Author: Frederic Bastiat
This set is incredible. Well, volume 1 is incredible. Volume 2 was slower for me, as it seemed to be more dry and covered a lot of the same material as volume 1. The set is a collection of most of the important writings of Frederic Bastiat, the great French classical liberal of the 19th century. There are five essays in the beginning, followed by two sets of "Economic Sophisms" in Volume 1. Volume 2 contains the "Harmonies of Political Economy." Bastiat's power of prose is unparalleled in this field. I doubt that anyone before or since can so clearly and persuasively explain problems of economics or politics so that they seem obvious to the average person.
Three of the first five essays, "That Which is Seen, and That Which is Not Seen", "The Law", and "Money", I would put as absolutely mandatory reading. In the first essay, Bastiat shows us how, in every economic situation, we must not only consider what is obvious and seen, but also what we can't see. He uses his famous example of the shopkeeper with a broken window. Everyone sees the broken window, as well as the work it provides for the window repairman. So "what is seen" is the advantage to the repairman. "What is not seen" is what would have happened if the window hadn't been broken: the shopkeeper would have used his money to buy a new pair of shoes, or a new suit of clothes, so that then he would have benefited the shoemaker or the tailor, and himself possessed the additional benefit of the new shoes or suit. This is a very important essay, and it is also what Henry Hazlitt based his "Economics in One Lesson" on.
"The Law" is the most important section of the book. Here Bastiat shows with inescapable force that anytime the law is used to organize anything other than justice, such as equality or prosperity, it necessarily and inescapably works against justice. This essay was one of the most powerful essays I have ever read.
The other essays in the book, as well as the series of Economic Sophisms and the Harmonies of Political Economy, address economic questions in a manner so simple and clear that you will never read the news in the same way again. I believe that anyone who reads this book will understand economics better than the entire Board of Governors of the Federal Reserve combined. Many sections of this book made me laugh out loud. For instance, he writes about people who worry that imports are too high. He says that if we want to maximize exports, and minimize imports, we should just take the biggest ship in our fleet, load it up with goods, send it fifty miles out to sea, and sink it to the bottom of the ocean. Exports are maximized, and imports are minimized. The story of the candle makers is even better.
There are two main points he emphasizes repeatedly through the book, which our betters in Washington have not learned yet. First, that every voluntary exchange benefits both parties, whether it's a simple exchange of goods, or whether it's capital lent at interest, or whether it's the employer and the laborer. Second, that there are always two perspectives: that of the producer, and that of the consumer. These perspectives correspond to abundance and scarcity. The producer always wants scarcity: he wants the few goods he produces to be very expensive and he wants less competition. The consumer always wants abundance: she wants lots of everything, and more competition, so that everything is cheap. People consume lots of things, but produce only one or a few things. Nevertheless, most of the laws we pass, in Bastiat's time as well as in ours, favor the producers at the expense of the consumers, and hence promote scarcity and high prices (think: "Unions").
This book is really indispensible, and should be perfectly accessible to a literate high school student. If you want to know whether to buy the whole set, find "The Law" online, print it out and read it, and I suspect you'll order the two volumes. You won't regret it.
THE BASTIAT COLLECTION: VOLUME 2
Author: Frederic Bastiat
THE NEW ROAD TO SERFDOM: A LETTER OF WARNING TO AMERICA
Author: Daniel Hannan
PERVERSE SUBSIDIES: HOW TAX DOLLARS CAN UNDERCUT THE ENVIRONMENT AND THE ECONOMY
Authors: Norman Myers and Jennifer Kent
Much of the global economy depends upon large-scale government intervention in the form of subsidies, both direct and indirect, to support specific industries or economic sectors. Distressingly, many of these subsidies can be characterized as "perverse"-rather than helping society achieve a desired goal, they work in the opposite direction, causing damage to both our economies and our environments. World-wide subsidies have long been thought to total $2 trillion per year, but until now, no attempt has been made to determine what proportion of that actually subverts the public interest. In Perverse Subsidies, leading environmental analyst Norman Myers takes a detailed look at the subject, offering a comprehensive view of subsidies world-wide with a particular focus on the extent, causes, and consequences of perverse subsidies. He defines many different kinds of subsidies, from tax incentives to government handouts, and considers their wide-ranging impacts, as he: - examines the role of subsidies in policymaking - quantifies the direct costs of perverse subsidies - examines the major subsidies in agriculture, energy, road transportation, water, fisheries, and forestry - considers the environmental effects of those subsidies - offers policy advice and specific recommendations for eliminating harmful subsidies The book provides a valuable framework for evaluation of perverse subsidies, and offers a dramatic illustration of the scale and dimensions of the problem. It will be the standard reference on those subsidies for government reform advocates, policy analysts, and environmentalists, as well as for scholars and students interested in the interactions between policymaking and environmental issues.
