The Free Market Journal Blog

While the Bush administration continues to castrate the Constitution, its also sneaking in a minimum wage increase that will raise it from 5.15 currently to 7.25 in 2009. Not only is he securing his legacy as an enemy of the small business owner, but his policy will bleed into the first quarter of the following presidency. Raising the minimum wage is so harmful to the economy and business owners, its a wonder that no president has ever heeded the words of economists from the past and present. The minimum wage is the biggest undocumented cause of unemployment in America. Its undocumented because the man who can’t get a job because he is willing to work for less than the minimum wage never becomes a statistic at all.
The minimum wage further strips power away from private business owners by disallowing them to pay employees what they’re actually worth. But since a market value must still be used when hiring prospective employees, it will become increasingly harder for employers to hire unskilled workers at the minimum wage and still stay above water. The only companies that will be able to absorb the two dollar hike are bigger companies like Wal-Mart and Target. Mom and pop are once again S.O.L. Employers will begin hiring less people rather than pay more money to the same amount of people. One worker will be forced to do the job of two or three, or else be fired in lieu of someone who will.
A two dollar increase is huge when you look at the effects it will have on certain businesses. Small gas station owners, for example, will have a difficult time paying employees while also trying to keep up with the skyrocketing prices of fuel resources. The minimum wage is, as has been said time and time again, a socialist idea. Though in works in reverse of a wage cap, it still has the same effect. It also forces employers to pay people more than their market value. Some businesses are not hurting for applicants, while some have to hire whoever they can.
Bush is doing his damnedest to make sure the economy is strangled by his policies, just like he’s done with every other facet of human life.
John C. Keyser
May 29,2007

Freedom itself has become such a fragile concept that people are afraid to say what it really means to fight for it. For the past century, and indeed long before, fearless men and women have put themselves in danger because the government tells them they’re doing it so that America will stay free. And they believe it. American service members don’t join because they want to intervene in foreign affairs, they do it because they truly believe that without their service, America would be in grave peril. As of late, and perhaps since World War 2, this isn’t the case.
There are myths that recruiters prey on the poor and unintelligent. The American military, in fact, boasts some of the highest I.Q.’s in the nation, and even they cannot always see through the extremely effective propaganda the government lays out. Freedom, as a concept, is something that members of every political group at least say they strive for.
What the military does do effectively (at least enlisted service-members) is prevent a draft. Though this may be a controversial point in anarchistic and libertarian circles, if no one enlisted under the past two administrations, a draft would be in full effect. The phrase “they went so we don’t have to” has rings of truth to it, but you could change it to “they went so the bureaucrats won’t make us.”
The National Guard is no longer even being used for its intended purpose, as Bush has deployed them in support of his interventionism. If the military were truly being used in an effective fashion, they would be protecting American citizens against overzealous cops, the IRS, and power mongering politicians. These are the real threats to the American public, not homeless, unorganized religious zealots. Bush and his ilk like to spread the military thin, so that they can cover unprotected constituents with a fascistic blanket of law.
The military’s purpose is to protect the people from government-authorized attacks, not from attacks by a ragtag group of a few. A few, it should be noted, who eluded an incompetent collective of internal federal agencies for years.
Memorial Day is a day to remember fallen brave men and women, not because they are war mongers, but because they know what hell is; a master-slave government who doesn’t see them as individuals, but part of a dropping number. “We’ve only lost 3,000” they’ll say in the same breath as “we’ve created 3,000 jobs.”
If you think that much of the anti-war crowd is composed of hippies and socialists, you’re wrong. War makes many things out of a man, not the least of which is a stalwart anti-government radical.
And if you think I’m not speaking from experience, that I aim to belittle what service-members and their families have given up, well you’re wrong about that, too.
John C. Keyser
Memorial Day 2007

