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 	   	  		<h2 class="pagetitle">Archive for May, 2010</h2>
 	  

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				<div class="post-1515 post type-post status-publish format-standard hentry category-featurednews-exclusives">
				<h3 id="post-1515"><a href="http://www.gcnlive.com/wp/2010/05/28/the-secret-to-personal-energy-independence/" rel="bookmark" title="Permanent Link to The Secret to Personal Energy Independence">The Secret to Personal Energy Independence</a></h3>
				<small>Friday, May 28th, 2010</small>

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					<p><span class='st_facebook_large' st_title='The Secret to Personal Energy Independence' st_url='http://www.gcnlive.com/wp/2010/05/28/the-secret-to-personal-energy-independence/' displayText='share'></span><span class='st_twitter_large' st_title='The Secret to Personal Energy Independence' st_url='http://www.gcnlive.com/wp/2010/05/28/the-secret-to-personal-energy-independence/' displayText='share'></span><span class='st_email_large' st_title='The Secret to Personal Energy Independence' st_url='http://www.gcnlive.com/wp/2010/05/28/the-secret-to-personal-energy-independence/' displayText='share'></span><span class='st_sharethis_large' st_title='The Secret to Personal Energy Independence' st_url='http://www.gcnlive.com/wp/2010/05/28/the-secret-to-personal-energy-independence/' displayText='share'></span></p><p>Americans are dependent on the government in more ways than they can count nowadays. Even those who are taking steps to get off the grid are realizing that our two most basic needs, clean potable drinking water and electricity, come to us through government-controlled grids.</p>
<p>As fear of the impending economic collapse continues to grow, there is a new solar backup generator whose popularity is growing commensurately. Scientists say it’s the first real “off-the-grid” breakthrough in 50 years.</p>
<p><a href="http://itunes.apple.com/us/app/gcn-live/id366565184?mt=8"><img src="http://www.gcnlive.com/assets/stage/iPhoneApp_Med.gif" alt="GCN iPhone app" /></a></p>
<p>Blackouts and rolling brownouts are becoming common in many parts of the United States. As corrupt politicians herd the citizenry off into third-world status, people are getting fed up. Off-the-grid living appears to be the only solution to the intrusions and failures of an out-of-control government.</p>
<p>Get more information in the video below or by <a href="http://www.mysolarbackup.com/">clicking here</a>.</p>
<p><object width="425" height="344"><param name="movie" value="http://www.youtube-nocookie.com/v/uc0d_O-IwuE&#038;hl=en_US&#038;fs=1&#038;"></param><param name="allowFullScreen" value="true"></param><param name="allowscriptaccess" value="always"></param><embed src="http://www.youtube-nocookie.com/v/uc0d_O-IwuE&#038;hl=en_US&#038;fs=1&#038;" type="application/x-shockwave-flash" allowscriptaccess="always" allowfullscreen="true" width="425" height="344"></embed></object></p>
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				<p class="postmetadata"> Posted in <a href="http://www.gcnlive.com/wp/category/featurednews-exclusives/" title="View all posts in Featured News/Exclusives" rel="category tag">Featured News/Exclusives</a><!-- |   <a href="http://www.gcnlive.com/wp/2010/05/28/the-secret-to-personal-energy-independence/#respond" title="Comment on The Secret to Personal Energy Independence">No Comments &#187;</a>--></p>

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				<div class="post-1513 post type-post status-publish format-standard hentry category-featurednews-exclusives">
				<h3 id="post-1513"><a href="http://www.gcnlive.com/wp/2010/05/27/in-a-stunning-coup-apple-zips-by-big-brother/" rel="bookmark" title="Permanent Link to In A Stunning Coup Apple Zips By Big Brother!">In A Stunning Coup Apple Zips By Big Brother!</a></h3>
				<small>Thursday, May 27th, 2010</small>

