Buffet is part of a sad tradition of wealthy people who want to fund and lobby for the destruction of the very engine that made them wealthy. Maybe this book by Garet Garrett would be a valuable read.

Thursday, November 15, 2007


Some random whatever

Tuesday, November 13, 2007

Milton Friedman on "greed"

I love this YouTube video of Milton Friedman giving Phil Donahue a good smack-down. In contrast to Donahue's banal, simplistic arguments, Friedman teaches with reason and trenchant arguments while maintaining a sense of class.

Ants and order

Here's an article from Carl Zimmer talking about how insects create order by following very simple rules. What's interesting is that in the article Zimmer mentions that experiments were run with humans to mimic this order making phenomenon. I couldn't help but wonder why they had to run experiments with humans, because you could easily study human society to find similar spontaneous orders. Medieval law, language, the market process and other aspects of human culture can be traced to individuals following simple rules.

I will have more to say about this in future blog posts when I continue my live blogging of "Law, Legislation, and Liberty."

Saturday, November 10, 2007

Two minute answers

I've joined Toastmasters recently, and in this past week's session the table-topics master asked "how would you fix the problem of rising gas prices?" I regret not volunteering to answer because it would have been a good forum in which to educate people on the market process. So here is the answer I would have given.

My answer is that I don't know, and neither do you. No one in Washington knows and no environmentalist or oil company executive knows.

The answer, or more likely answers, will emerge from what Ludwig von Mises called the "daily repeated plebiscite" of the market process. Each of us contributes to this process by acting on our own bit of information. Consumers make decisions about what and how much to purchase, and producers and entrepreneurs decide on what and how much to produce. What governs this process is not some central authority with god-like powers; nor is it some committee of wise men with only the public good in mind. The governing mechanism of this "daily plebiscite" is the price system. Rising prices encourage consumers to cut back on purchases while at the same time encouraging producers to find new sources of supply. Innovative new products and technologies become more viable with higher prices.

Now I know this answer is somewhat simplistic because it ignores the international political issues going on in the world. It also assumes that the normative statement of rising gas prices being a problem is correct. But there was a two minute time limit!

Wednesday, November 07, 2007


Some random whatevers

Monday, November 05, 2007

Economics of health care

I've written many blog posts about health care and the problems with government-run systems, so I was excited to see that the latest episode of EconTalk with Russ Roberts was about the economics of health care. Take a listen.

BTW, if EconTalk is not one of your regular podcast subscriptions, you should make it so. Russ Roberts is a great host, and his topics are very thought provoking and interesting. If you have listened to EconTalk before then think about voting for it as the Best Podcast of the Year.

While I'm on the subject of the economics of health care, here are some interesting articles to peruse