WHEN MONEY DIES
Author: Adam Fergusson
The Nightmare of Deficit Spending, Devaluation, and Hyperinflation in Weimar Germany
Here are some parallels with our time:
The Germany of the '20s finds it cannot meet the costs of war reparations. The US of the 2000s starts a war intending to pay reparations before it begins, and then finds itself unable to meet the mounting costs of war reparations it originally thought would leap out of the ground and just pay themselves. (Meanwhile, the US's wounded soldiers [& the families of its dead soldiers] are going to require entire lifetimes of domestic reparations).
The Germany of the '20s attempted to buy/finance prosperity with ballooning deficits. The US of the 2000s wants to buy/finance prosperity with ballooning deficits. Neither nation-State can be told it is wrong--and neither admits (or even recognizes) inflation is a hidden and pernicious tax.
Germany before the '20s had every confidence in the mark. The US in the 2000s believes the only currency in the world is the dollar, & the only thing money can be made of is paper and ink (never gold or silver). But as one mixes ink with paper, hoping the mixture will have exchange value, one finds that one has given value to neither material.
As Germany becomes more unhinged in the '20s, it moves towards a strong man as a moth to a flame. As the US grows more unhinged, it loses faith in its 'strong man' (even if he does not lose faith in himself). If the US should subsequently shun whoever wants to be the next 'strong man', there may yet be hope. Since it is possible for the next wannabe 'strong man' to be laughed off the stage, it is yet possible the US will not succumb. The jury is still out.
At times the mark strengthens (goes against the ultimate trend, for short periods): the Germans of the '20s (and other investors) think the crisis is over and it is time to buy. At times the dollar strengthens (goes against the ultimate trend [?], for short periods): the world of the 2000s thinks the crisis may end--isn't it now time to buy cheap US assets?
The Germans of the '20s can add more zeros to their paper--but paper production does not keep up with the 'demand' for money. The US of the 2000s has but to generate a computer entry and like magic, the 'demand' for money is met. The paper of Germany leaves a trail [Fergusson proves this]--computer entries can be a hidden and dirty little State Secret [until prices rise as the money actually depreciates, the state can suppress much of the evidence].
At many levels, this book about a frightening past speaks to a menacing present. Because of its price, many will not get to read that message. Between the Germany of the '20s and the US of the 2000s, there are differences too, but not differences that necessarily help. The potential for money supply to soar (the Fed's ability to create credit by computer without even having to buy ink, paper, and printers) has never been so boundless. We of the 2000s prefer to believe we are more intelligent than the Germans of the 20s. We live with the hope that our enlightened leaders [!] comprehend inflation & understand that deficit spending shall ruin us. Enlighted people that we are, from government top to government bottom; we know and rely upon our leaders' fiscal responsibility. Just look at how enlightenment runs through the Nation--budgetary constraints are placed upon our brilliant leader, by those guardians of the Public Purse & Trust, a US legislature that checks and balances all his raw power. In truthiness [that is, if one buys their spin], they all do their utmost to preserve & protect the currency, while shouldering their duties to preserve and protect our Constitution. Tonight, can I sleep contentedly, knowing both these National Treasures are safe and sound?
Read this book: it is still found in libraries. You will be witness to ink on paper that actually has and holds its value.
THE FEDERAL SUBSIDY BEAST
Author: Brian J. Finegan
The Rise of a Supreme Power in a Once Great Democracy
This book is the most complete book you will ever need to read about government waste. It exposes every aspect of government spending that you will be sick when you get done. It is actually almost too much to bear that you will have to put it down periodically because you will not be able to stand it anymore. I can't see how anyone in their right mind would ever even consider raising taxes after reading this book. It is actually kind of funny because the amount of money wasted is so insane that you will feel like laughing if you weren't crying because your hard earned money has gone down the drain.
THE MYTH OF THE ROBBER BARONS
Author: Burton W. Folsom, Jr.
Forward By: Forrest McDonald
A New Look at the Rise of Big Business in America
Burton Folsom's The Myth of the Robber Barons is a short, but excellent book that argues that the mislabeled "Robber Barons" of the 19th century became wealthy not because they robbed anyone but because they offered quality products/services at record low prices. These productive giants made their fortunes because so many Americans chose to do business with them.
There are several values to gain from this book. First, you will learn several inspiring stories about how great industrialists amassed their fortunes through ingenuity, extended dedication and taking great calculated risks. You will learn about how Cornelius Vanderbilt defeated the Fulton NY/NJ steamship-transport monopoly by offering lower rates, earning a reputation for his punctuality, investing in faster and larger ships and providing ancillary services such as concessions. You will also learn about how Andrew Carnegie was obsessed with cutting costs, which led to him profitably carting off tons of steel shavings discarded from a competing steel plant owned by the Scranton’s. Other business heroes covered in depth in this book are James J. Hill (who built the Great Northern Railroad without a penny of Federal aid), oil tycoon John D. Rockefeller, the Scranton steel family, Carnegie's right hand man Charles Schwab and Andrew Mellon, the Secretary of the Treasury whose laissez-faire policy recommendations allowed the 1920s to roar.
