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Posts Tagged ‘Freedom’

In the pre-World War I era, the fiscal burden of government was very modest in North America and Western Europe.

Total government spending consumed only about 10 percent of economic output, historical-size-of-govtmost nations were free from the plague of the income tax, and the value-added tax hadn’t even been invented.

Today, by contrast, every major nation has an onerous income tax and the VAT is ubiquitous. These punitive tax systems exist largely because – on average -  the burden of government spending now consumes more than 40 percent of GDP.

To be blunt, fiscal policy has moved dramatically in the wrong direction over the past 100-plus years. And thanks to demographic change and poorly designed entitlement programs, things are going to get much worse according to BIS, OECD, and IMF projections.

Long-Run GDPWhile these numbers, both past and future, are a bit depressing, they also present a challenge to advocates of small government. If taxes and spending are bad for growth, why did the United States (and other nations in the Western world) enjoy considerable prosperity all through the 20th Century?

I sometimes get asked this question after speeches or panel discussions on fiscal policy. In some cases, the person making the inquiry is genuinely curious. In other cases, it’s a leftist asking a “gotcha” question.

I’ve generally had two responses.

1. The European fiscal crisis shows that the chickens have finally come home to roost. More specifically, the private economy can withstand a lot of bad policy, but there is a tipping point at which big government leads to massive societal damage.

2. Bad fiscal policy has been offset by good reforms in other areas. More specifically, I explain that there are five major policy factors that determine economic performance and I assert that bad developments in fiscal policy have been offset by improvements in trade policy, regulatory policy, monetary policy, and rule of law/property rights.

I think the first response is reasonably effective. It’s hard for statists to deny that big government has created a fiscal and economic nightmare in many European nations.

But I’ve never been satisfied with the second response because I haven’t had the necessary data to prove my assertion.

However, thanks to Professor Leandro Prados de la Escosura in Madrid, that’s no longer the case. He’s put together some fascinating data measuring economic freedom in North America and Western Europe from 1850-present. And since he doesn’t include fiscal policy, we can see the degree to which there have been improvements in other areas that might offset the rising burden of taxes and spending.

Here’s one of his charts, which shows the growth of economic freedom over time. For obvious reasons, he doesn’t include the periods surrounding World War I and World War II, but those gaps don’t make much of a difference. You can clearly see that non-fiscal economic freedom has improved significantly over the past 150-plus years.

Economic Freedom 1850-2007

Most of the improvement took place in two stages, before 1910 and after 1980.

It’s also worth noting that things got much worse during the 1930s, so it appears the developed world suffered from the same bad policies that Hoover and FDR were imposing in the United States.

Indeed, here’s another chart, which highlights various periods and shows which policies were moving in the right direction or wrong direction.

Economic Freedom Changes 1850-2007

As you can see, the West enjoyed the biggest improvements between 1850-1880 and after 1980 (let’s give thanks to Reagan and Thatcher).

There also were modest improvements in 1880-1910 and 1950-1960. But there was a big drop in freedom between the World War I and World War II, and you can also see policy stagnation in the 1960s and 1970s.

By the way, I wonder what we would see if we had data from 2007-2014. Based on the statist policies of Bush and Obama, as well as bad policy in other major nations such as France and Japan, it’s quite likely that the line would be heading in the wrong direction.

But I’m digressing. Let’s get back to the main topic.

The moral of the story is that we’ve been lucky. Bad fiscal policy has been offset by better policy in other areas. We’re suffering from bigger government, but at least we’ve moved in the direction of free markets.

That being said, we may now be in an era when bad fiscal policy augments bad policy in other areas.

For further information, this video explains the components of economic success.

P.S. I’ve written before that government bureaucrats don’t work as hard as folks employed in the economy’s productive sector.

Well, that’s becoming official policy in some parts of Sweden.

A section of employees of the municipality of Gothenburg will now work an hour less a day… The measure is being self-consciously conceived of as an experiment, with a group of municipal employees working fewer hours and a control group working regular hours – all on the same pay. …Mats Pilhem, the city’s Left-wing deputy mayor, told The Local Sweden that he hoped “staff members would take fewer sick days and feel better mentally and physically after working shorter days”.

Heck, if you want fewer sick days, just tell them they never have to show up for work. And I’m sure they’ll “feel better mentally and physically” with that schedule.

I’m also amused by this passage from the article.

Anna Coote, Head of Social Policy at the New Economics Foundation, a UK-based think tank, welcomed the proposals. “Shorter working hours create a more committed and stable workforce,” Ms Coote told The Telegraph.

Gee, what a surprise. If you overpay a group of people and tell them they can spend more time at home, they’ll be very anxious to keep those jobs.

Sounds like a great deal…unless you’re a taxpayer.

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I have some bad news and some good news.

The bad news is that politicians have come up with another proposal for an additional tax.

Some people like prohibition

Some people like prohibition

The good news is that they can only impose this new tax if they ease up on the silly Drug War.

That creates a bit of a quandary if you believe in freedom and small government.

But, on net, it’s a move in the right direction.

We have two examples to share. The first is from South America, where the government of Uruguay seems poised to legalize marijuana. Here are some blurbs from an AP report.

Uruguay is pushing ahead to create a legal marijuana market… The Senate planned to debate the pot plan Tuesday, with approval by the ruling coalition widely expected before the night is over. Because senators turned away all requests for amendments after it passed the lower chamber, their vote will be final.

One reason for this proposed reform is to fight organized crime.

President Jose Mujica says the point is not to promote marijuana use, but to push out organized crime. The government hopes that when licensed growers, providers and users can openly trade in the drug, illegal traffickers will be denied their profits and go away.

Let’s give President Mujica an A+ for economics. He recognizes that criminalization creates a black market.

But Uruguay politicians are not exactly dreamy-headed libertarians. Big government would be involved.

Socialist Deputy Julio Bango, who co-authored the proposal, told The Associated Press that “this is not a law to liberalize marijuana consumption, but rather to regulate it. Today there is a market dominated by drug traffickers. We want the state to dominate it.”

And the article also mentions that legalization would be accompanied by heavy taxes. I don’t like that part, but there’s no question this would be a net plus for liberty and crime reduction.

Some lawmakers in New York also seem to understand that prohibition is illogical. Here are some excerpts from a local news report.

State Sen. Liz Krueger’s measure — the Marijuana Regulation and Taxation Act — would legalize, regulate and tax marijuana under state law. “It will take the market in marijuana away from the criminal enterprises, just as happened when alcohol prohibition was ended,” she said at a City Hall press conference.

Kudos to Krueger for her grasp of incentives. The Drug War is just as foolish – and just as good for criminals – as prohibition.

Though I wonder whether Sen. Krueger is being too greedy.

“It would establish an excise tax of $50 an ounce of marijuana and authorize localities to charge a sales tax on retail sales if they wish to,” Krueger said. …Liu estimates that a pot tax would generate $431 million in New York City alone.

I’ve never done drugs, so I’m not familiar with the market, but I do know that if the tax is too high on a legal product, you create a black market.

That happens with cigarettes, for instance, and we examples of excessive taxation causing less revenue from Bulgaria, Romania, and Ireland. And we’ve even seen this Laffer Curve effect in Washington, DC.

Last but not least, we should never forget that the Drug War is a horrifying example of Mitchell’s Law, with one bad policy leading to another bad policy.

The War on Drugs, for example, is the reason why politicians imposed costly and ineffective anti-money laundering laws. As well as disgusting and reprehensible asset forfeiture laws.

P.S. Libertarians are not the only ones to think the drug war is foolish. Yes, you find libertarians such as John Stossel and Gary Johnson on the list of those who want to end prohibition. But you also find John McCainMona Charen, Pat Robertson, Cory Booker, and Richard Branson.

But maybe you disagree with all those people and would rather be on the same side as Hillary Clinton.

P.P.S. This is not an issue of whether you approve of pot use. You can be strongly against drugs, like me, but also realize that it makes no sense for government to get involved. Particularly since criminals are the ones who benefit.

P.P.P.S. The Drug War gives the government immense powers to engage in bad policy.

Or sometimes the Drug War merely exposes government stupidity.

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I’m a very straight-laced guy. Some would even say boring. I’ve never done drugs, for instance.

But not because they’re illegal. I’ve never done drugs for the reason that I’ve never smoked cigarettes. Just doesn’t seem like a smart thing to do. And I encourage friends and family to have the same approach.

That being said, I’ve never thought we should criminalize things simply because I don’t like them.

