Category Archive: Politics & Policy

  1. The organic industry is a case study in rent-seeking.

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    Adam Smith, the 18th century economist and philosopher, offered good insights into human nature as well as economics.  “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices,” he wrote in The Wealth of Nations.

    We’re seeing evidence of that in current lobbying skirmishes — for example, over whether novel, effective, inexpensive hearing aids should be made available over-the-counter. The battle lines are predictable: Patient groups are encouraging Congress to pass legislation that would create new standards for hearing aids that could be used by people with moderate impairment and sold at modest cost over-the-counter. Meanwhile, the association that represents audiologists believes “the absence of audiological involvement” would be “detrimental to patient outcomes.”

    The real issue is, of course, not “patient outcomes,” but what economists call “rent-seeking” — attempting to manipulate public policy in order to increase profits — on behalf of the association’s members.  The excellent new hearing aids, which resemble wireless ear buds, cost about $300, while conventional alternatives can cost many thousands.

    The self-interest of audiologists in that situation is quite obvious, of course; less so is the ongoing campaign by the organic agriculture and food and “natural products” industries to discredit and diminish modern genetic engineering of crops and the scientific community that is in any way involved with them.

    Is organic farming sustainable and environmentally friendly?

    Advocates of organic agriculture tout it as a “sustainable” and healthful way to feed the planet’s expanding population. That is wishful thinking, if not outright delusion, but it is being widely promulgated by the credulous media and the foodie elites.  The truth is that organic practices are to agriculture what cigarette smoking is to human health.

    In fact, organic practices result in a significant increase in leaching of nitrates into groundwater and impose a variety of stresses on farmland and especially on water consumption. Moreover, although composting gets good (and highly organized) PR as a “green” activity, on a large scale it generates a significant amount of greenhouse gases, and is also often a source of pathogenic bacteria applied to crops.

    Another prevalent “green myth” about organic agriculture is that it does not employ pesticides. Organic farming does, in fact, use insecticides and fungicides to prevent predation of its crops. More than 20 chemicals (mostly containing copper and sulfur) are commonly used in the growing and processing of organic crops and are currently acceptable under USDA’s arbitrary and ever-shifting organic rules, and many of those organic pesticides are more toxic than “synthetic” ones. In any case, as was pointed out by Bruce Ames and colleagues in a 1990 academic article, “99.99% (by weight) of the pesticides in the American diet are chemicals that plants produce to defend themselves.”

    The fatal flaw of organic agriculture is the low yields, which cause it to be wasteful of water and arable farmland.  Plant pathologist Dr. Steve Savage analyzed the data from the U.S. Department of Agriculture’s 2014 Organic Survey, which reports various measures of productivity from most of the certified organic farms in the nation, and compared them to those at conventional farms, crop by crop and state by state. His findings are extraordinary: Of the 68 crops surveyed, there was a “yield gap” — poorer performance of organic farms — in 59. And many of those gaps, or shortfalls, were impressive: strawberries, 61 percent less than conventional; fresh tomatoes, 61 percent less; tangerines, 58 percent less; carrots, 49 percent less; cotton, 45 percent less; rice, 39 percent less; peanuts, 37 percent less.

    These findings are important. As Dr. Savage observed: “To have raised all U.S. crops as organic in 2014 would have required farming of 109 million more acres of land. That is an area equivalent to all the parkland and wildland areas in the lower 48 states, or 1.8 times as much as all the urban land in the nation.”

    Is organic food healthy?

    Are the products of organic agriculture healthier or otherwise superior in any way? An article published in 2012 in the Annals of Internal Medicine by researchers at Stanford University’s Center for Health Policy aggregated and analyzed data from 237 studies to determine whether organic foods are safer or healthier than non-organic foods. They concluded that fruits and vegetables that met the criteria for “organic” were on average no more nutritious than their far cheaper conventional counterparts, nor were those foods less likely to be contaminated by pathogenic bacteria like E. coli or Salmonella.

