Friday, August 30, 2013

Cafe Hayek: Everyday Millions of Strangers Work for You

            by DON BOUDRAEUX

            I've forgotten where I read the speculation that if Julius Caesar had been resurrected in 1795 and found himself walking with George Washington on the grounds of Mount Vernon and then with Lafayette in France, he would have regarded the late 18th century as reasonably fathomable.  Obviously, he would have noticed changes from his own time – including, of course, the widespread use of gun powder.  But the dominance of agriculture in the late 18th century would have made that era not terribly or radically unfamiliar to Caesar.

            But then transport Caesar, Washington, and Lafayette to modern-day America and imagine their reactions: our world would be nearly unfathomable to all three of them.  Automobiles, jet planes, personal computers, television, space travel, electric lighting, air conditioning, telephony, refrigeration, indoor plumbing even for the poorest, anesthesia, antibiotics.  All new.  All marvelous.

            In short, the differences created in the world over the span of 1,800 years from Caesar to Washington were much smaller than were the difference created over the span of the 200 years from Washington to today.

            One way – there are many ways, of course – to highlight the marvelousness of our age is to note that, unlike for the multitudes of all of our pre-industrial ancestors, nearly everything that an ordinary denizen of our age consumes is something that

            (1) that person did not personally make;

            and, most spectacularly,

            (2) no single person knows how to make – that it, it is something the construction and supply of which require the knowledge, skills, and efforts of literally millions of individuals.

            Millie and Johan living, say, in 1000 A.D. likely grew their own food, produced their own clothing, and built their own hovel.  And if they didn't personally – with their own hands – produce something that they consumed, they personally knew the person, or small group of people, who produced these things for them.  Relatively rare were the consumption items produced through a complex system of economic cooperation by large numbers of people most of whom were strangers to the peasants who consumed the items.

            Not so today.  Nearly everything (and I'm tempted to drop the qualifier "nearly") that an ordinary American or Spaniard or Australian consumes today is an item that is the result, and could only be the result, of the productive actions of millions of people, almost none of whom is known to the persons doing the consumption.

            Look around you.  What do you consume that you make from scratch?  Nothing (or nearly nothing – perhaps you grew the tomato that you'll chop up for your salad this evening [But from where did you get the tomato plant?]).  The clothes on your back, the chair that you're sitting in, the bed that you'll sleep in, the plumbing that helps make your home habitable, the food that you enjoy and the beer or wine that you wash it down with, the aspirin that you'll swallow tomorrow morning because you drank one too many glasses....  Nearly everything that you consume requires, for its production and its availability to you, the efforts of literally millions of people – almost none of whom you know or will ever know.

            And perhaps even more marvelously, all of these things that you consume are affordable.  Even the quotidian pencil required for its production and supply millions of people, almost all of whom are strangers to you – and, don' forget, also strangers to each other.  And yet you can buy a pencil for just a few cents!  (See also here.)

            Ponder this astonishing fact: Each and every thing that we consume today in market societies is something that requires the coordinated efforts of millions of people, yet each of us is able to command possession and use of these things in exchange for only a small fraction of our work time.

            Why aren't more people blown away with the pure splendor and marvelousness of it all?!

Saturday, August 24, 2013

Cafe Hayek: But the Gasoline Back then Did Contain Lead

            by DON BOUDREAUX

Here's a letter to Washington, DC – based WTOP radio:

You report that  "A new Economist poll finds that a majority of Americans yearn for the bubble gum days of the 1950s" (*Which era do you prefer? Poll finds Americans long for the 1950s").

It's hard to believe that these poll results reveal people's informed preferences.  Rather, these results likely reflect nostalgia mixed with misinformation spread by a barrage of news "reports" on the allegedly stagnant – or even deteriorating – economic fortunes of middle-class Americans.

I challenge you and other Americans to do what I did and lay your hands on a Sears catalog from the 1950s.  My catalog – bought recently on eBay (a company founded in 1995) – is from 1956.  Peruse the catalog.  What do you see?  You see, for example, Sears's cheapest TV (black'n'white, of course), priced so that a typical full-time manufacturing worker in 1956 had to toil 61 hours to earn enough money to buy that TV.  Today, the typical American worker can buy an infinitely superior TV with only ten hours of work.  And this lower cost in term of work-time is true for nearly everything else that Sears sells: clothing, kitchen appliances, automobile parts, office furniture, sporting goods, children's toys.  The list is long.*

An even longer list can be made of what you don't see in that catalog or in any other record of the economy's offerings to Americans in the 1950s: no digital cameras; no lightweight waterproof sportswear; no microwave ovens; no CDs, DVDs, or MP3 players; no personal computers; no cellphones; no GPS devices; no indexed mutual funds; no soft contact lenses; no statins; no measles or meningitis vaccines; no portable defibrillators; no oral contraception; no MRI machines.  Commercial jet travel did arrive in 1958 – but at fares well beyond the reach of most Americans.

While today is far from perfect, I'll bet my defined-contribution pension that any American – even any white, male, Christian, heterosexual American – transported from today into the 1950s would struggle to get back to the future with a fervor that would embarrass the 1985 movie character Marty McFly.