Particularly when it would make a lot more sense to focus law enforcement resources on stopping crimes against people and property. This new video from Learn Liberty explains further.

But this isn’t about cost-benefit analysis. Watch this powerful video from Reason TV about how one family has been victimized by drug prohibition.

Now ask yourself what purpose it served to have local cops basically entrap that unfortunate kid? If you come up with an answer, you have a very creative imagination.

Also keep in mind that the War on Drugs is the reason why politicians imposed costly and ineffective anti-money laundering laws. As well as disgusting and reprehensible asset forfeiture laws.

One misguided government policy leading to two other bad policies. That’s Mitchell’s Law on steroids!

P.S. Drugs do impose costs, but they’re mostly incurred by moronic users. Though there sometimes are collateral victims, such as kids whose parents allow their lives to get messed up. That’s why it would be nice if drugs somehow didn’t exist. Heck, the same things could be said about booze. Or tobacco. But they do exist. The libertarian position isn’t that these things are good. Instead, our position is that prohibition does more harm than good.

P.P.S. Just in case you think I’m an outlier, I invite you to read the thoughts of John McCain, John Stossel, Mona Charen, Gary Johnson, Pat Robertson, Cory Booker, and Richard Branson.

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What do John Stossel, Mona Charen, Gary Johnson, Pat Robertson, Cory Booker, and Richard Branson all have in common?

And let’s add voters from the states of Colorado and Washington to this list. So what unites this unusual collection of people?

They’ve all expressed doubts about the War on Drugs. And that’s a good thing.

As explained in this video, the Drug War has been a very costly failure. Indeed, it’s been such a boondoggle that we can now add John McCain to the list of those who think maybe it’s time to consider decriminalization.

McCain Drug WarSen. John McCain (R-AZ) signaled Thursday that he’s receptive to legalizing pot. Tim Steller, a columnist for the Arizona Daily Star, reported over Twitter from a town hall in Tucson, Ariz. that McCain cited the “will of the people” in expressing an openness to legalization.

I’m glad Senator McCain is moving in the right direction, though I’m not sure I like his reasoning. The “will of the people” sometimes means two wolves and a sheep voting on what to have for lunch.

I much prefer the logical arguments of my Cato colleague Jeffrey Miron, who is a Senior Lecturer in economics at Harvard. Here’s some of what he recently wrote for the Huffington Post.

I have come to regard legalization as a policy no-brainer. Virtually all the effects would be positive, with minimal risks of significant negatives. An important piece of that research has been examination of drug policy in the Netherlands, where marijuana is virtually, although not quite technically, legal.

Jeff just visited Amsterdam and here’s what he found in that supposed den of iniquity.

Legalization advocates point to Amsterdam as evidence that legalization works, at least for marijuana. Legalization critics, such as former White House Drug Czar Gil Kerlikowske, believe instead that Dutch policy is flawed, generating crime and nuisance effects. Only first-hand observation could give me a clear view of which description is more accurate. …the Red Light District could not have felt safer or more normal. Yes, marijuana was widely available. …But nothing about the District felt unsafe, or suggested elevated crime or violence; I have felt less safe in many American and European cities. …The absence of violence is not surprising. Prohibition, not drug use, is the main reason for the association between violence and drugs, prostitution, gambling, or any banned good. In a legal market, participants resolve disputes with lawyers, courts, and arbitration. In an illegal market, they cannot use these methods and resort to violence instead. Thus the critical determinant of violence is whether an industry is legal, as the history of alcohol prohibition illustrates. That industry was violent during the 1920-1933 period, when the federal and many state governments banned alcohol, but not before or after. And if the government banned tobacco, or coffee, or ice cream, or any good with substantial demand and imperfect substitutes, a violent black market would arise.

There’s no evidence, by the way, that legalization means more drug use.

In 2009, the past year marijuana use rate was 11.3 percent in the United States but only 7.0 percent in the Netherlands. This does not prove that legalization lowers drug use; many other factors are at play. But these data hardly support the claim that prohibition has a material impact in reducing use. When we were toured Amsterdam on a canal barge, the guide commented that, “Despite legal drugs and prostitution, Amsterdam is a safe city.” My son, who has heard me rant about prohibition for years, looked up and quipped, “He should have said “Because drugs and prostitution are legal, right?” Exactly.

Sounds like Jeff’s done a good job as a father (and if I’m allowed to brag, I haven’t done a bad job either).

In closing, let me emphasize that libertarian does not mean libertine. My Republican friends are wrong when they think libertarians are like the guy in the upper left of this poster.

You can support legalization without being a drug user or without thinking that it’s a good idea for other people to smoke pot. Heck, I’m probably one of a small minority of people in my generation to never try any drug.

But that doesn’t mean I want to squander lots of tax money and reduce human freedom to persecute others who are engaged in victimless activities. Especially when it means a massive increase in the power of government!

Let’s not forget, after all, that politicians used the Drug War as an excuse to enact reprehensible and costly laws on asset forfeiture and money laundering. One foolish policy leads to a couple of other misguided policies. That’s Mitchell’s Law on steroids!

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Whether they’re banning bake sales, federalizing school lunch menus, or criminalizing Big Gulps, the nanny-staters feel they have some special wisdom that gives them the right to tell other people how to live their lives.

This irks libertarians since we value human liberty, even if it means people sometimes make foolish choices. But so long as you’re not interfering with someone else’s rights, we don’t think government should dictate your private behavior.

Parternalists obviously disagree. For a very reasonable explanation of this mindset, here’s some of Cass Sunstein’s work, as excerpted by The New Republic.

What seems to unify paternalistic approaches, however diverse, is that government does not believe that people’s choices will promote their welfare, and it is taking steps to influence or alter people’s choices for their own good.

In other words, people are sometimes dumb and the government at the very least needs to nudge them in the right direction.

Sunstein outlines the objections to this approach, largely focusing on the fact that the market process will discourage bad behaviors.

To the committed antipaternalist, government should not short-circuit the valuable process of learning by doing. If people make mistakes about diets, drinks, love, or investments, they can obtain valuable lessons, and those lessons can make their lives a lot better. …In a market economy, companies compete with one another, and people are free to choose among a wide range of options. If a car has terrible fuel economy, and if it costs a lot of money to operate, fewer people will buy it. As a result, companies will produce more fuel-efficient cars. Some consumers may be fooled or tricked, but in the long run, free competition and open markets will help. On this view, paternalism presents a major risk, because it may freeze the process of competition.

Not surprisingly, Sunstein argues that the market process is sometimes inadequate.

…even if we are inclined to think that individuals are generally the best judges of how to make their own lives go well, the word generally is important. With that qualification, we can see that the objections to paternalism depend on some empirical judgments. …The relationship between freedom of choice and welfare is being tested, with complex results. Sometimes people’s means do not promote their own ends. Behavioral economists have identified a number of reasons that people’s choices do not always promote their welfare. …sometimes we fail to take steps that really are in our interest. Human beings often procrastinate, and the long-term may not be so salient to us. We can be tempted by emotional appeals. Sometimes we do not take steps that would make our lives go a lot better. If welfare is our guide, means paternalism might be required, not forbidden.

To be fair, Sunstein recognizes that many antipaternalists are motivated by freedom, not some abstract measure of human welfare.

Suppose that we are not so focused on welfare and that we believe that freedom of choice has a special and independent status. We might think that people have a right to choose, even if their choices cause harm, and that government cannot legitimately intrude on that right, even if it does in fact know best. …Many of the most deeply felt objections to paternalism are based on an intuition or judgment of this kind. They often take the form of a question: By what right can government legitimately interfere with the choices of free adults?

This passage captures my view.

I actually agree with paternalists in that there are lots of people who make bad choices. I think a major problem is that these people over-value the positive feelings they get from “bad” behaviors today and under-value the harm  that those behaviors will cause in the future.

At the risk of making a sweeping judgement, I even think the biggest barrier to upward mobility is that some people don’t have a properly developed sense of deferred gratification.

So I think paternalists often are right, but I disagree with the notion that government should coerce people and impose “good” choices. Simply stated, freedom and liberty matter to me.

To butcher a very important quote, “I may disagree with your decision to smoke cigarettes and guzzle 32 oz. sodas, but I will defend to the death your right to do so.”

Actually, to be perfectly honest, I won’t defend to the death your right to be foolish. But I’ll surely write a snarky blog post.

Let’s close by acknowledging there are some gray areas. What about the idea that government can “nudge” us to make better choices? A classic example is a government rule to automatically sign new workers up for things such as 401(k) plans, but then give them the ability to opt out.