    And on the subject of contamination: Organic foods are highly susceptible to it. According to Bruce Chassy, professor of food science at the University of Illinois, “organic foods are recalled 4 to 8 times more frequently than their conventional counterparts.”

    Organic agriculture is kept afloat by political rent-seeking.

    If organic agriculture isn’t sustainable, doesn’t produce more nutritious food and is far more expensive, what is the purpose of USDA-mandated organic standards and certification? “Let me be clear about one thing,” Secretary of Agriculture Dan Glickman said when organic certification was being considered: “The organic label is a marketing tool. It is not a statement about food safety. Nor is ‘organic’ a value judgment about nutrition or quality.”

    But that marketing tool has been grossly abused. Organic agriculture’s dirty little secret is that it is kept afloat only by massive subsidies and nurtured by a whole panoply of USDA programs, by misleading advertising, and by “black marketing” that disparages the competition with disinformation.

    Academics Review, a reliable, science-oriented nonprofit organization of academic experts, performed an extensive review of hundreds of published academic, industry, and government research reports concerned with consumers’ views of organic products. It also looked at more than 1,500 news reports, marketing materials, advocacy propaganda, speeches, etc., generated between 1988 and 2014 about organic foods.

    Their analysis found that “consumers have spent hundreds of billion dollars purchasing premium-priced organic food products based on false or misleading perceptions about comparative product food safety, nutrition and health attributes,” and that this is due to “a widespread organic and natural products industry pattern of research-informed and intentionally-deceptive marketing and paid advocacy.”

    It is hardly news that some industries systematically mislead the public to further their interests — who can forget the decades of mendacity from the tobacco industry — but the organic industry’s comparable actions are actively aided, abetted, and supported by the U.S. Department of Agriculture’s Organic Seal and the National Organic Standards Program (NOSP), in clear violation of the NOSP’s mission. Thus, American taxpayers are funding propaganda about organic products that misleads consumers with fraudulent health, safety and quality claims and fools them into supporting production methods that are an affront to the environment. This is rent-seeking.

    What about genetic engineering?

    Perhaps the most illogical and least sustainable aspect of organic farming in the long term will turn out to be the systematic and absolute exclusion of “genetically engineered” plants — but only those that were modified with the most precise and predictable modern molecular techniques. Except for wild berries and wild mushrooms, virtually all the fruits, vegetables, and grains in our diet have been genetically improved by one technique or another — often as a result of seeds having been irradiated or via “wide crosses,” which are created by moving thousands of genes from one species or genus to another in ways that do not occur in nature. Irradiation has produced thousands of useful mutants that comprise a significant fraction of the world’s crops, including varieties of rice, wheat, barley, pears, peas, cotton, sunflowers, peanuts, grapefruit, bananas, cassava and sorghum. Wide crosses have given rise to important varieties of oat, sugar beet, pumpkin, cotton, tomato, rice, bread and durum wheat, black currant, and corn.

    In recent decades, using molecular genetic engineering techniques, we have seen advances such as plants that are disease- and pest-resistant, boast higher yields, and are drought- or flood-resistant. These advances make farming more environmentally friendly and sustainable than ever before. But they have resulted from science-based research and technological ingenuity on the part of farmers, plant breeders, and agribusiness companies, not from social elites disdainful of modern insecticides, herbicides, genetic engineering, and large-scale “industrial agriculture.”

    As genetic engineering’s successes continue to emerge, the gap between modern, high-tech agriculture and organic methods will become a chasm, which brings us back to the cabal postulated by Adam Smith. There exists in this country (and elsewhere) a well-established, highly professional and vast anti-genetic-engineering industry fueled by special interest groups spending billions of dollars, seeking to line their own pockets but oblivious to the public interest.

    Some of the NGOs, their budgets and funders are listed in a table in an article, “The fat lies and fatter wallets of anti-GMO lobbyists,” by Iowa farmer Michelle Miller (no relation to this author), aka the “Farm Babe.” In the article, she describes the massive disinformation campaigns about genetic engineering in agriculture which attempt to make less efficient, inferior organic products more cost-competitive.