Another great value of this book is that it dispels a few common myths about capitalism. For one, Folsom correctly identifies that "Robber Barons" is an invalid concept. That is, "Robber Barons" includes market entrepreneurs (i.e., those who *created* their fortunes by revolutionizing an industry) with political entrepreneurs (i.e., those who made their fortunes through government aid or with political connections.) Examples of market entrepreneurs include Carnegie, Rockefeller, Hill, and Vanderbilt. Examples of political entrepreneurs include Henry Villard and Leland Stanford. Instead of subsuming all wealthy industrialists under a single category, Folsom suggests that we instead judge these industrialists based on *how* they made their fortunes.
A final great aspect of this book is that it offers a concise, essentialized history of what made these individuals great. Thus, an avid reader may absorb a healthy amount of introductory material without committing himself to reading an 800-paged biography.
SHAKEDOWN SOCIALISM: PROGRESS TO NOWHERE
Author: Oleg Atbashian: Who saw the Worst of Both Worlds and Lived to Tell the Tale
It failed in the USSR…Now it’s moved to the USA. Unions, Pitchforks, Collective Greed, the Fallacy of Economic Equality, and Other Optical Illusions of “Redistributive Justice”
Shakedown Socialism is a unique book in many ways. The book is a decisive refutation of the principles of socialism and "progressivism." The author, Oleg Atbashian, draws on his personal experiences growing up in the totalitarian economic system of the old Soviet Union to show why socialism not only has not worked, but cannot work.
Atbashian's own awakening from an inculcated acceptance of the superiority of communism to an embrace of the free market is the underlying story of the book. Growing up in the Ukraine, Atbashian gradually became aware of the hypocrisy of those who ran the command economy of the Soviet Union. While proclaiming the virtues of forced "economic equality" all of the Soviet officials, the "apparatchiks" who ran the country, instinctively sought every advantage they could not just for themselves, but for their children. Reflecting on this, Atbashian recognized the fatal flaw of socialism - Every parent will seek to secure the best for their children.
This epiphany eventually led Atbashian to emigrate from Russia to the United States. Here is how he describes his decision:
"Some years ago, I escaped from the shipwreck of the Soviet "worker's paradise" and moved to the United States, making a conscious choice between the forced inequality of socialism and the volunteer material inequality of capitalism. I didn't expect to be rich; I only wanted an opportunity to earn an honest income without sacrificing my dignity. I wanted the freedom to pursue my own choices and aspirations, not the ones prescribed by the state. I wanted to live in a country where my success or failure would depend on my own honest effort, not on the whim of a bureaucrat. I wanted my relations with people to be based on voluntary agreements, not mandatory requirements. And finally, I wanted my earnings to be protected by law from wanton expropriation."
"America deserves credit for living up to the ideas of liberty and fighting off the redistributionist utopia for as long as it has. As crippling as the hosting of two opposing economic systems can be, it still remains a free country. But the balance is rapidly changing. Like many immigrants seeking freedom and opportunity in America, I find this change not simply misguided but personally painful. And so do all freedom-loving people elsewhere in the unfree world, for whom the mere existence of this country still gives hope and validates their belief in liberty and individual rights."
Oleg is a brilliant (and funny) writer. I first encountered him while reading his satirical postings on [...]. When I read his observations on the fallacies of socialism, I knew I wanted to help get his work to a larger audience.
Some of the most powerful parts of the book are Oleg's own illustrations, and his selections of ironic photographs and cartoons. In what can only be described as providential irony, Oleg was trained as a graphic artist and had been employed by the Communist Party in a town in Siberia to produce propaganda posters. He uses those skills to great effect. There are 90+ photographs and cartoons scattered throughout the book which drive his points home. Many of them will make the reader smile, if not laugh out loud! The book cover is, naturally, designed by Oleg.
This is a relatively short book, and an easy read - but the ideas and analysis it contains are profound. In seven chapters and 134 pages, Oleg pops balloons, pokes fun, exposes hypocrisy, sounds a warning, and destroys the intellectual underpinnings of socialism.
Here's a sample passage from chapter 6:
"If some people had wings and others didn't, and the government wanted to enforce "fairness," soon no one would have wings. Because wings cannot be redistributed, they can only be broken. Likewise, a government edict cannot make people smarter or more capable, but it can impede the growth of those with the potential. Wouldn't it be fair if, in the name of equality, we scar the beautiful, cripple the athletes, lobotomize the scientists, blind the artists, and sever the hands of the musicians? Why not?"
