Business & Markets

Binswanger: All Regulation is Over-Regulation

Conservatives complain about “over-regulation,” but all governmental regulation—regulation as such—is destructive and evil. Ayn Rand wrote that the premise of regulation is “the concept that a man is guilty until he is proved innocent by the permissive rubber stamp of a commissar or a Gauleiter.” Dr. Binswanger will argue that government must have “probable cause” before it can use force against someone—and he will discuss how this applies not only to business activity, but also to immigration, “public health” and gun ownership. Recorded live as part of The Objectivist Conference on August 31, 2021.

Salsman: The Success of Gold-Based Monetary Systems

Writes Richard Salsman in “Honest Money Will Require Rediscovering America’s Founders” (NY Sun):

“The fact is that it worked efficiently, elegantly, and nearly automatically, especially when least managed or manipulated by monetary authorities. I contend that gold-based monetary systems were known for facilitating price discovery, profit calculation, private planning, saving and investment, international trade, and — consequently — economic prosperity. Efficient, practical success was most evident in the late 19th and early 20th centuries.

“Gold-based systems were less successful when government hoarded and debased gold under the gold-bullion standard, which obtained between 1914 and 1948, and even less so under the gold-exchange standard. That, of course, was Bretton Woods, between 1948 and 1971, when the dollar alone was directly redeemable in gold (for foreign central banks) and then further debased.

“The history illuminates how these three distinct versions of the gold standard tracked closely to the prevailing size, scope, and power of the United States government. A more limited government prevailed under the classical gold-coin standard; it was four decades with free trade, no income tax, no central bank, no welfare state, and no major wars. Subsequent versions were accompanied by massive increases in the welfare-warfare state.”

Read the full article.

Related:

Antitrust Fascism in China

For a modern 21st century of how fascism is implemented today, one can look at China. Quoting from the NY Times “What China Expects From Businesses: Total Surrender“:

“China’s Big Tech wields as much power as the American tech giants in the national economy. Like their American counterparts, the Chinese companies have appeared to engage in anticompetitive practices that hurt consumers, merchants and smaller businesses. That deserves scrutiny and regulation to prevent any abuse of power.

“But it’s important to keep in mind that the Chinese tech companies operate in a country ruled by an increasingly autocratic government that demands the private sector surrender with absolute loyalty. So unlike the antitrust campaigns that European and American officials are pursuing in their regions, China is using the guise of antitrust to cement the Communist Party’s monopoly of power, with private enterprises likely to lose what’s left of their independence and become a mere appendage of the state.” [emphasis added]

The name for such a policy is fascism.

Writes Ayn Rand on the nature of fascism:

“The main characteristic of socialism (and of communism) is public ownership of the means of production, and, therefore, the abolition of private property. The right to property is the right of use and disposal. Under fascism, men retain the semblance or pretense of private property, but the government holds total power over its use and disposal.

“The dictionary definition of fascism is: ‘a governmental system with strong centralized power, permitting no opposition or criticism, controlling all affairs of the nation (industrial, commercial, etc.), emphasizing an aggressive nationalism . . .’ [The American College Dictionary, New York: Random House, 1957.]

“Under fascism, citizens retain the responsibilities of owning property, without freedom to act and without any of the advantages of ownership. Under socialism, government officials acquire all the advantages of ownership, without any of the responsibilities, since they do not hold title to the property, but merely the right to use it—at least until the next purge. In either case, the government officials hold the economic, political and legal power of life or death over the citizens.”

Contrary to the New York Times article, their European and American counterparts are “using the guise of antitrust to cement” the government’s power. As an illustration, observe the threats by both Democrats and Republicans in the U.S. against “Big-tech.”

The difference is not one of principle, but only one of degree. The claws of American bureaucrats are chained by a withering constitution that limits that power and will continue to do so until it is interpreted out of existence.

China being a Communist dictatorship has no such restraint.

Andrew Carnegie: Titan of Steel

The Hero Show recently celebrated the Titan of Steel, Andrew Carnegie, one of the greatest industrialists of history.

Issues covered include “Carnegie’s early years in Scotland,  Carnegie’s arrival in America and his childhood jobs, Carnegie’s productivity and great moral character, How Carnegie took advantage of opportunities in oil production and the railway industry, and How Carnegie dominated the steel industry.”

Must watch!