Donald J. Boudreaux
Professor of Economics
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA  22030

Thursday, August 22, 2013

Fear Mongering For Liberty

            by KEVIN CZAR

is a natural, necessary animal instinct.  It serves as an indicator, signaling
when we should snap into a state of extreme awareness.  When fear strikes,
time slows.  The state of fear struck me six separate times today.

morning, I was driving to work when an old man drifted his truck into my lane.
 I awoke from my morning haze, slammed the brakes, he returned to his
lane, and I went about my day.  That was the first time, today, that I
felt fear, and it served me well.

            The second
time I had a scare was around noon.  I was reading the words of our
president.  He suggested that college tuition should be more affordable
for working class families.  I agreed, but then he said something
terrifying.  He proposed to fix the problem of high prices by making loans
cheaper.  His plan, in short, was to give student loans to however many
18-year-olds wanted them—at below the market price.

            Oh my goodness, I thought.  The
president of the most powerful country on Earth does not understand a
fundamental economic law.  If he stimulates the amount of college attendees
by essentially handing out money, the colleges will have no incentive to keep
their tuition down.  I was frightened, the commander and chief doesn't get
basic economics, and if he does comprehend it, then he is purposely inflating
the cost of tuition.

            That led
me to my third scare.  I started fretting about the debt crisis—yes, it is
a crisis.  $17 trillion in the hole?  $50,000 per citizen?  $150,000
for every tax payer?  My children and grandchildren should not be laboring
to pay off debt they did not induce.

fourth time I felt fear, I got to thinking about my future.  After all, it
is uncertain, and mostly all decisions are inherently risks.  However, I
quickly remember I'm an individual in charge of my time, and there is peace in
that sense of control.

        The fifth time I felt fear
was around dinner time.  A stranger knocked aggressively at my door.
 I wasn't expecting anyone, but the knocks kept coming—again and again.
 I wondered if it was someone trying to cause trouble, so just in case, I
grabbed my weapon and hid it in my pocket.  Fear passed as I felt the
comfort of control.

        I asked who it was, and a
deep voice replied.  It was my neighbor, Stew.  Stew is a socially
awkward, seven foot former basketball player.  He was asking if I could
move my car to create space for a visitor of his.  I did so, and we went about our way.

        The last time I felt fear
was late at night.  My mind hung on the fact that most of today's politicians
do not obey the free market principles cherished by our founding fathers.
 I mean, think about it: Price fixing and indebting!  Forget the
economics for a moment—intuitively that is wrong.  That is un-American.
 We didn't sign up for this.

        The fear filled my veins as
I wondered if I was doing enough to protect my life, liberty and property as
the US Constitution was designed to help defend.  Adrenaline rushed as I
concluded, I wasn't doing enough.  George Washington and Thomas Jefferson
would be ashamed of me.  The fear of falling short was present, and it
signaled more awareness.

       My response was this.
 In hopes of connecting with someone who was also concerned, in hopes of
even making someone concerned who has until now been indifferent, I picked up a
pen and wrote these words.

Tuesday, August 20, 2013

Are You Dangerous?


FTCN sends thoughts and prayers to the Frezza family... "Menckenism: My Father" A Eulogy To A Good Man From The Greatest Generation"

            by BILL FREZZA

Summing up my father's life, I keep coming back to one thought. Never will you meet a man who more faithfully lived his values.

My father was a teacher of all things. His method was simple. He taught by example. At any age, when faced with an ethical dilemma, after reflection, study, or even rationalization, I find myself coming back to one simple question. What would Dad do? His character is the foundation of my conscience.

My father's teachings are endless. Let me share a few.

My father was strong in body, in spirit, and in commitment. He never missed a single day of class from kindergarten through high school graduation, his perfect attendance award being the one honor he remembers receiving as a child.

My father never let another man down. He fulfilled every obligation he ever undertook. His word was his bond, and everyone knew it. I never heard him utter a lie, nor intentionally deceive.

My father was self-made and self-reliant. From his education to his career, from his skill with every kind of tool that could fashion wood or metal, brick or cement, my Dad engaged with the world as a man who would be its master.

My father was proud to be an engineer. In his office, on the wall next to the shop production schedule and the tool and die calendars, was a framed quote from Herbert Hoover praising the virtues of the engineer. That quote hangs on my wall today. I imagine it will one day hang on the wall of my son Brian, who carries the engineer's spirit into the world of science.

My father relished the good things in life including art and music, travel and photography, food and wine, and friends and family. While he never cultivated the intense relationship of a best buddy, or hunt or fish or play poker with the boys, the number of people who called my Dad friend was legion.

My father never made an enemy. Not one. While he most surely came across a few people he couldn't countenance, he solved the problem by simply avoiding them. He always insisted that violence never solved any problem. He never once hit another man in anger.

My father was loyal. His faithfulness to the important people in his life could be seen in the way he steadfastly maintained ties with his childhood friends. From the streets of Manhattan in the ethnic ghetto where they grew up through the weddings, christenings, holidays, and now wakes and funerals that mark the arc of life, my Dad could always be counted on to be there.

My father was never stingy. Though he was a child of the depression who understood the value of a dollar and the importance of saving, the generosity he expressed with his money matched his generosity of spirit.

My father loved his martinis, teaching me to mix them for him when I was 12 years old. Yet I've never seen him visibly drunk, nor did he ever let strong drink cause him embarrassment, nor did he ever once get behind the wheel impaired. Moderation was his byword in all things.

My father was responsible to the very end. How many elderly people do you know who put down their car keys and voluntarily announce that they are no longer fit to drive?