I don’t want government to interfere with private employment contracts, but that type of policy is obviously not nearly as objectionable as banning Big Gulps.

And you can come up with other proposals that might even pass muster with rabid libertarians. If a high school has a consumer finance class that teaches people about compounding and present value, that presumably will nudge them to be more pro-saving.

Is there anything wrong with that? Probably not, though we hard-core libertarians would argue that such lessons presumably would be part of the market-based education system.

In other words, there’s a reason why our answer to just about every question is “less government.” Not only is that a good philosophy, it’s also the way of getting the best results.

P.S. If Sunstein’s name sounds familiar, it may be because I have criticized him for endorsing more redistribution based on FDR’s awful Economic Bill of Rights.

On the other hand, I have favorably cited his research to show that too much regulation can cause needless deaths.

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The woman who saved the United Kingdom has died.

A Great Woman

I got to meet Margaret Thatcher a couple of times and felt lucky each time that I was in the presence of someone who put her nation’s interests first and was not guided by political expediency.

Such a rare trait for someone in public life.

The best tribute I can offer is to share some of her remarks that capture both her strong principles and her effective communication skills.

Here’s a clip from her famous speech stating that there’s “no such thing as public money.”

Can you imagine today’s spineless Tory politicians making such statements. Hardly, they’re too busy criticizing taxpayers for not voluntarily paying extra tax!

And here’s her powerful performance in the House of Commons exposing the left for being willing to impoverish the poor if it meant those with higher incomes suffered even more.

I’ve said the same thing in some of my interviews, but she obviously said it much more effectively.

P.S. If you weren’t sufficiently inspired by Thatcher’s words, here’s Reagan’s tribute to Coolidge and also a memorable passage from his inaugural address.

P.P.S. Let’s not forget that Thatcher was an indispensable ally with Reagan in the fight against the barbarity of communism.

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Sometimes I myopically focus on fiscal policy, implying that the key to prosperity is small government.

But I’ll freely admit that growth is maximized when you have small government AND free markets.

That being said, our goal should be to expand freedom, not merely to have the largest possible GDP.

Which is why the Freedom Index is a good complement to Economic Freedom of the World.

It shows, for instance, that Singapore may be ranked #2 for economic freedom, but it is only #39 when you look at all freedoms.

We also have a comprehensive ranking of economic and personal freedom for the 50 states.

Here are the full rankings from the newly released Freedom in the 50 States from the Mercatus Center, showing North Dakota as the state with the most freedom, with South Dakota (#2), Tennessee (#3), New Hampshire (#4), and Oklahoma (#5) also deserving praise for high scores.

Mercatus State Freedom Ranking

What makes Freedom in the 50 States so interesting is that you can mix and match variables based on your own preferences.

I checked the “fiscal” and “tax burden” categories, and South Dakota (no state income tax!) jumped to #1 for both of those measures.

You won’t be surprised to learn that New York is the worst state, not only overall, but also for various fiscal policy measures.

Who would have guessed, by the way, that there’s a “bachelor party” category based on laws governing alcohol, marijuana, prostitution, and fireworks. Interesting, Massachusetts is ranked #1, though I suspect most guys will still opt for #3-ranked Nevada.

P.S. I must be learning. I grew up in New York, which is #50 in the rankings of freedom in the states, and then in Connecticut, which ranks only #40. But I went to college in Georgia, which is #9 in the rankings, and I now live in the Virginia, which is #8. But I somehow doubt that I’ll ever wind up in North Dakota.

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A month ago, I answered a question about reconciling the absence of libertarian societies with the supposed superiority of libertarian principles.

I gave an uncharacteristically optimistic response, arguing that the world in many ways has become more free thanks to libertarian policies (or, to be more accurate, a decline in statism).

This led to several follow-up questions, mostly premised on the notion that I must be smoking crack to think government has become less of a burden. My defense would be that the world is more free than it was 40 years ago, but probably less free than it was 10 years ago, so it depends on your benchmark. And I definitely agree that the world is trending toward less freedom (with these charts being a very sobering example).

But the question that caught my eye, and makes for a good follow-up, comes from a reader in Missouri: “Why aren’t libertarians more persuasive?”

To elaborate, the question assumes that libertarianism is the right approach and that the evidence supports libertarian policies, so another way of phrasing the question is: “What is wrong with libertarians that they can’t sell libertarian ideas?”

Rising DependencyThe easy and simple answer is to say the problem is that the people are too susceptible to being bribed by politicians. As illustrated by the chart, more and more Americans are getting hooked on the heroin of government dependency.

And as more Americans adopt the moocher mindset found in Vermont, libertarians have a hard time developing a winning message.

But I think the reader is really asking whether the problem with libertarianism is…well, libertarians.

This is a fair question. Having given hundreds of speeches and engaged in thousands of conversation, I can say that many people make the following assumptions about libertarians.

1. On economic policy, libertarians don’t care about the poor. Since I work on fiscal issues, this is the one I deal with all the time. I try to explain – ad nauseam – that we want smaller government and more economic freedom because faster growth is the only effective way to lower poverty and help the poor. But a lot of people think we’re defending the status quo.

2. On social policy, libertarians are libertines, embracing and endorsing hedonism. This is probably the most common stereotype, and there definitely are libertarians who are motivated by a desire to get rid of laws that impinge on their freedom to do things like smoke pot. But the libertarian position is not that pot is good, but rather that prohibition is bad.

3. On foreign policy, libertarians are oblivious to external threats such as al Qaeda. I’ve had several people, for instance, complain about Ron Paul opposing the killing of Osama bin Laden, and they assume that means libertarians are somehow the modern-day equivalent of Soviet appeasers. Yet our message is that we favor national defense, but that we think we’ll have far less need to defend ourselves if we stop intervening in ways that have nothing to do with national security.

4. And in general, libertarians are ultra-individualists who reject concepts such as community, family, and nation. While it’s true that libertarians are motivated by individual freedom, opposition to government coercion does not imply that people can’t be good neighbors or good parents. Indeed, we would argue that a free society promotes private virtue. And there’s nothing inconsistent with patriotism and libertarianism, as illustrated by this t-shirt.

Looking at what I’ve written, I realize I haven’t answered the question. All I’ve done is identified some stereotypes and explained why they’re not accurate.

So I’ll simply conclude by making a rather unremarkable observation that overcoming these perceptions is a big challenge for libertarians – assuming that we want to make greater inroads with the masses.

P.S. I got nagged by several readers for not posting a “Question of the Week” last weekend. What can I say, I’m old and forgetful. But you can always peruse previous versions if you’re somehow suffering.

But I’ll try to compensate for my oversight with some humor. Since this post is about the supposed shortcoming of libertarians, here’s some self-mocking humor. We’ll start with a video portraying Somalia as a libertarian paradise, followed by cartoons on libertarian ice fishing and libertarian lifeguards, then an info-graphic showing 24 types of libertarians, and close with a poster showing how the world sees libertarians.

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I realize the sequester kicks in tomorrow and I should be writing about that rare opportunity to control the burden of government spending.

To be sure, my fingers are crossed that Republicans won’t snatch defeat from the jaws of victory, and I’ve been busy on Capitol Hill talking to folks about the issue, but this post already says everything you need to know about that topic.

It’s time to switch gears, particularly since I have a soft spot for feel-good stories.

And what could be more heart-tugging than a story about the right to keep and bear tanks?

Here are some blurbs from the Wall Street Journal.

Weapons buffs may stock semiautomatics in the gun safe. But nothing makes a statement like having an Army tank in the garage. …there are several hundred to 1,000 private tank owners in the U.S. …Brothers Ken and Gene Neal, owners of Bullet Proof Diesel, a truck-parts manufacturer in Mesa, Ariz., once took their 1966 British Chieftain tank into the desert and joyfully backed it over a rusty car. When their insurance agent inquired about their plans for the tank, the Neal brothers emailed back, “We are going to use it to take over the world.” Says Ken Neal, 45: “A tank is cool.”

Private Tank

The latest in home defense

But is it legal?

Yup, and it can even have a working gun if you’re willing to fork over $200 for a permit.

A tank in the U.S. can have operational guns, if the owner has a federal Destructive Device permit, and state laws don’t prohibit it. The permit costs $200, and the applicant must swear he hasn’t been a “fugitive from justice,” “adjudicated mentally defective” or convicted of “a misdemeanor crime of domestic violence.” A local law-enforcement official, usually a sheriff or police chief, has to sign off on the application. Tanks generally aren’t street-legal, so owners usually drive them off-road or on other private property. Some say local authorities sometimes make exceptions for parades, a quick test drive or a trip to the gas station.