What is the Purpose of a Business? Objectivist Yaron Brook Debates “Conscious Capitalist” John MacKey

From the description:

At each of Whole Foods Market’s more than 500 American stores, managers ask every team member—from the meat clerks to the baristas to the janitorial staff—to orient their work around a shared purpose, which is to make natural and healthy food widely available. This goal, according to Whole Foods CEO and co-founder John Mackey, is in no way inconsistent with maximizing shareholder value, often seen as the essential purpose of a corporation.  As Mackey writes in his new book about leadership, “At the heart of Conscious Capitalism is a radical refutation of the negative perceptions of business, and a rejection of the split between purpose and profit.” Mackey believes that this is the key to defending capitalism against those who condemn it for having no inspiring ideals.  At a Reason-sponsored Soho Forum debate held on February 18, 2020, Ayn Rand Institute Chairman of the Board Yaron Brook challenged this view. He believes that maximizing profit should always be the primary goal of companies, and it’s that focus which explains why capitalism has lifted the broad masses out of poverty. That’s the message businesses should be emphasizing, he said, and it’s inspiring enough.

The Antitrust Suit Against Facebook is Exactly How Antitrust Is *Supposed* To Work

Facebook’s chief counsel Jennifer Newstead responds to Antitrust Suit in “Lawsuits Filed by the FTC and the State Attorneys General Are Revisionist History“:

The Federal Trade Commission and state attorneys general today attack two acquisitions that we made: Instagram in 2012 and WhatsApp in 2014. These transactions were intended to provide better products for the people who use them, and they unquestionably did. Both of these acquisitions were reviewed by relevant antitrust regulators at the time. The FTC conducted an in-depth “Second Request” of the Instagram transaction in 2012 before voting unanimously to clear it. The European Commission reviewed the WhatsApp transaction in 2014 and found no risk of harm to competition in any potential market. Regulators correctly allowed these deals to move forward because they did not threaten competition.

Now, many years later, with seemingly no regard for settled law or the consequences to innovation and investment, the agency is saying it got it wrong and wants a do-over. In addition to being revisionist history, this is simply not how the antitrust laws are supposed to work.

I would not be so sure.

Writes philosopher Ayn Rand in her article “Choose Your Issues,” The Objectivist Newsletter, Jan. 1962, 1, on  the nature and purpose of the antitrust laws:

The Antitrust laws—an unenforceable, uncompliable, unjudicable mess of contradictions—have for decades kept American businessmen under a silent, growing reign of terror. Yet these laws were created and, to this day, are upheld by the “conservatives,” as a grim monument to their lack of political philosophy, of economic knowledge and of any concern with principles. Under the Antitrust laws, a man becomes a criminal from the moment he goes into business, no matter what he does. For instance, if he charges prices which some bureaucrats judge as too high, he can be prosecuted for monopoly or for a successful “intent to monopolize”; if he charges prices lower than those of his competitors, he can be prosecuted for “unfair competition” or “restraint of trade”; and if he charges the same prices as his competitors, he can be prosecuted for “collusion” or “conspiracy.” There is only one difference in the legal treatment accorded to a criminal or to a businessman: the criminal’s rights are protected much more securely and objectively than the businessman’s.

Recommended Reading:

 

Ludwig Von Mises’ Human Action: The Movie

Marcin Chmielowski and Krzysztof Paweł Bogocz have produced a documentary on one of the greatest economists of the 20th century — Ludwig Von Mises.

Ludwig von Mises was one of the most important economists in history. Unfortunately, he is commonly known and appreciated only in a narrow circle of experts and enthusiasts – ordinary people don’t know him or his extraordinary achievements. A fearless intellectual, scientist, teacher and in some sense a social inventor, Mises showed that human action is an important area of study, and that we all need to work to secure the blessings of liberty. But at the same time he was a conscript, refugee, husband, friend. A normal everyday person, somebody like our professor or a neighbor. We want to show that interesting combination, and to stress that in every freedom fighter lies a spark of genius.
Project financing was based entirely on voluntary donations from individual and corporate donors. No taxpayers suffered during production of this movie. The movie was produced by the Freedom and Entrepreneurship Foundation, an independent organization whose aims include: developing economic education, spreading libertarian philosophy and the concept of the minimal state, as well as exemplifying the benefits of a voluntary cooperation.