My father loved a good joke, including every imaginable kind of ethnic joke. Yet his humor was never mean spirited, nor designed to hurt or humiliate. I never once heard him utter a racial slur, nor did he ever treat anyone of any station with anything other than respect and kindness.

My father spoke openly of his admiration for the female figure, yet as far as I know he never kissed another woman besides my mother. And he loved my mother with every bone in his body, his visible affection overcoming his usual reserve. Dad's unflagging support for Mom's personal development in her career and in life created the perfect balance creating a childhood for me and my sister that today seems like a lost American dream.

My father provided a home for his widowed mother from the time he and Mom were newlyweds, letting grandma build a second life filled with the joy of her grandchildren. While Mom carried the burden of sharing a roof with her mother-in-law, Dad did his best to foster domestic tranquility.

My father took in his in-laws when they became old and infirm, taking his turn changing his father-in-law's diapers. He and Mom took in his elderly sister when she neared the end. And responsible man that he was, as Dad faced imminent infirmity he made sure that he and Mom were well situated so that when he was gone she would be well cared for in a community of their choosing.

Only twice did I ever see my father cry. The first time was in November 1963 when president Kennedy was shot. The second was in December 2001 when my son, his grandson and namesake, was taken from us shortly before his 22nd birthday. And while I knew Dad was as torn up inside as I was, his crying ceased long before mine did. Because he knew it was his job to be the rock for me to lean on.

My father had a quiet dignity, respecting himself the way he respected others. As he faced his final days, his body ravaged with the cancer that ate his bones, he occasionally lost his good humor. But he never had one moment of self-pity. The day before he passed when the hospice nurse asked him how he was doing, he gave the same answer he gave every day. I'm fine.

My father gave me a parting gift. He waited for me before he passed, to be sure his son would be there to comfort his beloved wife when his time came. The last words I was blessed to be able to share with him as I caressed his withered brow the night before he died were the same words we said to each other every night for the past year when we finished our daily phone call. I love you.

Farewell, Pop. You did good. You did real good.

Monday, August 19, 2013

Cafe Hayek: Quotation of the Day

            by DON BOUDREAUX

   from page 2 of Rose George's 2013 Ninety Percent of Everything: Inside Shipping, The Invisible Industry That Puts Clothes On Your Back, Gas In Your Car, and Food On Your Plate:

But who looks behind a television now and sees the ship that brought it?  Who cares about the man who steered your breakfast cereal through winter storms?  How ironic that the more ships have grown in size, the less space they now take up in our imagination.

            It is one of the most historically unique and amazing features of life in modern market economies: almost everything that each of us daily consumes – stuff mundane to us, such as toothpaste, laundry detergent, underwear, houses with solid floors, walls, and roofs, motor transportation, blueberries and pineapple year-round in Boston and Berlin – is stuff that no one person knows how to make.  It's not just that you didn't make and don't know how to make, say, the drip-coffee maker that you used this morning to brew your cup of coffee.  No one knows how to make that coffee maker.  And nor is all of the knowledge necessary to make that coffee maker, and to get it at reasonably cost into your kitchen, available in any one place or to any one self-consciously cooperating group of minds.

Of course, there is an organization of people – working, say, for a company called Krups – in which there exists the knowledge of how to assemble various component parts – wires, metal, glass carafes, heating elements, and so on – into a coffee maker.  But Krups (as is the case with the likes of Braun, and Cuisinart, and Black & Decker) only does the final assembly (and, perhaps, had a creative idea or two for just how to assemble component parts together into an unusually good coffee maker).  But tap into all of the knowledge in all of the brains of all of the people who have ever worked for Krups and you'll not get one one-billionth of all the knowledge that is necessary to transforms all of the materials that are in' your coffee maker from their raw stage and into the machine that now sits patiently on your kitchen counter, ready to allow you to brew more delicious coffee within minutes, with no sweat or danger, and with just a few small and minor muscle movements on your part.

Milton Friedman on Regulations and Consumers


Saturday, August 17, 2013

FEE: Information Ages: Knowledge, Survival, and Progress

            by RICHARD FULMER           

            Our era is often called the "Information Age," yet humanity has only survived this long because of our ability to use information. We do not have the sharp teeth and claws, tough hides, or thick fur needed to adapt to our environment; we survive by adapting our environment to ourselves. That can be done only by accumulating knowledge about our world and putting it to practical use.

            By and large, this means communicating with others in order to enable cooperation and coordination. Information in isolation dies with its possessor. When shared—particularly via some sort (or several sorts) of language—it greatly enhances not only mankind's chances of survival but also of progressing far beyond mere survival to thriving. The more effective and efficient the methods of communication, the greater the progress.

            In Genesis we read of Adam naming the earth's birds and beasts; it's presumptuous, this idea that, by stringing meaningless sounds together and declaring that such a string signifies a particular animal, we somehow know something about it because we know its "name." Yet this absurdity lies at the root of all human knowledge and invention. By assigning names to things we can share information about them with each other.

Not only is the spoken word the greatest human invention, but most other world-changing inventions—everything from mathematics to printing—are also information-based or deal with its generation, transmission, or storage.