But won’t tanks in private hands lead to horrible crimes? Doesn’t seem that way, particularly since the story mentions that the only tank used in a crime was one taken from a government armory.

And in sensible places such as Texas, local police think a tank is “awesome,” not a cause for hysteria.

Earlier this month, Mr. Bauer, the Texas banker, took his Chaffee out for a spin in his warehouse parking lot. He had rigged the .50-caliber machine gun on the turret with a propane system that generates the noise and muzzle flash of gunfire, without the bullets. He fired off several bursts. Minutes later, two Port Lavaca police cruisers pulled up. The first officer rolled down the window and asked dryly: “You know why we’re here, right?” Mr. Bauer assured him that no actual rounds had been fired. …The second policeman, Jeremy Marshall, got out of his car and eyeballed Mr. Bauer’s tank. “Awesome,” he said.

Meanwhile, a 6-year old boy in Maryland is suspended for making a gun shape with his fingers and a 5-year old girl in Pennsylvania is busted for having a pink plastic gun that shoots bubbles.

The best of America…and the worst of America.

But we shouldn’t be resting on our laurels. Most able-bodied men in Switzerland have fully automatic guns (i.e., capable of continuous firing) in their homes, so it’s an open question which nation is more “awesome.”

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While I generally have a happy-go-lucky attitude toward life, I’m pessimistic about public policy.

So when I got an email asking me how I would reconcile the supposed superiority of libertarian principles with the absence of libertarian societies, I initially was tempted to assert that our principles are sound and then give reasons why I nonetheless expect freedom to continuously diminish.

There are probably other reasons, but I think you get the idea. No wonder I’ve been speculating about where people should move when America descends into Greek-style economic chaos.

But I want to be uncharacteristically optimistic and explain why libertarian principles are still very relevant and that the outlook is better than we think.

So while I don’t expect that there will ever be a libertarian Nirvana, I also don’t think it’s time to throw in the towel and meekly accept the yoke of statism.

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I’ve always been a big fan of Economic Freedom of the World because it provides a balanced and neutral measure of which nations do best in providing free markets and small government.

And I like it even when it gives me bad news. It’s somewhat depressing, after all, to read that the United States has dropped from the #3 nation when Bill Clinton left office to the #18 country in the most recent index.

But for all its many positive attributes, Economic Freedom of the World isn’t a comprehensive measure of liberty. That’s why I’m very glad to see that Ian Vasquez and Tanja Stumberger have put together a Freedom Index designed to measure economic and personal liberty.

And since they’re both sensible people, their definition of personal liberty is very sound – i.e., the freedom to be left alone and not harassed, persecuted, or annoyed by government.

Here’s their description of what the Freedom Index is designed to measure.

…we use indicators that are as consistent as possible with the concept of negative liberty: the absence of coercive constraint on the individual. We do not attempt to measure positive freedom…nor do we measure so-called “claim freedoms,” which often become government-imposed attempts at realizing positive freedoms (e.g., the “right” or freedom to a have job or housing). …This index of freedom also does not incorporate measures of democracy or “political freedom.” …Democracy may be more consistent than other forms of government at safeguarding freedom, but it is not freedom, nor does it necessarily guarantee freedom. …We combine economic freedom measures from the Economic Freedom of the World (EFW) index with measures of what we somewhat imprecisely call civil or personal  freedoms. The economic freedom index and the personal freedom index we devise each receive half the weight in the overall index.

Here are some additional details on the personal freedom score.

For the personal freedom sub-index, we use 34 variables covering 123 countries… The index is divided into four categories: 1) Security and  Safety; 2) Freedom of Movement; 3) Freedom of Expression; and 4) Relationship Freedoms. …We have tried to capture the degree to which  people are free to enjoy the major civil liberties—freedom of speech, religion, and association and assembly—in each country in our survey.  In addition, we include indicators of crime and violence, freedom of movement, and legal discrimination against homosexuals.

So how do nations compare with this system?

New Zealand is the nation with the most freedom, followed by the Netherlands and Hong Kong. The United States is #7

Freedom Index Top 20

By the way, if you’re wondering about places to avoid on your next overseas vacation, Zimbabwe is in last place, followed by Burma and Pakistan.

And if you want to maximize your personal liberty, but aren’t as concerned about economic liberty, the top nations are the Netherlands (9.5), Uruguay (9.4), and Norway/Japan/New Zealand (9.2).

If you want to experiment with a life of very limited personal liberty, your “best” choices are Pakistan (3.1), Zimbabwe (3.2), Sri Lanka (3.4), and Iran (3.6).

Last but not least, here’s the video I narrated from the Center for Freedom and Prosperity that explains in more detail the economic-freedom component of the Freedom Index.

Hmmm…more growth and prosperity with free markets and small government. Such a novel concept!

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For five consecutive weekends, I responded to your “questions of the week.”

That involved queries about my views on when the monetary system will begin to unravel, whether I hated Republicans, what I thought about Senator Jim DeMint moving over to the Heritage Foundation, the degree to which the media is biased, and if my opinions have changed on any issues.

But last weekend, I got too wrapped up in other topics and neglected to answer any of the questions I received. So I’ll try to compensate by answering one question today and another tomorrow.

Today’s query actually is a request, not a question: “Take the Quiz and Tell Us How Libertarian You Are?”

Libertarian QuizAt first I thought this was going to be a request to take the World’s Smallest Political Quiz, put together by the Advocates for Self Government.

And that would have been an easy test since it involves only 10 questions. I’ve done if before and I’m a pure libertarian.

But the reader instead sent me the much more detailed test put together by Professor Bryan Caplan of George Mason University.

This means answering 64 questions, though it doesn’t actually take that long to complete.

Libertarian TestThe good news is that I got a 94, which sounds close to perfect.

The bad news is that the maximum score is 160, so I obviously fell far short of libertarian purity.

But even a 94 makes me a very unusual person. According to Professor Caplan’s grading system, I’ve “entered the heady realm of hard-core libertarianism.

Libertarian Test Summary

If you want to know why I got what appears to be a modest grade, it’s because the test basically measures whether you’re an anarcho-capitalist. And as I confessed back in 2011, when sharing this funny video poking fun at libertarianism, I’ve never been able to rationalize how to get rid of all government.

From an ideological perspective, I’d like to think that we could privatize courts, police, and national defense. But I just don’t see how the market would fill those roles.

So, yes, I’m a squish. But whenever anarcho-capitalists give me a hard time, I tell them that we should work together to get rid of 90 percent of government. Then we can squabble about what to do with the remaining 10 percent.

P.S. Since I shared the funny anti-libertarian video, I may as well share these other examples of humor targeting me and my fellow travelers.

And since sauce for the goose should be sauce for the gander, here’s some libertarian-produced humor mocking statists.

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The United Nations may be useful as a forum for world leaders, but it is not a productive place to develop policy. The international bureaucracy compulsively supports statist initiatives that would reduce individual liberty and expand the burden of government.

And you won’t be surprised to learn that the United Nations also wants to control the Internet. Actually, to be more specific, some nations want to regulate and censor the Internet and they are using the United Nations as a venue.

Writing for the Wall Street Journal, Gordon Crovitz explains this new threat. He starts by describing the laissez-faire system that currently exists and identifies the governments pushing for bad policy.

Who runs the Internet? For now, the answer remains no one, or at least no government, which explains the Web’s success as a new technology. But as of next week, unless the U.S. gets serious, the answer could be the United Nations. Many of the U.N.’s 193 member states oppose the open, uncontrolled nature of the Internet. Its interconnected global networks ignore national boundaries, making it hard for governments to censor or tax. And so, to send the freewheeling digital world back to the state control of the analog era, China, Russia, Iran and Arab countries are trying to hijack a U.N. agency that has nothing to do with the Internet. For more than a year, these countries have lobbied an agency called the International Telecommunications Union to take over the rules and workings of the Internet.

He then warns about the risk of government control.

Having the Internet rewired by bureaucrats would be like handing a Stradivarius to a gorilla. The Internet is made up of 40,000 networks that interconnect among 425,000 global routes, cheaply and efficiently delivering messages and other digital content among more than two billion people around the world, with some 500,000 new users a day. …The self-regulating Internet means no one has to ask for permission to launch a website, and no government can tell network operators how to do their jobs. The arrangement has made the Internet a rare place of permissionless innovation.