    These activists have even funded phony “advocacy research” that alleges health problems from genetically engineered crops and foods, “documentary” films — such as “Food, Inc.” and “Genetic Roulette” — and other propaganda tactics.  They have powerful allies in the media. Viewers of the Dr. Oz TV show, for example, have been repeatedly warned by “friend of the show” and anti-biotechnology activist/levitator (yes, you read that correctly) Jeffrey Smith and Stonyfield Organic CEO Gary Hirshberg that genetically engineered crops are inadequately tested and are actually responsible for adverse health effects.

    In its news articles, op-eds and columns by reporters and columnists such as Keith Schneider, Danny Hakim, Nassim Taleb and Mark Bittman, the New York Times has waged a decades-long campaign of opposition to genetic engineering that has been widely criticized by the scientific community.

    Because of discriminatory overregulation of genetically engineered crops worldwide, they “are the most studied crops in history,” in the words of plant biologists Miguel Sanchez and Wayne Parrott, in their landmark analysis of “scientific studies usually cited as evidence of adverse effects of GM food/feed.” Spoiler alert: They conclude, “Importantly, a close examination of these reports invariably shows methodological flaws that invalidate any conclusions of adverse effects.” In other words, the reports are consistently erroneous, representing flawed advocacy research from the same self-interested cast of characters. After the cultivation of more than 5.3 billion acres and the consumption of more than three trillion servings of food derived from genetically engineered crops, there has not been a single documented case of an ecosystem disrupted or a bellyache.

    When businesses offer consumers a spectrum of product choices, whether they are made with different technologies or in ways that appeal in some way to personal preferences — like halal, kosher, free-range or organic — market forces can operate.  But if businesses get government subsidies to make their products cheaper, or “capture” regulatory policies to limit or boost the prices of what the competitors can offer, that’s rent-seeking — which harms consumers, innovation, the economy, and in the case of organic agriculture, even the environment.

  2. College and Housing Bubbles

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    Remember the mid-2000s housing crash that wiped out homeowners? Well, there’s another bubble getting ready to pop, and this one’s in student debt. Prof. Antony Davies explains.

  3. The dirty word that gives us our freedom

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    Competition is often considered a dirty word, with many critics of free market ideas emphasizing the cutthroat competition of Wall Street as an example of how competition brings out the worst in people, encourages us to cut corners, and undermines our altruistic tendencies.

    Proponents of competition often talk in terms of innovation: competition spurs innovation, giving consumers options they didn’t have before. But even that defense isn’t enough for people who don’t understand the true importance of competition and innovation. Take Bernie Sanders’s derision of innovation as just a way to get lots of different deodorant on the shelves, for example.

    The Problem with the Way We Think about Competition

    What’s problematic about both the criticism and the common defense of competition? Both underestimate precisely why competition is so important. Competition does more than spur innovation or provide people with different kinds of deodorant. In some cases, competition provides us with the powerful freedom to decide what happens to our bodies and is the only thing that makes informed consent meaningful. This connection is particularly important in health care, but the importance of competition to human freedom applies in other areas as well.

    A particularly painful and poignant case study came out of Kentucky earlier this month: after one birth center owner spent many hundreds of thousands of dollars fighting the state’s Certificate of Need process, a Kentucky Appeals Court ruled that birth centers cannot compete with hospitals for maternity patients. This decision ignored that pregnant women in Kentucky want birth centers, are demanding birth centers, and that birth centers provide higher quality and lower cost care for low-risk pregnant women than hospitals do.

    The Broader Implications of Kentucky’s Ruling on Birth Centers

    While this may seem like a narrow case that applies just to pregnant women in Kentucky, its implications are far broader. What this case really does is tell pregnant women in Kentucky what they are allowed to do with their bodies. It tells entrepreneurs who are providing a safe and effective service that they are not allowed to make a living helping other people. It condemns birthing women to worse outcomes, higher rates of interventions, and worse treatment than they want, expect, and demand. And cases like this happen all over the United States each day, affecting everyone from children to the elderly. Government at all levels controls the options you have access to for urgent care clinics, surgical clinics, hospitals, and other health-care providers.