The history of libertarianism hasn’t enjoyed the same level of documentation as many other political movements. Any history written has been relegated to biographies of the founding fathers and texts written about the objectivist movement. And although these things are inherently libertarian in nature, they don’t cover the history of the actual movement, which reads like an economic history of America. It certainly has never been taught in public school, although historical figures like Thomas Jefferson held strong libertarian beliefs.
Brian Doherty, senior editor of Reason magazine, has undergone a massive undertaking in the form of his recent book, Radicals for Capitalism, which is an extensive history of the modern American libertarian movement. It covers well known intellectual figures like Ayn Rand, and lesser known activists like Leonard Read. The title of the book itself is a term Rand coined to describe herself and her followers. Radicals it at once a collection of mini-biographies of figure head libertarians and anarchists, and a telling of Doherty’s own personal beliefs. Which is really the only failing of the massive 700 plus page tome, that unlike other historical literature, the author makes no attempt to hide his libertarian beliefs. But it hardly makes it unreadable. In fact, knowing that Doherty’s passion lies within his book’s subject matter.
Chapter by chapter, Doherty chronicles the intellectual movement of libertarianism, giving short, journalistic descriptions of the movement’s people and beliefs. Doherty connects dots that historians normally don’t connect by likening the beliefs of Nobel prize winners like Milton Friedman to radical anarcho-economists like Murray Rothbard. Doherty delves beneath the mainstream political surface to prove that libertarian philosophers and economists come from every facet of human existence.
There are mini-economics lessons peppered throughout the first few hundred pages which provide the reader with references to authors and literature they may not previously been exposed to.
The most important thing about Radicals however, is not that it is explicitly libertarian, which it is, but that it provides a history of an almost underground movement which has been more consistent than any in fighting for personal liberties guaranteed to everyone who lives within America’s borders. It is a story of struggle against fascist bureaucracy and well-meaning dictators. It is a story of highly intelligent economic and liberty minded activists.
The book, for all that it is, is a Pulitzer-worthy volume that, like all other libertarian efforts, my never receive the understanding it strives to attain.
John C. Keyser
May 25, 2007

There is a basic truth that no politician or economics professor will likely ever admit; in order for any market to truly realize its full potential, the government must concede complete control of it to the producers and consumers. It is a hard truth initially to wrap your head around. How can we as consumers possibly protect our investments without regulation? Don’t we need an over seer? The short answer is no. The long answer is that the free market handles regulation and competition much more effectively than the government has or ever will.
Don’t believe me? Try shopping for different cable providers where you live. Try to buy medications without a doctor’s prescription when you’re sick. Try making money from having consensual sex. Try voluntarily betting your money online.
The fact is that most people are frightened to live in a society that government doesn’t intervene in.
The FDA, for example, takes years to approve a new drug. While the bureaucrats mill around and test a vaccine or medication, people die who could have otherwise been helped by the drug. If someone is dying of cancer anyway, why not let them voluntarily take the risk? The worst that could happen to them will happen without the drug anyway.
What about the children? The mentally disabled? Who will take care of them? Wherever a market demand for something exists, so will there be people who will want to be in business. The fact is that even now, with the huge tax burden (which can be argued is anywhere from 40-70%), people are charitable. Imagine how much charity would rise were the average worker able to keep more of his or her money.
Of course this is pure speculation, but it is logical speculation.
The point is that organizations run by the government which “guarantee” that the unfortunate will be taken care of will be better handled by a laissez faire system. When places like hospitals and orphanages are allowed to compete unrestricted, the consumer will win. Government run institutions have no incentive to keep things running smoothly, because the “owner” is the federal government. Private owners are motivated to offer the best services possible, because when their organizations fall into disrepair, they suffer in the market, and another entrepreneur is ready to take his place with his ideas.
John C. Keyser
May 23, 2007

The House of Representatives has again decided that the almost 500 billion dollars spent on the military and defense every year isn’t enough. The House has authorized 205 million dollars on joint U.S.-Israeli missile defense projects. So, Mr. or Ms. Taxpayer, its time once again to dig into your pockets and hand over those earnings….oh, wait, that money will never reach your pockets. The U.S. accounted for eighty percent of world defense spending prior to the new authorization, so why throw more money at a problem, Iran, that politicians insist doesn’t exist? As usual, bureaucrats are unanswerable to the citizens they blindly rob.
It is no longer enough to have someone represent you or a district in a politicial circle jerk. The H.O.R. is nothing more than a federal city council meeting that no one attends save for lawmakers.
The way the government sees it, they’re not a detriment to the economy since they have a monopoly on its currency.
We could talk about how that 205 million dollars will be split up, but does it matter when taxes are so out of control that they rarely ever go to programs that benefit any taxpaying Americans? This illustrates democracy’s fatal flaw: that representatives voted into power no longer represent the beliefs and wants held by their constituents.
The federal government will have to reverse its immigration policies if they wish to keep throwing taxpayer money into the wind. Making immigration legal would be very beneficial to a free market, but it would also benefit the government as long as its run like a business. The government doesn’t see an immigrant as a person, it sees the immigrant as another dollar it can tax or another dollar it can give away. However, the immigration policy is so muddled at this point, it likely will never be fixed. Even amongst “small government” conservatives, immigration is something that should remain a process as confusing and frustrating as waiting at the DMV or filing tax returns.
John C. Keyser
May 19, 2007

Allow me to offer some clarity. When a politician uses the word “free,” replace it in your mind with the word “sanctioned” or “regulated”. For example, when George W. Bush said that he was a supporter of free trade, what he meant was that he supports trade between producer and consumer so long as government oversees every aspect of the transaction, from the raw materials, to the production, to the hiring process, to the taxing of the product, to whether or not the consumer has a license to use the item.
See how bureaucrats can skew your understanding of words? So here are a list of words, defined and used in the proper context, that pertain to the world of economics.