Crovitz identifies some of the specific tax and regulatory threats.

Proposals for the new ITU treaty run to more than 200 pages. One idea is to apply the ITU’s long-distance telephone rules to the Internet by creating a “sender-party-pays” rule. International phone calls include a fee from the originating country to the local phone company at the receiving end. Under a sender-pays approach, U.S.-based websites would pay a local network for each visitor from overseas, effectively taxing firms such as Google and Facebook. …Regimes such as Russia and Iran also want an ITU rule letting them monitor Internet traffic routed through or to their countries, allowing them to eavesdrop or block access.

And he warns that the Obama Administration’s representative seems inadequately committed to advancing and protecting American interests.

The State Department’s top delegate to the Dubai conference, Terry Kramer, has pledged that the U.S. won’t let the ITU expand its authority to the Internet. But he hedged his warning in a recent presentation in Washington: “We don’t want to come across like we’re preaching to others.” To the contrary, the top job for the U.S. delegation at the ITU conference is to preach the virtues of the open Internet as forcefully as possible. Billions of online users are counting on America to make sure that their Internet is never handed over to authoritarian governments or to the U.N.

With all the support Obama got from Silicon Valley and the high-tech crowd, one would think this is an issue where the Administration would do the right thing. And it sounds like the U.S. is on the right side, but the real issue is whether the American representative is prepared to tell the dictators and kleptocrats to jump in a lake.

The moral of the story is that the United Nations should not be a policy forum. The bureaucrats seem to have no appreciation or understanding of how the economy works, perhaps because they live in a bubble and get tax-free salaries.

And I don’t say that out of animosity. The folks I’ve met from the United Nations have all been pleasant and I even participated in a U.N. conference as the token free-market supporter.

But just because someone’s nice, that doesn’t mean that they should have any power over my life or your life. And many of the nations pushing to control and regulate the Internet are governed by people who are neither nice nor pleasant.

P.S. You probably don’t want to know my innermost fantasies, but one of them involved the United Nations.

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Part of my job at the Cato Institute is to educate people about free markets and fiscal policy.

In some cases, that means providing information and analysis to those already sympathetic to limited government. There are many people who like the idea of lower tax burdens, for instance, but they may not have given much thought to the interaction of tax rates, taxable income, and tax revenue, so that’s why I put together my Laffer Curve tutorial and why I wrote about this amazing data from the Reagan tax cuts.

The harder part of my job is reaching people with statist instincts. I wrote a post last week mocking an absurd example of Swedish egalitarianism, but I included some serious thoughts about why some people oppose liberty. How do I reach those people, especially when there’s some very interesting evidence showing fundamental differences in how liberals, conservatives, and libertarians see the world?

I don’t have a single answer to that question. Sometimes I use the utilitarian approach and show how capitalist nations outperform statist nations, as you can see in this comparison of North Korea and South Korea, and this post comparing Argentina, Chile, and Venezuela.

In other cases, I try a philosophical approach, one example of which is this video arguing against majoritarianism.

And sometimes I use horrifying anecdotes in hopes that people will realize the risks of unconstrained government.

But perhaps the folks at the Fund for American Studies have discovered a good way of educating statists. Take a look at this clever video.

P.S. Here’s another video from TFAS that uses an unusual tactic to get people to think about the value of capitalism and free markets.

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In this modern era where we’re all supposed to share our innermost thoughts, I’ve openly discussed my fantasies.

I confessed to the world, for instance, that I have a fantasy that involves about one-half of the adults in America. And I’ve also admitted to a fantasy involving Gov. Rick Perry of Texas.

Now I’m fantasizing about something new, and it’s all the fault of the Cato Institute. In a violation of the Constitution’s prohibition against cruel and unusual punishment, I have to watch tonight’s presidential debate in order to add my two cents to Cato’s live-blogging of the clash between Obama and Romney.

That got me thinking about some of my least-favorite episodes from past debates, and this moment from 1992 is high on my list (I had to watch that debate because my then-wife worked for the Bush Administration and I had to offer some insincere moral support).

The clip is a bit over three minutes, but it will only take a minute or so to see why this was such an unpleasant segment.

Here’s my latest fantasy. If there’s a similar question tonight, I hope either Romney or Obama gives the following response:

I’m not your daddy and you’re not my child. I’m running to be the President of the United States in order to oversee the legitimate executive branch responsibilities of the federal government. And I hope to reduce the burden of government to give you opportunities, not to take care of your needs. You’re an able-bodied adult. Take responsibility for your own life and provide for your own needs.

But I don’t expect my fantasy to get fulfilled. If a question like this is asked, both Obama and Romney almost surely will express sympathy and support.

The good news is that there have been a few politicians in American’s history who have been willing to say the right thing. Here’s a quote from Barry Goldwater that warms my heart.

I have little interest in streamlining government or in making it more efficient, for I mean to reduce its size. I do not undertake to promote welfare, for I propose to extend freedom. My aim is not to pass laws, but to repeal them. …I will not attempt to discover whether legislation is “needed” before I have first determined whether it is constitutionally permissible. And if I should later be attacked for neglecting my constituents’ “interests,” I shall reply that I was informed that their main interest is liberty and that in that cause I am doing the very best I can.

The bad news is that he got his you-know-what kicked in the 1964 election.

On the other hand, America did elect a President who said during his inauguration that “government is not the solution to our problem, government is the problem.”

And a 2011 poll showed that Americans – unlike their European counterparts – do not believe it is government’s job to guarantee that “nobody is in need.”

In other words, Julia, the fictional moocher woman created by the Obama campaign, is not representative of America. At least not yet.

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Thomas Sowell, George Will, and Walter Williams have all explained that the Constitution imposes strict limits on the powers of the federal government. This means, for all intents and purposes, that it is a somewhat anti-democratic document.

And by anti-democratic, I mean the Constitution puts restrictions on democracy (not restrictions on the Democratic Party, though in this case…).

More specifically, it doesn’t matter if a majority of people want Obamacare or a Department of Education. We live in a constitutional republic, a system specifically designed to protect individual liberties from tyranny.

The Founding Fathers obviously didn’t want our freedoms to be subject to the whims of a king, but they also wanted to protect us from the tyranny of the majority.

This is one of the reasons why I’m so happy to share this short video from the folks at the Institute of Humane Studies. The Supreme Court may have wimped out in fulfilling its role of  protecting us against untrammeled majoritarianism, but at least we can understand why it’s a good idea to protect economic liberty.

I particularly like the fact that the video cites the Supreme Court’s horrific Kelo decision.

By the way, if you want to understand the other side of the debate (or if you want to enjoy a good laugh), you can peruse my post on E.J. Dionne’s failure to understand history and constitutional governance.

P.S. I applied the lessons of this video in my post about why the U.S. government should promote liberty rather than democracy in the Middle East.

P.P.S. They probably don’t realize it, but Republicans actually came out against marjoritarianism in their party platform.

P.P.P.S. There is at least one Republican who is against majoritarianism (and for the right reason). Click here for the answer.

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A couple of months ago, I discussed a column by Arthur Brooks, in which he explained that libertarians and conservatives need to make a moral argument for capitalism and not just rely on statistics and economic analysis.

This is correct, I believe, and I cited myself as an example. When the flat tax became an issue in the 1990s, I gave lots of speeches, and I pontificated about lower marginal tax rates and getting rid of double taxation. I quickly learned, though, that people were most excited about getting rid of the corruption in the current system.

Brooks now makes his case for the morality of capitalism in a new video.

A superb job. His insights on earned success are very important. Indeed, this is why the dependency culture is misguided for both taxpayers and recipients.

President of the American Enterprise Institute

And it’s also why I try to stress that bloated government is basically a racket that either allows people to obtain unearned benefits or makes it harder for people to achieve earned success.

P.S. Brooks also is more than capable of making traditional economic arguments, as you can see from what he wrote about Europe’s collapsing welfare states.

P.P.S. And he has produced some first-rate research on the loss of ethics in Europe compared to the United States.

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Back in April, responding to an article written by Ann Hollingshead for the Task Force on Financial Integrity and Economic Development, I wrote a long post defending so-called tax havens.

I went through the trouble of a point-by-point response because her article was quite reasonable and focused on some key moral and philosophical issues (rather than the demagoguery I normally have to deal with when people on the left reflexively condemn low-tax jurisdictions).

She responded to my response, and she raised additional points that deserve to be answered.

So here we go again. Let’s go through Ann’s article and see where we agree and disagree.