    So what’s the point? Competition doesn’t just allow for innovation. Competition prevents us from being hemmed in by what other people want for us. It provides us with choices about what happens to the things we hold most dear. Without the diversity of options competition provides, freedom is literally meaningless.

    Pregnant women in Kentucky have been denied the opportunity to make basic decisions about what happens to their bodies. If you think this kind of intervention only applies to pregnant women, you’re wrong. Once you peel back the layers of other kinds of government regulation, you’ll find that the government controls a lot more than you realize about what happens to your body, your livelihood, your family, and your community.

    So let’s stop talking about competition as the thing that provides us with lots of different brands of deodorant. Instead, let’s start talking about competition as perhaps the most necessary component of a free society.

  4. 10 Myths About Government Debt

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    Myth 1 is that the government owes “only” $20 trillion. (In reality, it’s much more.) But luckily, Myth 10 is that there’s no way to fix this problem…

  5. 3 reasons why the NRA is so powerful

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    Why is the National Rifle Association such a powerful organization? The reason is that in politics, small but organized groups win.

    Politics in Washington is about concentrating and focusing power. Large groups have trouble doing that, but small groups focus power very well. The reason is that effective political groups form if individuals think that they benefit by participating. Social scientists call this the free-rider problem.

    Imagine you belong to a club or fraternity. You have a party. People promise to show up the next day to help clean the house. The free-rider problem is that everyone likes having the house cleaned up, regardless of whether they helped clean it. So, who shows up to help clean the house?

    Mancur Olson, the renowned 20th-century economist, identified three factors that will help us predict what happens.

    1. Individual benefits — Not many people enjoy cleaning up the house after a party. Still, in any group, some people always show up for everything. But there aren’t enough of those people to solve the problem.
    2. Group size — If there are only six people in your frat, it’s easier to get help than if there were a hundred. In a large group, everybody thinks, “Let someone else do it. I’ll just sleep.” But if there are only a few members, you know you need to help.
    3. Selective incentives — One word: donuts. Or maybe sausage biscuits. Some reward that only goes to the people that actually show up and work for the group.

    What does this have to do with the NRA? Suppose you’re opposed to guns and favor stricter gun control laws, but you know the individual benefits to any one person from organizing are very small. Further, if stricter laws are passed, all the supporters win, whether they contributed or not. There are thousands and thousands of people who think that way. So, the potential group size is very large, and it’s hard to organize.

    What about selective incentives? Not much hope there, either. If you go to a gun control meeting, all you see is some very earnest people handing out folders and wondering why so few people came to the meeting. Is the NRA different? You bet.

    Gun rights supporters are not a small group, so group size isn’t the reason. But individual benefits are important because NRA members not only like guns but, in many cases, actually own guns. So, they have something personally at stake in the issue.

    Furthermore, if you go to a meeting of pro-gun folks, you’ll get to see … guns! Old guns and rare guns. You can join safety classes and marksmanship classes. Even people who might support gun control would enjoy a gun show.

    These sorts of differences explain a lot about our political system generally. Special interest groups that have focused benefits, relatively small numbers, and the ability to offer selective incentives have disproportionate power.

    The problem is this means government policy may not be guided by what’s best for the public at large. Organized interest groups are able to control a lot of policy making, even if most people in the unorganized public disagree with them. Perhaps that’s a reason to be wary of giving the government certain powers in the first place.


    The article above was adapted from the transcript of a Learn Liberty video featuring Professor Michael Munger, “Why Is The NRA So Powerful?”:

     

     

  6. What politicians really mean when they say they’re pro-business

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    You often hear politicians say that they’re pro-business.

    What do they really mean when they say this? It’s true that more business activity is good for cities and states. It leads to more jobs, more products and services, and to a better standard of living. The problem is there are two very different ways that a politician can try to bring more business to a state.