FREE MARKET- also referred to as CAPITALISM,FREE TRADE, OR LAISSEZ FAIRE, is an economic system in which there are no restrictions on the relationship between producer and consumer. In this system, freedom of choice must be the prevalent ideal. People are allowed to buy or sell anything they wish. The “regulation” would come from the reputation of the seller and the quality of his products. If a producer sells a harmful or shoddy product, practices racist or sexist hiring, or lies to customers, he will lose his business because people will choose not to invest in what he sells. It is in this way that the FREE MARKET abolishes discriminatory practices more effectively than the federal government.
However, politicians hate free markets, and will tell their constituents that capitalism is a system of greed that leaves the underclass and minorities poor. How could they possibly make this assumption? No living politician has ever lived under such a market.
If America’s market were truly free, bureaucrats would have to get real jobs.

SOCIAL PROGRAMS-another term severely misused by the government. Social programs are programs such as welfare and affirmative action that are paid for by stealing money from working Americans. If politicians used the term TAXPAYER PROGRAMS, they likely wouldn’t get elected or they wouldn’t receive support for them. SOCIAL PROGRAMS sound like a good thing, the use of the word “social” makes taxpayers believe that they are programs every American can benefit from. The fact is that SOCIAL PROGRAMS represent the worst kind of discrimination an any economic system. They allow certain people to receive benefits from the labor of others. SOCIAL PROGRAMS are rooted in Marxist theory and are always said to have “good intentions”. I’m not sure what your parents taught you, but stealing money from your neighbor to pay for your food is not even an “ok” intention.

PROFIT- a reward an individual or company receives for the risk they take after they use their own devices to produce something. Revenue minus cost is profit. Profits are not evil. Profits are used to create more of what people want, and is indirectly affected by supply and demand. The government has so embedded into people’s heads the thought that profits are evil that people often boycott companies for accepting what money they voluntarily give them. Sound confusing?
For example, people will put gas in their vehicle, then boycott oil companies because they make profits. The same people could just ride a bike, walk, or use public transportation, but thanks to public schooling, they believe that anyone more successful than them is immoral.

PROPERTY RIGHTS-rights which allow the purchaser and owner of a product to do with it what he or she wishes. Property rights are probably the most important thing in a completely free society. Of course the government doesn’t necessarily see it that way. They agree with property rights as long as they don’t interfere with baseball stadiums, furniture stores, or casinos, all owned by people who give bureaucrats generous donations to rule in their favor. Property rights in America now mean almost nothing, thanks to eminent domain.

EMINENT DOMAIN- literally means “SUPERIOR OWNERSHIP”. Politicians love the term EMINENT DOMAIN because the average American doesn’t know the translation. EMINENT DOMAIN allows the government to do what whatever it wants with your property as long as its good for their wallets. This has led to people losing their homes and getting paid roughly 25% of the home’s market value from the government. This is often the result of someone daring to live where a company in bed with the feds wants to build another store.

John C. Keyser
May 19,2007

Homicides in the city of Baltimore have risen from 98 last year, to 108 this year. So what does City Council vice president Robert Curran propose should be done? Curran wants to give the mayor the ability to enact “public safety zones” in high-crime areas, which would give police the ability to shut down bars, liquor stores, and halt traffic for two weeks at a time. Never-mind that the bars and liquor stores are privately owned, but the bars aren’t causing people to die. The culprit in Baltimore’s culture of crime is the drug war, brought on by bureaucrats like Curran, who mistakenly believe that more government will solve social ills. Curran obviously hasn’t done the research on the causes of death in his own city.
“Criminals” in Baltimore kill each other over drugs. Like the war on terrorism, the war on drugs results in the deaths of innocent Americans. The market for illegal drugs has always been the violent version of a free market. Its not the lack of government intervention that allows these deaths to occur, but the fact that government intervenes at all. Since alcohol prohibition ended, people are no longer shooting each other over bottles of booze, yet politicians can’t seem to come to the same conclusion about the effects of making drugs legal. Giving the government the power to shut down private business in the name of public safety severely damages the economy, because only one of two things will happen if the mayor and citizens embrace Curran’s plan.
First, the business owners will get fed up at the loss of revenue and likely move their businesses elsewhere. Or, secondly, the government will have to promise relief to the business owners in the form of tax revenue.
Even if the war on drugs were effective, Curran’s plan doesn’t seem to even address the issues of drug-related violence.
Why is this one man’s opinion so important for the shape of things in Baltimore? Mayor Shiela Dixon (being vague as bureaucrats are) said that Curran’s plan was interesting, but she’d like to integrate it into plans she already has. Curran helped to pass Baltimore’s smoking ban, and there is a current trend in American culture to not attend city council meetings, thus giving bureaucrats the ability to vote their own ridiculous legislature into law. Nothing good ever comes when politicians are given the ability to pat each other on the back.
Throwing police officers and laws at the drug problem would be like Dr. Frankenstein attempting to deal with his monster by building more monsters to go after him.
John C. Keyser
May 18, 2007