Without such information-based constructs no other inventions would be possible, for none of the things with which Nature surrounds us become resources in any meaningful sense without information. A rock is simply a rock until someone thinks to use it as a hammer; oil is just foul smelling goo until we learn that it can serve as fuel; sand is no more than something to walk upon until we discover that it can be turned into glass and microchips, which require complicated processes. With the exception of the rock, perhaps, not one of these discoveries was the product of a single genius. Rather, each was the product of countless individuals working at different times and places. Each evolved in fits and starts, "the result," as Scottish philosopher Adam Ferguson observed, "of human action, but not the execution of any human design."

Money and Markets

No list of information-based tools is complete without two other products of "spontaneous order":  markets and money. While these may be surprising additions, together, they form the most powerful knowledge-generating dynamic the world has known. Market prices reflect globally dispersed, deep knowledge. They convey the information, some of which cannot even be articulated, that allows people to determine the value of what they create in relation to other products and to compare that value of their goods with that of other possible uses for the resources needed to make them.

"I, Pencil," Leonard Reed's seminal essay, vividly illustrates the seemingly miraculous way in which market prices coordinate the activities of hundreds of thousands of people around the world to create a seemingly trivial object. He explains how no one person knows how to make a pencil from —yet millions of pencils are made every day through the cooperation of countless people who have never met; some of whom may never have even seen a pencil.

All the information needed for this miracle of cooperation is gathered and transmitted through market prices, which economize on the information people need. Information is costly to obtain, after all. Consider changes in supply and demand. No one in the factory needs to know that six years ago a baby boom occurred and demand for pencils in elementary schools has now increased. All they need know is that more people are willing to buy their product. The same goes for anyone at any point in the process. All that suppliers of any pencil component have to know is the price they must pay for their materials and the price they can obtain for their products. They need not know the reasons for those prices—indeed those reasons may be unknowable even in hindsight.

Market prices are not just a convenience, they are essential. Without them, we have no way of learning whether our products are worth more than the resources needed to make them. Knowing the relative value of input and output is vital not only for an economy, but for life itself. To live, each of us must consume more calories than we burn in gathering, preparing, eating, and digesting those calories. In short, we must make a net energy profit or we will die. Fortunately, we have a built-in alarm system called "hunger" that warns us when we have not eaten enough.

Similarly, if an oil company's efforts are to have any value, it must produce more energy in the form of oil than it takes to discover, extract, transport, and refine it. Because a company is not a single organism, however, it has no built-in warning system to tell it whether to abandon a marginal oil well or to complete and produce it. But even if a task as monumental as adding up all the energy involved in every aspect of the company's operationsoperationsthen comparing that to the energy it expects to produceoperationswas feasible, knowing that producing a particular well will result in a net energy profit is not enough. For instance, will pumping out all the oil a well is capable of producing make us better off or just leave us with a storage problem? The energy balance doesn't tell the company what the demand for its product is. Nor does it tell the company whether it is better off investing its resources in a particular well or using them for some other purpose.


Prices provide all of that information and moreoperationsbut only if those prices are generated by markets free from significant distortions.

Every action by government distorts market information to some degree, if for no other reason than its activities must be financed by the productivity of its citizens. Taxes and tariffs necessarily affect the prices of goods on which they are levied. Wage and price controls obviously distort market-generated informationoperationsleading to artificial surpluses or unemployment if prices or wages are set too high and shortages if they are set too lowoperationsbut the impacts of most government actions are far subtler.

Consider, for example, the effects of a central bank's control over its nation's money supply. Rather than simply printing more money, central banks usually attempt to increase liquidity by driving interest rates down. In this country, the Federal Reserve (the "Fed") does this by such actions as reducing the discount and the banking reserve rates, buying government notes from the Treasury Department, and buying securities from banks.

As interest rates (the "price" of money) drop, the returns on bank deposits fall, so people tend to save less and consume more. At the same time, despite fewer savings, credit expands and interest-sensitive industries such as home building and car manufacturing expand along with it. Prices are driven up as consumers vie with industry for scarce resources. Eventually, long-term projects that had appeared profitable when costs were artificially low are revealed to be bad investments.

It is significant that new money flows to some parts of the economy before others, raising prices in those areas relative to others. Because prices do not rise uniformly, an economy's network of interrelated prices is distorted, reducing the market's ability to accurately reflect relative values between dissimilar goods. One result is that producers may overbuild, creating goods that are actually worth less than the resources used to create them. This was typical during the housing boom when homes were built never to be lived inoperationsserving only as investment vehicles for speculators who bought them just to "flip" them to the next speculator in line.

Business subsidies also distort prices. For example, only government largess keeps the price of electricity produced from wind turbines and solar panels competitive with that generated from conventional sources such as natural gas. Because of the subsidies we don't know whether "green" utilities are making a net monetary profit. And because we don't know that, we don't know whether they are making a net energy profit; only free-market pricing can ensure that the energy cost of everything that goes into producing a good or service is taken into account. By the same token, we do not know whether subsidized biofuels such as ethanol contain more energy than is used to produce them. Estimates range from a 30 percent loss to a 30 percent gain, but, in the end, they remain only estimates.


More often than not, government initiatives feature broken or distorted feedback loops. Without the possibility of profit or loss, the costs and benefits of government actions may be impossible to determine. Moreover, in a complex economy, myriad changes happen continuously, so the link between government-driven causes and their market effects may be lost as well. With the quantity and quality of their output difficult or impossible to measure, government agencies are left with measuring input as a gauge of their impact. This means that agencies have little incentive to actually solve problems. If the Department for Solving Problem X" actually solves problem X, it eliminates its own reason for existence. On the other hand, should its actions prove ineffective or even counterproductive, the most likely consequence is that the agency's funding will be increased.