    Two Approaches to Being Pro-Business

    The first approach treats the economy like a wilderness. A politician acts like a smart forest ranger whose only job is to make sure that nothing impedes the economic freedom and business growth that occurs naturally. Businesses aren’t directed, they aren’t stimulated, and they aren’t suppressed by government intervention.

    However, politicians rarely do this. Instead, they treat the economy like a machine and they think of themselves as machine operators, trying to produce a pro-business environment by pushing buttons and pulling levers. Typically, these are in the form of special subsidies, tax breaks, and incentives for particular industries or firms.

    For example, let’s say your governor wants to encourage auto manufacturers to build factories in your state. He can use the first approach: He can choose to eliminate senseless regulations or reduce burdensome taxes for everyone; create a more open and level playing field. Or he can choose to give special advantages to just one auto manufacturer in the state.

    Five Problems with Government Subsidies and Privileges

    To a lot of people, the second approach makes sense. It creates jobs, right? But there are big problems when politicians try to create jobs through special handouts.

    1. Opportunity cost — where might that money have gone instead? When politicians provide special handouts to a business, the money must come from somewhere. Either everyone else’s taxes must go up, or the amount of money available for public goods, like law enforcement, must go down.
    2. It’s anti-competitive. When one company gets a special privilege, it’s unfair to other companies, such as local small businesses who don’t get the same benefits. This gives the favored companies some measure of monopoly power which can allow them to charge higher prices or offer lower quality services at a detriment of consumers.
    3. When businesses are playing with taxpayer money, they’re more likely to make bad decisions. For example, they might choose to set up shop in a place where it doesn’t make sense economically. With enough subsidies, you could get a business to grow oranges in Alaska. Is that really a good idea?
    4. Subsidies encourage business leaders to focus more time and energy on politics than on their businesses and on customers. This can be enormously costly for a society in the long run.
    5. Ultimately there’s a cultural cost. When politicians cut special deals with favored corporations, it makes people think that the government is only there to serve special interests. How often do you hear people say that they don’t trust the government? And it gives people the impression that success in capitalism is all about whom you know and not what you do.

    Whenever a politician claims to be pro-business, stop to look at what they actually mean by it. Are they proposing to lower barriers for all businesses to make it easier for everyone to succeed, or are they just trying to favor a few firms at the expense of taxpayers, competitors, consumers and the economy at large? The approach makes all the difference.

    Video: What Does a Politician Mean When They Say They’re Pro Business?

    Learn More

    How Cronyism is Hurting the Economy (video): Jason Brennan explains the problems caused by cronyism and how to prevent cronyism.

    Should the Government Subsidize… Silly Walks? (video): Art Carden explains why government subsidies are problematic for the economy.

    “Is Capitalism “Pro-Business?” (video): Steve Horwitz explains why capitalism is good for everyone, not just big business.

  7. Reddit AMA with Professor Ilya Somin of George Mason University

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    Ilya Somin is Professor of Law at George Mason University. His research focuses on constitutional law, property law, and the study of popular political participation and its implications for constitutional democracy.

    Professor Somin has written extensively on constitutional theory, federalism, political ignorance, property rights, immigration, and a wide range of other important policy issues. He is a prolific contributor to the Volokh Conspiracy blog hosted by the Washington Post, and his work has been featured in other major publications such as the Wall Street Journal, New York Times, Los Angeles Times, CNNUSA Today, and Forbes. He’s also the author of several well-received books, including Democracy and Political Ignorance: Why Smaller Government is Smarter (Stanford University Press, Second Edition, 2016), and The Grasping Hand: Kelo v. City of New London and the Limits of Eminent Domain (University of Chicago Press, 2015).

    Fans of Learn Liberty will recognize Professor Somin as the star of our popular video, I Can’t Breathe: How to Reduce Police Brutality, and as a regular contributor to our blog, where he has written about the politics of sci-fi and fantasy series such as Star Wars, Star Trek, and Game of Thrones.

    Mark your calendar for Tuesday, September 19th at 3:00pm ET and join us for a conversation at Reddit.com/r/Politics where you can ask him anything!


    Update: The AMA is now live!