A couple of weeks ago, I wrote a blog post criticizing the philosophies of Dan Mitchell, a libertarian scholar from the Cato Institute. I asked for a “thoughtful discussion” and I got it—both from the comments section of our blog and from Dan himself.  On his own blog, Dan replied with a thought-provoking point-by-point critique of my piece.

It has been a polite discussion, which is good because readers get to see that we don’t really disagree on facts. Our differences are a matter of philosophy, as Ann also acknowledges.

Dan made several interesting points in his rebuttal. As much as I’d like to take on the whole post right now, my reply would be far too long and I don’t think our readers would appreciate a blog post that approaches a novella. Rather I’ll focus on a couple of his comments that I find interesting on a philosophical level (there were many) and which demand a continued conversation because, I believe, they are the basis of our differences. We’ll start with a rather offhand remark in which Dan indirectly refers to financial privacy as a human right. This is an argument we’ve heard before. And it is worth some exploration.Unless I am very much mistaken, Dan’s belief that financial privacy is a human right arises out of his fundamental value of freedom. My disagreement with Dan, therefore, does not arise from a difference in the desire to promote human rights (I believe we both do), but rather in the different relative weights we each place on the value of privacy, which Dan (I’m supposing) would call an extension of freedom.

I wouldn’t argue with her outline, though I think it is incomplete. I’m a big fan of privacy as a principle of a civil and just society, but I also specifically support financial privacy as a means to an end of encouraging better tax policy. Simply stated, politicians are much more likely to reduce or eliminate double taxation if they feel such taxes can’t be enforced and simply put a country in a much less competitive position.

Okay, so on to [my] answer of the subject of this post. Privacy—and financial privacy by extension—is important. But is it a human right? That’s a big phrase; one which humanity has no business throwing around, lest it go the way of “[fill in blank]-gate” or “war on [whatever].” And as Dan himself points out, governments have a way of fabricating human rights—apparently some European courts have ruled that free soccer broadcasts and owning a satellite dish are a human rights—so it’s important that we get back to [philosophical] basics and define the term properly. The nearly universally accepted definition of “human rights” was established by the Universal Declaration of Human Rights, which the United Nations adopted in 1948. According to the UN, “human rights” are those “rights inherent to all human beings,” regardless of “nationality, place of residence, sex, national or ethnic origin, colour, religion, language, or any other status.” The Declaration includes 30 Articles which describe each of those rights in detail. “Financial privacy” per se is not explicitly a human right in this document, but “privacy” is, and I think it’s reasonable to include financial privacy by extension. But privacy is defined as a fundamental, not an absolute, human right. Absolute rights are those that there is never any justification for violating. Fundamental freedoms, including privacy and freedom from detention, can be ethically breached by the government, as long as they authorized by law and not arbitrary in practice. The government therefore has the right to regulate fundamental freedoms when necessary.

I’m not sure how to react. There are plenty of admirable provisions in the U.N.’s Universal Declaration of Human Rights, but there are also some nonsensical passages – some of which completely contradict others.

Everyone hopefully agrees with the provisions against slavery and in favor of equality under law, but Article 25 of the U.N. Declaration also includes “the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services.”

That sounds like a blank check for redistributionism, similar to the statism that I experienced when I spoke at the U.N. last month, and it definitely seems inconsistent with the right of property in Article 17.

I guess what I’m trying to say is that I don’t care that the U.N. Universal Declaration of Human Rights includes a “right to privacy” because I don’t view that document as having any legal or moral validity. I don’t know whether it’s as bad as the European Union’s pseudo-constitution, but I do know that my support for privacy is not based on or dependent on a document from the United Nations.

As an aside, I can’t help noting that Articles 13 and 15 of the U.N. Declaration guarantee the right to emigrate and the right to change nationality, somethings leftists should keep in mind when they demonize successful people who want to move to nations with better tax law.

Getting back to Ann’s column, she confirms my point that you can’t protect property rights for some people while simultaneously giving other people a claim on their output.

That’s important because it means, that when it comes to freedom and privacy, we need to make choices. We can’t always have them all at once. To use a hideously crude example that gets back to the issue of tax evasion, in a developing country, a rich person’s right to financial privacy might be at odds with a poor person’s right to “a standard of living adequate for the health and well-being of himself and of his family.”

For those who are not familiar with the type of discussion, it is the difference between “negative rights” promoted by classical liberals, which are designed to protect life, liberty, and property from aggression, and the “positive rights” promoted by the left, which are designed to legitimize the redistributionist state.

Tom Palmer has a good discussion of the topic here, and he notes that “positive rights” create conflict, writing that, “…classical liberal ‘negative’ rights do not conflict with each other, whereas ‘positive’ rights to be provided with things produce many conflicts. If my ‘right to health care’ conflicts with a doctor’s ‘right to liberty,’ which one wins out?”

Continuing with Ann’s article, she says values conflict with one another, though that’s only if true if one believes in positive rights.

I started this post with a discussion of values, because at the core that’s what we’re talking about. Values are relative, individual, and often in conflict with one another. And they define how we rank our choices between human rights. Dan values freedom, perhaps above most else. He might argue that economic freedom would lead to an enrichment of human rights at all levels, but he probably wouldn’t disagree that that thesis remains untested. My views are a little more complicated because I don’t get to enjoy the (albeit appealing and consistent) simplicity of libertarianism.

I’m tempted to say, “C’mon in, Ann, the water’s fine. Libertarianism is lots of fun.” To be a bit more serious, libertarianism is simple, but it’s not simplistic. You get to promote freedom and there’s no pressure to harass, oppress, or pester other people.

As my colleague David Boaz has stated, “You could say that you learn the essence of libertarianism — which is also the essence of civilization –  in kindergarten: don’t hit other people, don’t take their stuff, keep your promises.”

The world would be a lot better if more people rallied to this non-coercive system.

One more point. Dan mentioned he does “fully comply” with the “onerous demands imposed on [him] by the government.” But as Dan insinuates, irrespective of an individual’s personal values, those demands are not optional. In the United States, we have the luxury of electing a group of individuals to represent our collective values. Together those people make a vision for the country that reflects our ideals. And then, we all accept it. If our country got together and decided to value freedom above all else, we would live in a world that looks a lot like Dan’s utopia. But, frankly, it hasn’t. So we respect our tax code out of a respect for the vision of our country. Dan has the right to try to shape that vision, as do I. Neither of us has the right to violate it.

What Ann writes is true, but not persuasive. Libertarians don’t like untrammeled majoritarianism. We don’t think two wolves and a sheep should vote on what’s for lunch.

We like what our Founding Fathers devised, a constitutional republic where certain rights were inalienable and protected by the judicial system, regardless of whether 90 percent of voters want to curtail our freedoms.

Ann, as you can see from her final passage, does not agree.

That, at is heart, is my problem with both tax evasion and tax avoidance. Neither lines up with the spirit of our collective compact; although the latter is not necessarily reflected in the official laws on the books. I’m not saying tax avoiders should be thrown in jail; they’ve done nothing illegal. I’m saying the regulations that confine us should line up with the vision we’ve created and the values we’ve agreed upon. If that vision is Dan’s, I’ll accept it. But I’m glad he’ll (begrudgingly) accept ours too.

I’m not automatically against having a “collective compact.” After all, that’s one way of describing the American Constitution. But I will return to my point about America’s founders setting up that system precisely because they rejected majoritarianism.

So what does all this mean? Probably nothing, other than the less-than-remarkable revelation that Ann and I have different views on the legitimate role(s) of the federal government.

Since I want to restrain the size and scope of government (not only in America, but elsewhere in the world) and avert future Greek-style fiscal nightmares, that means I want tax competition. And, to be truly effective, that means tax havens.

If that appeals to you (or at least seems like a reasonably hypothesis), I invite you to read some writings by Allister Heath of the United Kingdom and Pierre Bessard of Switzerland.

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Even though I’m a dull and straight-laced guy, that doesn’t mean I want the government to pester, harass, and persecute people for engaging in victimless crimes that I find distasteful.

Especially when interventionism and prohibition doesn’t work. To be blunt, the War on Drugs has been a costly failure (much like the War on Poverty).

Fortunately, it appears that more and more people are coming to the same conclusion – and many of them aren’t libertarians. For instance, I recently cited Mona Charen’s wise comments about the issue.

Even more remarkable are the statements from one of America’s leading evangelicals, Pat Robertson.

Here’s the key sections from an Associated Press report.