The Capitalist Professor Podcast with George Reisman

With the assistance of Capitalism Magazine, Dr. George Reisman author of Capitalism: A Treatise on Economics now has an online podcast — The Capitalist Professor.

The Capitalist Professor is a podcast featuring his university lectures on the micro and macro-economics of capitalism.

George Reisman, Ph.D., is Pepperdine University Professor Emeritus of Economics, and the author of Capitalism: A Treatise on Economics.

Link: The Capitalist Professor

 

Our Favorite Business Ethics Book is Now on Audible

How to Be Profitable and MoralProfessor Jaana Woiceshyn’s marvelous book on business ethics, How to Be Profitable and Moral: A Rational Egoist Approach to Business, has just been released as an audiobook narrated by Sean Salsbury.

Does one have to sacrifice business profits to be moral?

Dr. Woiceshyn says “no”, and explains why, by introducing business students a set of rational, logical, scientific principles on how they can maximize profits in the long run by acting morally.

Required reading — or listening — for all employees, business students, and CEOs.

Get it here.

p.s. We will have a full review posted shortly!

Mossoff: Google’s Absurd “Fair Use” Excuse For IP Theft

Writes Adam Mossoff in Newsweek on why Amidst Chinese Aggression, U.S. Cannot Afford to Dilute Its IP Laws:

The fact that Google copied Oracle’s software code to build Android, its smartphone operating system, is not disputed by anyone—not even by Google. Both the Obama and Trump administrations recognized, in their respective court filings, that Google directly copied 11,500 lines of computer code “from a rival software platform, inserted them into a competing, incompatible platform [Android] and then marketed the infringing product” to consumers. But Google is now arguing before the Supreme Court that the software code it took is not copyrightable—or alternatively, if it is, that the “fair use” doctrine should permit its illicit copying.

As it was first developed, fair use is a limited exception for education, parody, news reporting or other transformative purposes. For Google to argue that its undisputed copying of computer code for its own commercial gain is “fair use” is absurd.

Moreover, software code is clearly protected under American copyright laws. U.S. copyright law has expressly protected software code since Congress enacted in 1980 the Computer Software Copyright Act. What followed was a technological and commercial explosion in personal computers running all sorts of software programs—as well as the explosive technological growth in the software that runs on the internet and in our mobile devices.

….For the sake of global security for U.S. creators and innovators, the Supreme Court should hold Google accountable for copyright infringement.

Why health-care costs are 75% lower in Singapore than in the U.S.

Here is a breakdown from OECD on Health expenditure per capita, 2018 (or nearest year).*

Observe that the U.S. leads the way.

George Shultz and Vidar Jorgensen write in the Wall Street Journal on Singapore’s “Market-Based” Healthcare System:

Does a real health-care market exist anywhere in the world? It certainly doesn’t in the U.S., where health-care providers don’t tell patients in advance about pricing, outcomes or alternatives. Consumers don’t know what they’re buying or how much it costs. And the costs are largely paid by insurance companies, which don’t spend their own money. With a health-care market this dysfunctional, little wonder the U.S. spends 18% of gross domestic product on health.

If the U.S. wants lower costs, better outcomes, faster innovation and universal access, it should look to the country that has the closest thing to a functioning health-care market: Singapore. The city-state spends only 5% of GDP on medical care but has considerably better health outcomes than the U.S.

…What does Singapore do that’s so effective?

…All health-care providers in Singapore must post their prices and outcomes so buyers can judge the cost and quality.

…Singaporeans are required to fund HSAs through a system called MediSave and to purchase catastrophic health insurance. As a result, patients spend their own money on health care and get to pocket any savings.

…The combination of transparency and financial incentives has led to price and quality competition so intense that health-care costs are 75% lower in Singapore than in the U.S.

…Singapore’s system of health-care finance shouldn’t seem foreign to Americans, nor should we doubt that it could work here. The U.S. has already seen that the combination of competition and price transparency can be successful: Witness the falling prices for Lasik and cosmetic surgery, which aren’t covered by insurance. (“A Real Market in Medical Care? Singapore Shows the Way“, WSJ, June 15, 2020)

*Source: OECD Health Statistics 2019, WHO Global Health Expenditure Database. Note: Expenditure excludes investments unless otherwise stated. 1. Australia expenditure estimates exclude all expenditure for residential aged care facilities in welfare (social) services. 2. Includes investments.