The underlying problem with government action in general it that it disrupts the information feedback loops upon which survival and progress depend. The unique capacity that people operating in free markets have for self-correction is lost when these feedback loops are skewed or broken. When consequences are no longer based on cause and effect, but are driven instead by the political decisions of faraway bureaucrats unfamiliar with local conditions, we are left to stumble blindly in a world gone dark.

We are information-based life forms whose survival and progress depend upon the subtle feedback loops that originated in language. We have prospered throughout all of our "information ages," but we cannot progress, nor perhaps even survive, in an age of disinformation.

Read more:

Tuesday, August 13, 2013

FEE: What Doesn't Kill You

            by JEFFREY A. TUCKER

            I'm so proud of Rebecca Black I can hardly stand it.

            She is among a growing number of young people who have become YouTube stars completely on their own. They have made use of user-controlled technology—from their own cameras to your eyes and ears—to cultivate fans all over the world. This trend has allowed ordinary individuals to bypass the once-entrenched elites in the entertainment world and is flourishing under a system of peer-to-peer sharing. A major beneficiary of this technology, and only 16 years old, Black has a wonderful career ahead of her if she wants it. And she does.

But it took more than the market and the technology to make her musical entrepreneurship work. It also took daring, persistence, and a level of courage in the face of intense stress that would have crushed most others. Her story is worth looking at for what it teaches about how to deal with criticism, derision, doubts, and press frenzies. She learned how to turn a seeming defeat into a magnificent triumph. And it all happened at an age that people these days consider to be too young to be gainfully employed or otherwise be rational. Actually, she handled the whole thing better than most adults would or could have.


Black's public story really begins when she was 13. A friend of hers had done a music video that she had shared with friends and family, all produced by a company called Ark Music Factory that specializes in these vanity productions. Rebecca asked her mother if she could do the same. Her mother was happy to finance this idea because it was dream that Rebecca had since she was very young. She knew Rebecca had talent. Also, Rebecca had been through a rather challenging time in life, having endured her parents— difficult divorce and having moved from school to school and faced the usual upheaval that accompanies such childhood traumas.

Rebecca was excited mostly because she hoped to have a fun video to send to her grandmother and share with some of her new friends at the middle school she was attending. The company wrote the song, recorded Black's performance, and filmed the video. The result was "Friday"—yes the notorious video that gained vast global attention in the spring of 2011. It went online on YouTube on February 10, 2011.

Nothing much happened for the first month. Rebecca was actually amazed when it racked up 1,000 views. But then it was linked and promoted by some prominent bloggers—and not with the goal of showing how great the video was. The motivation was the opposite: cruel ridicule.

It was at this point that the video took off, racking up tens of thousands of views by the day. By the end of a few tumultuous months, the video had received four million hits. Among them, a half million people liked it (I among them). That's a tremendous thing by any standard. But of course what stood out was the frightening fact that 3.5 million viewers disliked the video. It still holds the world record for the most disliked video. That's not a record anyone wants to hold.

The Mob

It was a classic case of mob behavior. The link was shared and shared and always with a message along the lines of: this is the worst video of the worst song you have ever heard. The comments under the video revealed all. ""I hope you go cut yourself and die." "I hope you cut yourself and get an eating disorder so you'll look pretty." Most of them are essentially unprintable, nearly all with the same message of ridicule. For a few months, Rebecca seemed like the great laughing stock of all the world's teens and 20-somethings.

These comments were a wild overreaction and obviously so. In fact, the video was something of a guilty pleasure, and the hysterical opposition to it suggested jealousy as much as dislike.

Actually, the video has a strong narrative. It tells the story of a girl who gets up on Friday morning to go to school on the bus, but instead hops into a convertible and goes driving with her friends. Truancy maybe? Late that night, the party begins. She is seen hanging out and smiling with all her friends and generally enjoying life.

As I wrote at the time, the entire video might be seen as an allegory for the escape from the prison-like environment of public schooling and the fulfillment of the dream of exercising free choice and free will—a dream that is far distant in the minds of today's teens who are not allowed to work, who face restricted play, and who are forced under the threat of prosecution to show up and obey Monday through Friday. Therefore, "Friday" in this video becomes the slogan for the hope of liberation.

Also, the music was not nearly as bad as everyone was saying at the time. It is actually quite clever and featured some interesting wordplay that goes beyond the usual bubblegum pop. It was well performed, too, given that she was only about to turn 14 years old.

Nonetheless, Rebecca's throngs of detractors did not see it that way. She was jeered and mocked everywhere online. She received death threats through email and even on her home phone.

She graciously accepted invitations to be on national talk shows, but during many of them, the interviewer questioned whether she could really sing at all. Maybe the whole video was autotuned to the point that it disguised a complete lack of talent? Maybe this company called Ark Music Factory is so cynical that it will make anyone appear to be a star?

Rebecca put on a good face, especially for a young girl staring at bright lights and cameras and a national audience for the first time. Inside, however, as Rebecca tells the story, she was absolutely devastated. Her life was in a state of complete meltdown. What she had done as a fun experiment with her friends and a sweet gift to her grandmother turned into a global fest of derision.