Religious broadcaster Pat Robertson says marijuana should be legalized and treated like alcohol because the government’s war on drugs has failed. The outspoken evangelical Christian and host of “The 700 Club” on the Virginia Beach-based Christian Broadcasting Network he founded said the war on drugs is costing taxpayers billions of dollars. He said people should not be sent to prison for marijuana possession. The 81-year-old first became a self-proclaimed “hero of the hippie culture” in 2010 when he called for ending mandatory prison sentences for marijuana possession convictions. “I just think it’s shocking how many of these young people wind up in prison and they get turned into hardcore criminals because they had a possession of a very small amount of a controlled substance,” Robertson said on his show March 1. “The whole thing is crazy. We’ve said, ‘Well, we’re conservatives, we’re tough on crime.’ That’s baloney.” …Robertson said he “absolutely” supports ballot measures in Colorado and Washington state that would allow people older than 21 to possess a small amount of marijuana and allow for commercial pot sales. Both measures, if passed by voters, would place the states at odds with federal law, which bans marijuana use of all kinds. While he supports the measures, Robertson said he would not campaign for them and was “not encouraging people to use narcotics in any way, shape or form.” “I’m not a crusader,” he said. “I’ve never used marijuana and I don’t intend to, but it’s just one of those things that I think: this war on drugs just hasn’t succeeded.”

Wow, not only for legalization, but “absolutely” supports ballot initiatives in Colorado and Washington. Kudos to Rev. Robertson for recognizing the human cost of the Drug War. As the old saying goes, not everything immoral should be illegal.

Here’s five minutes from Gov. Gary Johnson on the issue.

Very well stated. Legalization is common-sense conservatism. Too bad Gary Johnson didn’t get more attention early in the GOP race.

The Drug War doesn’t work, and it is the ultimate example of Mitchell’s Law since it has spawned bad policies such as asset forfeiture and anti-money laundering rules.

Time to “just say no” to big government.

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As a libertarian who became interested in public policy because of Ronald Reagan, it won’t surprise you to know that I’m more of a “right libertarian” than “left libertarian.”

I fully agree with positions that motivate left libertarians, such as the war on drugs doing more harm than good, foreign entanglements such as NATO no longer serving America’s national security purpose, and the importance of preserving constitutional protections of civil liberties. But since I’m a fiscal policy economist, I normally consort with conservatives.

And my frequent interactions with conservatives sometimes lead me to wonder why we aren’t closer allies. Well, maybe we can be if both sides read what Tim Carney wrote for today’s Washington Examiner.

His column is about Rick Santorum’s inability to unite proponents of limited government, but that’s secondary to the insightful analysis on how conservatives and libertarians can be natural allies. Here are key passages.

For many of today’s liberals, if something is bad — like the traditional light bulb, a very high health-insurance deductible, a gas-guzzling car, or a lack of racial diversity — the government ought to outlaw it. Maybe they can’t comprehend the mind-set of many of today’s conservatives, who revere both individual liberty and traditional morality as the necessary conditions for human happiness and thus say that certain behaviors are immoral but shouldn’t be illegal. Not only are traditional morality and limited government totally compatible, today they are intimately linked, as the Left uses big government to subsidize abortion providers and force all employers to pay for their employees’ contraceptives. …the moral law should guide our personal actions, and individual liberty should guide our political decisions. …When liberals cry that conservatives are trying to legislate morality, that’s typically projection and misdirection from liberal attempts to legislate morality — they say we’re trying to outlaw buying contraception because we oppose their efforts to mandate buying contraception. …More often than not, in the United States these days, it’s the secular Left imposing its morality on the religious Right. Don’t want to photograph a gay wedding? You’re fined. Don’t want to sell the morning-after pill at your pharmacy? You’re driven out of your job. Don’t want to pay for your employees’ sterilization? You’re a criminal. Don’t want to subsidize Planned Parenthood with your tax dollars? Tough, pay up. An alliance between libertarians and conservatives is natural and right today. …The proper conservative response is to fight for the liberty of all Americans, including religious conservatives, to manage their own affairs according to what they believe is correct. Increasing the size of government, even in the name of a more moral society, simply gives the Left more weapons to turn on the Right in the culture war — Obamacare is the perfect example.

Maybe Tim’s column makes sense to me because I’m somewhat of a social conservative in my personal life. I’ve never smoked, never done drugs, don’t like gambling, rarely drink, don’t deal with prostitutes (other than the non-sexual ones serving in government), and have a traditional view on the importance of family. But I’ve never thought my boring personal preferences should be part of the law.

But as Tim explains, leftists believe in imposing their views on everyone else. And the last sentence in the excerpt shows why conservatives and libertarians should be united in opposition to statism. Big government gives the left the tools to advance an agenda that undermines both morality and liberty.

So with that in mind, I’m going to do something similar to Mitchell’s Law and Mitchell’s Golden Rule. But in this case, I’ll actually give credit to someone else. As shown in the picture, libertarians and conservatives should unite behind Carney’s Fusionist Theorem.

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Someone has to take the tough assignments

I’m currently in the British Virgin Islands to speak at a conference. As you can see from this photo (taken from my satellite office), I’m having to endure hardship conditions.

But I’m willing to suffer because I believe in making personal sacrifices in the battle for liberty.

As you can probably guess, I’m speaking about tax competition. But I write about that issue so much that there’s no need for me to reiterate my remarks.

Instead, I want to focus on the speech given this morning by Sir Richard Branson, founder and head of the Virgin business empire.

Why does Branson get higher billing than me?!?

Sir Richard is a tax resident of BVI (which is a smart step since there’s no income tax here and the top tax rate in the U.K. is 50 percent), and most of his speech focused on business and development advice for his adopted home.

But he also spent several minutes talking about the damaging and destructive impact of the War on Drugs. And I’m proud to say that he cited data from a Cato Institute report on the successful decriminalization policy in Portugal.

This isn’t the first time he’s mentioned Cato’s work on the issue, by the way. As my colleague Tim Lynch noted last year, Branson also cited the Portugal study in a strong message against the failed War on Drugs that he posted on the Virgin.com website.

I suspect Branson isn’t willing to give up his day job running the Virgin Group, but we’re happy to have him as a volunteer publicist for our studies and the cause of liberty.

Incidentally, he’s not the only one who has commented on this development. The Economist also has noted the positive impact of Portugal’s pro-liberty policy.

And if you want general information on the failed Drug War, check out this story on the complete mis-match between the costs and benefits of prohibition. And here’s a speech by Gov. Gary Johnson on the issue, as well as a video exposing how the War on Drugs is completely ineffective – or even counterproductive.

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I sometimes make fun of the English, for reasons ranging from asinine laws to milquetoast politicians to horrid healthcare policy.

But at least some U.K. elected officials are willing to stand up for tax competition and fiscal sovereignty by defending low-tax jurisdictions. In previous posts, I’ve applauded Dan Hannan and Godfrey Bloom for great speeches at the European Parliament.

There are also some sensible people in the U.K. Parliament, most notably Mark Field.

Here are some excerpts from an article in the U.K.-based Telegraph.

A conservative MP has spoken out in defence of tax havens and against what he called “a one-sided debate that demonstrates a fundamental lack of understanding of their role in the global financial market”. …In an attempt to balance the “one-sided” debate on international finance centres (IFCs), Mr Field…advised the UK government to think twice before imposing more regulation on these jurisdictions. …In a bid to dismiss the age-old belief that tax havens attract investors purely because of their tax regimes, Mr Field argued that it is a combination of their political stability, familiar legal systems, quality of service, lack of foreign exchange controls, and tax and legal neutrality that make them ideal locations to deposit money.The current financial crisis, he continued, had more to do with poor regulation and mistakes made onshore rather than offshore, and if the EU pressed ahead with its intention to harmonise tax systems across international borders “it could potentially represent the end for healthy tax competition… Tax harmonisation and cooperation, added Mr Field, was simply Brussels-speak for exporting high tax models on continental Europe to low tax jurisdictions.

These issues are just as relevant for the United States, but how many American politicians stand up and defend free markets and jurisdictional competition as a means of restraining the political predators in Washington?

I’m re-posting my video on The Economic Case for Tax Havens below, for those who haven’t seen it. But I also want to call your attention to this chart from the Treasury Department.

You’ll have to click and enlarge it. You’ll see that it shows the amount of capital invested in America from various parts of the world. The “C” category shows that more money is invested in America via Caribbean banking centers such as the Cayman Islands than from any other source.

And this is just one type of foreign investment. As I’ve explained elsewhere, foreigners have more than $10 trillion invested in the U.S. economy, in part because the United States is a tax haven for foreign investors.