The new favorite American past-time is to praise the government for their so-called protective measures and condemn oil companies for their greed. But how greedy is it to want to make a small profit, or to barely break even?
Middle eastern conflicts damage pipelines and methods of transit, making it more expensive to transport the oil from the sources America relies on. The oil companies certainly did not have any say in the Iraq war, though they have been demonized by the results of the fiasco. Add that to the fact that oil simply does not magically appear in the pumps while the Monopoly mascot sits in a high rise counting his money. Oil companies have to pay employees, pay for extremely high priced refineries, and drill. Those are but a few costs involved in producing oil for the American consumer.
On May 15th, there was an internet wide call to stay away from the pump to take 220 billion dollars way from the oil companies’ pockets. But that figure relied on the fact that every vehicle owner in America buys gas at the pump every single day, which is an absurd assumption.
Among the companies that make more profits than “big oil” are Google and Coca Cola, but there are no calls to boycott using search engines or getting caffeinated at the movies.
Because the government taxes gasolines on average between fifty and sixty cents a gallon, which already means you’re paying at least that much above market value. Earlier this week, and on several occasions prior, the government has fined small station owners and grocery stores for offering free or lower priced gasoline to citizens. In a competitive market, with no federal intervention, oil companies would be allowed to undercut each other and set lower prices. In those cases, the consumers always wins.
John C. Keyser
May 17, 2007

Basic economics should be as easy as “how to start a lemonade stand”, but government regulations and intervention have made it “how to start a lemonade stand as long as it doesn’t offend someone, is aesthetically pleasing, and allows for apple juice unions to continue to operate down the street”. So while any introductory text dealing with the economy should address operating costs, hiring, and profits and losses, its gotten a bit more complicated thanks to bureaucrats.
We’ll start with something simple, why smoking has been banned in many public places around the U.S.
Let’s say you’re a bar-owner in Smalltown U.S.A. Your patrons are 40 hour a week blue collar joes who just want to have a smoke and a beer after work. Why shouldn’t you be able to allow that as the owner of that property? There has never been a reason, based on logic, why these bans exist. The CDC itself has never published data that supports claims that secondhand smoke alone causes lung cancer. So, with no knowledge of the system’s inner working, the reasonable assumption is that smoking is banned in public (and private) places because it offends certain people, people who believe that even though they have the choice to stay out of an establishment, that establishment should cater to their prejudices in case they decide to walk through the door.
As 20/20 correspondent John Stossel put it in his 2004 book, Give Me A Break,
“I don’t smoke, so I like a smoke-free environment, but when both the owners and customers are okay with it, can’t it be their choice?”
When I walk into a Starbucks, I’m offended by the way they name their coffee and the pretentious laptop poets that sit and talk about what they learned in their government schools. Should I lobby my congressman to have these things stricken from that environment? Of course not, I’ll just get my coffee elsewhere, where they use terms like “large”, “cream and sugar”, and “coffee”. So why do anti-smokers get their way so often? And what does this have to do with economics?
Non-smokers make up a large enough portion of the population that they can affect public policy right down to private businesses. The first, and most important thing to learn about economics is that non-consumers can hurt private business owners by way of the federal and state government.
In a completely free market, this would not be an issue, as consumers would only be called such according to their relationship with the seller. A non smoker wouldn’t be a consumer in a bar where he or she didn’t frequent. Starbucks isn’t going to miss my dollar, but the bar down the street will, because I can’t smoke and have a drink the way the owner intended.
Now that its been established that government stifles the free market via lobbyists and politically correct “consumers”, the next thing to know is that it doesn’t have to be that way. Freedom of choice is the cornerstone ideal in a free market.
The economy is unjustly controlled by government intervention.

John C. Keyser
May 15, 2007