How can this happen? Why did it happen? How can she reverse history?

After some weeks, she pulled the video down—and this decision seemed like a bow to defeat at the hands of the Internet lynch mob. In public, the given reason was a copyright dispute. But privately, she had to feel a sense of relief. No more hate. No more derision. No more sleepless nights of feeling inadequate.

But that attitude didn't last long. She made the very hard decision to press on and use her strange fame to her advantage. The video went back up on her own channel and today has 56 million views.


She had to keep going in order to overcome her detractors, but it turns out that this was something she had learned to do long ago. "From kindergarten, I was bullied," she says. "There were just mean girls in my class. I'm not the type of girl that does everything to fit in. I like being different. I like dressing in bright colors. I guess I was an easy target. But my mom told me to just block them out and don't let them get to me and that's what I did. And that's what I do now. I have a thick skin. Now, I just laugh at it. I mean, they spend their day commenting on a 13-year-old girl's song, but at least I'm out there actually following my dreams and doing something."

And that is exactly what happened. It turned out that "Friday" had become a huge part of pop culture, the song everyone loved to hate so much that everyone loved it. The song ended up selling very well on iTunes. It was sung by Justin Bieber. It was performed on the television show "Glee."| It was covered by star Katy Perry in concert, and on Jimmy Fallon's television show with Stephen Colbert and Taylor Hicks.

Even now, if you type in the word "Friday" on Google, her video is the first link. That is amazing triumph: in effect, she is the owner of the name of a day of the week. What other pop star can boast such an achievement?

Her current agent quotes her as follows: "I'm not going to be just a one hit wonder. This is what I have wanted to do all my life and what I plan to do for my future. I'm determined and I don't think people realize how hard I've worked for all of this to happen. I'm not going to let the haters stop me. I want to show everyone, I'm serious."

All indications are that she is in high demand as a performer, not on her own concert tour ... not just yet ... but at special events. She has 331,000 subscribers on her YouTube channel, and she is coming out with new videos all the time—reaching her growing fan base directly, not through gatekeepers but from her house directly to yours. She has even done a "Draw My Life" video in which she recounts her story. It already has 864,509 views.

We Can't Stop

I'm recalling all of this because I just watched a video in which she and another YouTube star sing a cover version of Miley Cyrus's "We Can't Stop." The original video version is lurid and essentially horrifying (in my view) and a depressing look at what became of child star Hannah Montana. The remix by Rebecca Black is nothing short of wonderful, even a revelation. It is sung with grace and charm, and the kind of technical stability that only comes with intense work and endless hours of practice.  

She even changed the words to reflect her continuing theme of liberation, sans the tawdry lyrics. Here we even have a tribute to property rights as an essential guardian of freedom. "This is our house, these are our rules, and we can't stop. We won't stop ... We run things, things don't run we ... this is our party, we can do what we want."

Right now, this video is approaching 1.1 million views. The first comment up there as I write is very touching and true: "We were wrong about her. WE WERE!!!!"

As some people recognized from the beginning, Rebecca Black has real talent. She is a hard worker. She wants to succeed. She is blessed to be performing in a time of fantastic technological innovation.

And yet that alone is never enough for grand achievement. There is an additional element of strong character necessary to persevere even in the face of a torrent of criticism. She saw the fickleness of the mob for what it is and somehow knew that she could use the notoriety to achieve something wonderful. And, sure enough, today the critics are not entirely silent, but they have quieted down, and her presence in the pop-music scene is growing.

What It Takes

This evidence of strong character she shares with great entrepreneurs from history. None have had an easy time of it, certainly not in the early stages. It's easy to dream of what could be. Persisting in that dream even in the face of every conceivable indication of failure is the real test, and it is a test that can't be passed with talent and dreams alone. It takes courage, emotional and mental stability, and implacable determination.

Every startup these days faces the long, dry, hot desert that extends from release all the way to profitability. The difference between those startups that are forgotten and those that make a dent in the universe comes down to the ability to cross that desert despite everything. The main players must toss off fatigue, confusion, and uncertainty and see them all as the price that must be paid to reach the Promised Land.

Rebecca Black, now only 16, discovered this great truth that brilliant entrepreneurs in every age have discovered. There is always an opportunity to make a difference and change the world. But doing so often means having to overcome seemingly insurmountable obstacles, whether natural, economic, political, or legal.

The path is never cleared for you. You have to clear it yourself. You have to see a vivid picture of a bright future even when everyone else is certain that your ideas are crazy, hopeless, pointless, and doomed to certain failure. The voices of the detractors fade, and, in the end, it's the voices of success that sing the song of history.

Friedman on the Importance of 'Gambling'


Wednesday, August 7, 2013

FEE: Quarterly Letter from the President—June 2013

            by LAWRENCE REED

            Dear Friends of FEE:

            Since my last update in March, the progress, improvements and new initiatives at FEE have been picking up steam.

            We've just launched our new Blinking Light Project in an effort to re-establish the vital link between personal character and a free society. I hope you will go to the website, read and watch all the materials we've housed there, and order a copy of the movie Amazing Grace for your home, school or local community. This is a wonderful film with a deep message of courage, responsibility and the power of a small group of people.