So when Obama climbs into bed with the Europeans to push a global network of tax police, he’s pushing policies that ultimately will do great damage to American competitiveness.

Let’s close by returning to the original theme of wise and astute Englishmen. If you want a good defense of tax competition and tax havens, read what Allister Heath wrote last year.

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Maybe it is because he’s the new kid on the block and Ron Paul has the loyalty of most freedom-oriented GOPers, but I’m a bit surprised that Gov. Gary Jonson has not attracted more support.

Here’s a video, newly released, featuring an interview with Glenn Reynolds (aka, Instapundit).

The people who read this blog are probably his target audience. Do you like Gary Johnson, or not? And why?

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In previous posts, I’ve linked to some great speeches by some great Presidents.

Now here’s a speech by someone I wish could be President.

Margaret Thatcher saved the United Kingdom, just like Reagan saved America. Did anybody hear a candidate talk like either one of them during the last GOP debate?

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Okay, the title of this post is a huge overstatement. I’ve already noted here that Argentina is not a good role model and warned here how that Obama is repeating many of the mistakes that undermined Argentinian prosperity.

But I’m nonetheless impressed that Argentina actually allows people at the Lujan Zoo to freely choose whether to enter cages with potentially deadly animals.

Here at the Lujan Zoo near Buenos Aires visitors can ride lions, cuddle bears, stroke tigers and feed cheetahs. Cages are accessible to everyone who paid $50 and signed the paper saying that if you are eaten, the Zoo is not responsible. Lujan Zoo is about 50 miles from from Buenos Aires, has an entrance fee of just £5. Visitors can even pick up the smaller animals and manhandle them at risk to themselves and the creatures. Shockingly there doesn’t appear to be much in the way of safety regulations.

I would probably be a wimp if I went to this zoo, so I would limit myself to the lion cubs or something like that. But I support the right of other people to engage in risky behavior

(h/t: Marginal Revolution)

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There are lots of things that are important for a good life and a prosperous, well-functioning society, including family and community. But something else that belongs on the list, at least if you want more growth, is individualism.

Here’s an excerpt from a new study by two scholars at the University of California at Berkeley.

The model shows that individualism has a dynamic advantage leading to a higher economic growth rate… We provided empirical evidence of a causal effect of individualism on measures of long run growth (output per capita, productivity) and innovation by instrumenting individualism scores with the frequency of blood types which are neutral genetic markers and plausibly satisfy the exclusion restriction. Parents transmit their culture as well as their genes to their children so that genetic data can serve as proxies for vertical cultural transmission and it is unlikely that there is a direct feedback from e.g. output per capita to genes. Since that research shows a powerful effect of culture on long run growth, the key question is what dimensions of culture other than individualism/collectivism matter for long run growth. In this paper, we look at the main existing cross-country measures of culture and analyze their effect on output per capita. We find essentially that only individualism has a robust effect. …We conclude from this exercise that the individualism-collectivism dimension is the central cultural variable that matters for long run growth.

(h/t: Garett Jones)

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Sometimes it is a pain in the neck to be allied with conservatives. Just like liberals, conservatives sometimes are guilty of imposing their preferences on society, regardless of clear and unambiguous language in the Constitution.

The most recent example is a case originating in Kentucky. Every Supreme Court Justice, with the exception of Ruth Bader Ginsburg, voted to ignore the 4th Amendment and allow unlawful entry into the dwelling of a private citizen. Michael Walsh of National Review explains in the New York Post.

A series of recent court rulings, including one this week from the US Supreme Court, appear to erode one of our bedrock defenses against the arbitrary, abusive power of the state. At risk: the Fourth Amendment guarantee to all American citizens of the right to be “secure in their persons, houses, papers, and effects, against unreasonable searches and seizures.” On Monday, in Kentucky v. King, the high court upheld the conviction of a man arrested after cops — who were tailing a suspected drug dealer into an apartment building — smelled marijuana smoke and banged on his door. When they heard noises coming from the apartment “consistent with the destruction of evidence,” they broke in and found drugs. But they had the wrong guy. The drug courier was in another apartment. Hollis King may have been breaking the law, but he was minding his own business, on his own premises, and only became a suspect after the police had made their mistake. But Justice Sam Alito, writing for the 8-1 majority, said, in effect, So what? …What planet is Alito living on? The whole point of the Bill of Rights is to restrict authority. The Founders, who suffered under the British system of “general warrants” and “writs of assistance” — i.e., fishing expeditions — wished to ensure that no American home could be searched without probable cause and a duly issued warrant specifying exactly what police are looking for. The case has been remanded to Kentucky, to sort out whether the circumstances were truly “exigent.” But Alito’s interpretation is an open invitation to abuse — as Justice Ruth Bader Ginsburg emphatically warned in her dissent: “The court today arms the police with a way routinely to dishonor the Fourth Amendment’s warrant requirement in drug cases. In lieu of presenting their evidence to a neutral magistrate, police officers may now knock, listen, then break the door down — never mind that they had ample time to obtain a warrant. I dissent from the court’s reduction of the Fourth Amendment’s force.”

The final point I’ll make is that this is yet another sign that the War on Drugs is a disaster. It results in bigger government and less freedom. You can be completely anti-drug (like me), but still realize that it’s not the job of government to dictate the decisions of other people.

Or, if you want to control other people, do it within the confines of the Constitution. Is that too much to ask?

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I’ve been fortunate to know Walter Williams ever since I began my Ph.D. studies at George Mason University in the mid-1980s. He is a very good economist, but his real value is as a public intellectual.

He also has a remarkable personal story, which he tells in his new autobiography, Up from the Projects. I’ve read the book and urge you to do the same. It’s very interesting and, like his columns, crisply written.

To get a flavor for Walter’s strong principles and blunt opinions, watch this video from Reason TV. I won’t spoil things, but the last couple of minutes are quite sobering.

I suppose a personal story might be appropriate at this point. My ex also was at George Mason University, and she was Walter’s research assistant. Walter would give multiple-choice tests to students taking his entry-level classes and she was responsible for grading them by sending them through a machine that would “click” for every wrong answer. For almost every student, it sounded like a machine gun was going off. Suffice to say, Walter’s classes were not easy.

So while I’m glad to say he’s my friend, I’m also happy I never took one of his classes.

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Regular readers know that I’m a big fan of tax competition because politicians are less likely to misbehave if the potential victims of plunder have the ability to escape across borders.

Here is an excerpt from a superb article by Allister Heath, one of the U.K.’s best writers on economic and business issues.

In a modern, global and open world, states have to compete for people. Weirdly, that is something that a large number of commentators have failed to recognise… They assume implicitly that governments remain quasi-monopolies, as was the case throughout most of human history, with citizens mere subjects forced to put up with poor public services, high taxes, crime, misgovernment and a poor quality of life. Yet the reality is that there is now more competition than ever between governments for human capital, with people – especially the highly skilled and the successful – more footloose and mobile than ever before. This is true both within the EU, where freedom of movement reins, and globally. …competition between governments is as good for individuals as competition between firms is for consumers. It keeps down tax rates, especially on labour and capital, which is good for growth and job creation; states need to produce better services at the cheapest possible cost. And if governments become too irritating or incompetent, it allows an exit strategy. It is strange how pundits who claim to want greater competition in the domestic economy – for example, in banking – are so afraid of competition for people between states, decrying it as a race to the bottom. Yet monopolies are always bad, in every sphere of human endeavour, breeding complacency, curtailing innovation and throttling progress. …Globalisation is not just about buying cheap Chinese goods: it also limits the state’s powers to over-tax or over-control its citizens.

For those who haven’t seen them before, here are a couple of my videos that elaborate on these critical issues.

First, here’s a video on tax competition, which includes some well-deserved criticism of international bureaucracies and high-tax nations that are seeking to create global tax cartels.

Here’s a video that makes a powerful economic case for tax havens.

But this is not just an economic issue. Here’s a video that addresses the moral issues and explains why tax havens play a critical role in protecting people subject to persecution by venal governments – as well as people living in nations plagued by crime and instability.

And last but not least, this video punctures some of the myths promoted by the anti-tax haven advocates of global tax cartels.

By the way, since the main purpose of this post is to draw your attention to the superb analysis of a British writer, I may as well close by drawing your attention to a couple of speeches by Dan Hannan, a British member of the European Parliament. In a remarkably limited time, he explains what this battle is all about.

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This is beautiful. It’s so refreshing to have a handful of Republicans who actually understand that their job is promoting freedom.

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