I urge everyone who cares about freedom and free markets to read this book. Better yet, buy extra copies and give them to your friends.
THE TEA PARTY GOES TO WASHINGTON
Author: Rand Paul
The first half of The Tea Party Goes to Washington is very autobiographical and personal. Rand Paul reminisces about the primary, the general election, his childhood and his father's 2008 Presidential campaign. Paul comes across as a very warm, likable, everyday guy who genuinely cares about America. A refreshing contrast to the perception the media and his opponents tried to portray when he was running for Senate.
It's a sad fact that the term "tea party" has become so politically charged over the past couple years that it has lost much of it's original meaning. In The Tea Party Goes To Washington, Rand helps show us the human side of the tea party as he reminds us that the tea party is really just loosely organized groups of average Americans who are frustrated with excessive government spending, debt, overstretch, and politics as usual.
The second half of the book focuses more on issues and what it means to be a "Constitutional Conservative". Paul covers a wide variety of topics including constitutionally limited government, states' rights, the Patriot Act, and military spending.
There were some in the tea party movement who were afraid that Rand Paul would not be as principled as his father when he got to Washington. While Ron and Rand do disagree from time to time, I think this book proves that Rand has every intention of sticking to his campaign promises and fighting for what he believes in. He's not just "following in his daddy's footsteps", he is helping lead the charge for limited government and adherence to the Constitution.
A must read for all tea party members and those looking to better understand what the tea party is about.
ECOLOGY, LIBERTY & PROPERTY
Editor: Jonathan H. Adler
A Free Market Environmental Reader
Are free markets and environmental protection compatible? Is it possible to protect environmental resources without resorting to extensive command-and-control regulation? Ecology, Liberty & Property: A Free Market Environmental Reader answers a resounding yes. The market institutions of private property, voluntary exchange, common law liability standards, and the rule of law are powerful medicine for environmental ills. Greater reliance on these institutions can address environmental concerns while preserving individual liberty. The essays herein, drawn from over fifteen years of CEI’s environmental analysis and policy research, explain the free market approach to environmental concerns in both theory and practice. The topics covered range from solid waste and wildlife conservation to industrial pollution and biotechnology.
Author: Clifford Winston
Privatization and Deregulation of the U. S. Transportation System
"A half-century of economics research, much of it from Brookings, convincingly shows that deregulation of transportation services delivered enormous benefits. Last Exit argues persuasively that these benefits are limited by continuing public provision of infrastructure and regulation or public provision of some services. Clifford Winston proposes experiments in private provision of airports, highways, and urban passenger transportation, and more efficient usage pricing for infrastructure, to test the strong theoretical case for increasing the scope of privatization and deregulation. These provocative but measured proposals provide the agenda for a serious national debate on the next steps in reforming transportation policy." --Roger Noll, Stanford University
Edited By: Gabriel Roth
Forward By: Mary E. Peters
Competition, Entrepreneurship, and the Future of Roads
The poor health of today's roads--a subject close to the hearts of motorists, taxpayers, and government treasurers around the world--has resulted from faulty incentives that misdirect government decision-makers, according to the contributors to Street Smart. During the 1990s, bad government decision-making resulted in the U.S. Interstate Highway System growing by only one seventh the rate of traffic growth. The poor maintenance of existing roads is another concern. In cities around the world, highly political and wasteful government decision-making has led to excessive traffic congestion that has created long commutes, reduced safety, and caused loss of leisure time.
Street Smart examines the privatization of roads in theory and in practice. The authors see at least four possible roles for private companies, beyond the well-known one of working under contract to design, build, or maintain governmentally provided roads. These include testing and licensing vehicles and drivers; management of government-owned facilities; franchising; and outright private ownership. Two chapters describe the history of private roads in the United Kingdom and the United States. Contemporary examples are provided of road pricing, privatizing, and contracting out are evident in environs as diverse as Singapore, Southern California, and Scandinavia, and cities as different as Bergen, Norway, and London, England. Finally, several chapters examine strategies for implementing privatization.
The principles governing providing scarce resources in free societies are well known. We apply them to such necessities as energy, food, and water so why not to "road space"? The main obstacle to private, or semi-private, ownership of roads is likely to remain the reluctance of the political class to give up a lucrative source of power and influence. Those who want decisions about road services to be controlled by the interplay of consumers and suppliers, in free markets, rather than by politicians, will have to explain the need for change. Street Smart makes a powerful case for the need for change and sheds light on the complex issues involved.
Gabriel Roth is a transport and privatization consultant and a research fellow at the Independent Institute in Oakland, California.
THE PRIVATIZATION OF ROADS & HIGHWAYS