On the development front, we ended our fiscal year on March 31 showing a 23 percent increase in contributions over the previous year. Thanks to our supporters for this resounding vote of confidence! It will make possible many good things in coming months—most immediately, a huge increase in our high school and college summer seminar attendance. We're expecting about 800 students at ten FEE seminars starting this month in Arizona, Washington, Missouri, Georgia and South Carolina. Applications exceeded our budget and room capacity by more than 400.

While these record numbers are terrific, we don't judge our success solely by how many people come to our events or how much paper we push out the door. We want to inspire and educate, and then engageconnect and activate.  In later updates this year, we'll tell you more about what many of the summer seminar students intend to do with what they've learned and how we'll help them accomplish that.

For the moment, however, let me tell you about one FEE seminar alum and his recent achievement. His name is David Ryland Beard. He first attended an evening FEE program as a high school sophomore in his hometown in North Carolina, then came to a summer seminar we sponsored in Colorado in 2011. He describes these events as "life-changing." He started writing and even producing his own short videos on free market economics. Last summer he interned with FEE before entering North Carolina State University. This past April, he won the $1,000 BB&T Essay Award from the Economics Department—in his freshman year, no less! David stays in touch and I've told him many times that people should get his autograph now while they can afford it. He will make a name for himself and persuade many people of the merits of liberty in coming decades—and we'll be able to proudly say he got his start with FEE!

That's David in the adjacent picture—taking time out to go ziplining last summer not far from my house in Newnan, Georgia.

In the fiscal year that ended in March, page views and visitors to our web site,, were up 19 percent and 41 percent, respectively. We added more than 100 different modules to the web site, allowing us to deliver content to teachers and students in bite-sized, digestible pieces. Our Facebook reach rose by 162 percent. We scored a new record of 19,600 average monthly views of FEE videos on YouTube. Our one-hour, online webinars at least at least one every month now at least generated several thousand registrations. Subscriptions to our free "In Brief" e-mail service soared 81 percent and most of that growth occurred since our new editor, Max Borders, began making notable improvements to our magazine, The Freeman, late last fall.

Our headquarters is still at our ancestral location in Irvington, New York, but most staff are now in Atlanta, Georgia. Either late this year or early next, we expect to complete our move, cut our operating costs substantially, and relocate to a new headquarters site in mid-town Atlanta. We'll miss Irvington but we're moving for the same reason most people eventually move from where they were born: Lower costs and new opportunities, which mean we can reach more people with our message. The "new" FEE means more programs, publications, impact, and outreach—all without changing our principles one iota.

Thanks for partnering with us. We're growing in every way but none of that progress would be possible without your help!

Read more:

Tuesday, August 6, 2013

Thoreau on Price


Cafe Hayek: F.A. Hayek vs. Milton Friedman on Macroeconomic Theory

            by DON BOUDREAUX

            I thought that I'd posted a while back this video of an interview with Hayek on Friedman.  Looking through the Cafe's archives, however, I cannot find it.  So I post this video, finally, here.  (I was reminded of its existence by Bob Murphy.)  Cafe patrons know that there are few scholars whom I respect as much as I respect Milton Friedman, but I believe that Friedman was a less-insightful money- and macro-theorist than was Hayek.

Saturday, August 3, 2013

Menckenism: The Founders' Greatest Fears About Democracy Are Playing Out

            by BILL FREZZA

            Our Founders' greatest fear that pure democracy would inevitably destroy itself is being played out in two distinct dramas, both headed toward the same ending.

            Detroit's bankruptcy bears witness to destruction by one-party rule. Decades of unchecked corruption and incompetent governance have come to a head, as the accumulated debts of a government willing to buy votes from the non-productive at the expense of the productive fall upon a dwindling populace too poor, dependent, or stubborn to flee.

            Washington's terminal gridlock bears witness to destruction by a dysfunctional, self-serving duopoly. Politicians representing two supposedly hostile parties fight over the frozen controls on a runaway train, even as they remain safely ensconced in gerrymandered districts. With massive entitlement spending growing on autopilot, the only thing forestalling federal bankruptcy is unlimited money —which will only make the day of reckoning all the more painful when it arrives.

            Both tragedies are enabled by a global financial system that insists on feeding vast sums of capital into the maw of sovereign debtors under the false belief that such debts are "safe." Yet, the only thing sustaining the belief that these debts will be repaid is the self-deluded notion that future taxpayers will make good on them—somehow.

            How is that working out for the bondholders of Detroit or Greece? Where are the taxpayers that are supposed to come to their rescue? Why does anyone believe the outcome will be any different in Spain, Italy, Portugal, France, and ultimately the United States? While sophisticated investors believe they can insure themselves against losses by buying Credit Default Swaps and other exotic instruments, how will they be paid when trillions in capital that could have been invested in productive enterprises have already been destroyed?

            Yet in Detroit the beat goes on. Michigan Attorney General Bill Schuette believes he can magically protect the bloated pension and medical benefits of retired Detroit public service employees by invoking the state constitution. If he prevails, who will foot the bill? Where will the remaining 190,000 privately employed taxpayers left in Detroit find $19 billion to pay the city's creditors? And what fool would lend to Detroit, or other similarly indebted municipalities, if its current bondholders get wiped out in favor of pensioners? What profitable activity will generate the returns to repay any new loans? No one can answer.

            The same willful denial prevails in Washington. President Obama speechifies that a moribund economy can be restored by building more roads, bridges, and windmills. Paid for by whom with money that could have otherwise been used forwhat?

            Republicans seem to believe that they can avert fiscal catastrophe by marginally slowing the rate of growth in federal spending while protecting their favored constituents from cuts. They call this fiscal rectitude. Who are they trying to kid?

            Only profitable businesses can turn today's capital into tomorrow's wealth, by supplying willing customers with products and services they can sell for more than they cost to create.

            Defenders of big government claim that its manifold agencies produce many benefits, such as ensuring that our air and water remain clean, our workplaces are fair and safe, our poor are fed, our elderly receive medical care, and our college students are showered with loans. Lovely. How do these "investments" generate cash to repay maturing government bonds? Governments do not produce wealth, they only consume it. How can consumption turn today's capital into future wealth needed to pay back all those loans? No one can answer.

            Are government-sponsored entities like the Post Office, Fannie Mae , Amtrak, and national flood and farm insurance programs supposed to make up the slack? Have you ever seen any such government programs generate sustainable profits rather than losses?

            As long as government power remains unchecked, allowing politicians to eat our seed corn while suppressing private sector growth, it matters little whether this happens under one-party rule or a dysfunctional duopoly.

            Only a resurgence of America's productive private sector delivering a sustained economic growth rate of at least 6 percent offers any hope for the future. And only a massive reduction in city, state, and federal government spending can stop us from digging the debt hole more quickly than we can climb out of it.

            Does 6% sound like an impossible rate of growth for a developed economy? Why, when President Clinton delivered as much working with a Republican Congress and Ronald Reagan did even better working with a Democratic Congress. Ponder that as Detroit stares into the abyss.

Friday, August 2, 2013

David Friedman featured in Free To Choose 1990


FEE: Thoughts on Work and on Working

            by SARAH SKWIRE

            I had the chance recently to talk about work with a group of students at a summer seminar sponsored by the Institute for Humane Studies. What follows is part of what I told them.

            Work—all kinds of it, at home, at the office, on farms and in factories, all the way up and down the pay scale—is the engine that drives the free market. If we love markets, and I do, and we love the liberty that the market enables, we have to be willing to tangle with the challenges of talking seriously about all kinds of work.

            The economist Dierdre McCloskey says the way that we as a culture talk about things like work and business and money changes how we feel about them. She says, in fact, that the biggest push to bring us into the modern world was a change in the way we spoke and wrote about work and business. That means that what we say when we talk about work matters. It matters if we think and say that work makes you "a slave to the man" or "a cog in the corporate machinery." It matters that we think and say work is degrading. Or fulfilling. Or creative. Or deadening. It matters that I just called it the engine that drives the free market.

            I think that right now we're having a long-term human crisis about work and what it means—and that means we have an opportunity, a really important one, to have a discussion about work that is clear-eyed about its problems, but also optimistic about its possibilities. In his book Persons, Rights, and the Moral Community, the philosopher Loren Lomasky tells us that people are pursuers of projects. We like to be doing. More than that, Lomasky tells us that it is a good and moral thing to be a pursuer of projects, because, since we value our projects, it confirms for us that we have worth and value. And it confirms for us, by extension, that other people who pursue their own projects have worth and value as well. We need a way to talk about work that allows us to bring in Lomasky's respect for the projects of others as well as respect for our own projects.

            To think about better ways to talk about work, it helps to talk to a lot of people about their jobs and to listen to what they tell you. This was the project of the Pulitzer-winning journalist Studs Terkel in his book Working. The book, which is a series of interviews with people about their work, reminds us that the working world is full of people exploring and engaging and developing their capacities in all kinds of ways. Terkel's masterful use of the interview form, of oral history, of capturing the voices and experiences of a whole range of working people makes Working the kind of book that rewards both casual scattershot readers and those who are determined to plow straight through it.

            Working is full of useful and educational surprises for those of us who might be inclined to think that salary and prestige are what it takes to create satisfying work. Most of us, for example, would probably assume that working on an assembly line is dull. Wheeler Stanley, who worked on auto assembly lines before being promoted to foreman, begs to differ. "I could stand back, look at a job and I could do it. My mind would just click." I enjoyed the work. I felt it was a man's job. You can do something with your hands "[It was] far from boring. There was a couple of us that we were hired together. We'd come up with different games—like we'd take the numbers of the jeeps that went by. That guy loses, he buys coffee."

            There's Babe Secoli, the grocery store checkout clerk whose pride and satisfaction in her expertise shines through in her words, "There are items I never heard of we have here. I know the prices of every one. Sometimes the boss asks me and I get a kick out of it. On the register is a list of some prices. That's for the part time girls. I never look at it.— I don't have to look at the keys on my register.— My hand fits

            And then there's Elmer Ruiz, reminding us that —not anybody can be a gravedigger. You can dig a hole any way they come. A gravedigger, you have to make a neat job. I had a fella once, he wanted to see a grave. He was a fella that digged sewers. He was impressed when he seen me diggin this grave"how square and how perfect it was. A human body is goin' into this grave. That's why you need skill."

            These workers, talking about jobs that many would classify as menial, or blue collar, or simply —awful,— talk about expertise, creativity, and pride. So if I were going pick a place to start changing the way we talk about work. I'd like to see us begin to acknowledge that instead of being a kind of paid slavery, work "even work we can't imagine wanting to do"can be a source of pride and of pleasure.