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					<p><span class='st_facebook_large' st_title='In A Stunning Coup Apple Zips By Big Brother!' st_url='http://www.gcnlive.com/wp/2010/05/27/in-a-stunning-coup-apple-zips-by-big-brother/' displayText='share'></span><span class='st_twitter_large' st_title='In A Stunning Coup Apple Zips By Big Brother!' st_url='http://www.gcnlive.com/wp/2010/05/27/in-a-stunning-coup-apple-zips-by-big-brother/' displayText='share'></span><span class='st_email_large' st_title='In A Stunning Coup Apple Zips By Big Brother!' st_url='http://www.gcnlive.com/wp/2010/05/27/in-a-stunning-coup-apple-zips-by-big-brother/' displayText='share'></span><span class='st_sharethis_large' st_title='In A Stunning Coup Apple Zips By Big Brother!' st_url='http://www.gcnlive.com/wp/2010/05/27/in-a-stunning-coup-apple-zips-by-big-brother/' displayText='share'></span></p><p>The big question that should be asked by freedom lovers around the world. </p>
<p><strong>by Rob Argento</strong><br />
<a href="http://freedomfriends.com/">Freedom Friends</a></p>
<p>I can still remember that ominous 1984 Super Bowl half-time ad. It was Apple Corporation introducing the chosen One to liberate us from Big Brother: Macintosh was the David that would slay Goliath IBM.</p>
<p><img src="http://www.freedomfriends.com/sites/default/files/BigBrotherIBM-Girl.Jpeg" alt="" /></p>
<p>&#8220;It is now 1984. It appears IBM wants it all. Apple is perceived to be the only hope to offer IBM a run for its money. Dealers initially welcoming IBM with open arms now fear an IBM dominated-and-controlled future. They are increasingly turning back to Apple as the only force that can ensure their future freedom. IBM wants it all and is aiming its guns on its last obstacle to industry control: Apple. Will Big Blue dominate the entire computer industry? The entire Information Age? Was George Orwell right?&#8221; commented Apple founder Steve Jobs in his 1983 preview of the commercial.</p>
<p>Fast forward several decades to year 2010 and you can almost replace &#8220;IBM&#8221; with &#8220;Microsoft&#8221; and &#8220;Macintosh&#8221; with &#8220;iPad&#8221; and still get the same meaning. Only this time it&#8217;s no longer just Apple hype; it&#8217;s real. &#8220;As of Wednesday, Wall Street valued Apple at $222.12 billion and Microsoft at $219.18 billion. The only American company valued higher is Exxon Mobil, with a market capitalization of $278.64 billion,&#8221; wrote the New York Times on May 26, 2010.</p>
<p>Steve Jobs has scored and he&#8217;s scored big time. So much so that noted venture capitalist Jim Breyer was quoted by the Times as saying, &#8220;It is the single most important turnaround that I have seen in Silicon Valley.&#8221; In technological terms that turnaround signals a seismic shift away from the desktop to mobile computing and from the keyboard to a swipe of the finger across a touch screen. We are entering a new era of computing power. &#8220;The most important technology product no longer sits on your desk but rather fits in your hand,&#8221; declared the Times.</p>
<p>What will this mean for freedom lovers around the world? Well, if Jobs and Apple still hold the same ambition that once drove them to the 1984 Super Bowl half-time, the hand-held device could just become the sling shot that knocks out Goliath Microsoft.<br />
But, this only raises a more disturbing question: Is it IBM or Microsoft &#8212; or even Apple &#8212; who is the &#8220;true&#8221; Big Brother that we should all be worried about, or is it, ultimately, something or someone yet more ominous? I think a lot is riding on who controls the technology &#8212; and maybe worse yet whether anybody is controlling the technology.</p>
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				<p class="postmetadata"> Posted in <a href="http://www.gcnlive.com/wp/category/featurednews-exclusives/" title="View all posts in Featured News/Exclusives" rel="category tag">Featured News/Exclusives</a><!-- |   <a href="http://www.gcnlive.com/wp/2010/05/27/in-a-stunning-coup-apple-zips-by-big-brother/#respond" title="Comment on In A Stunning Coup Apple Zips By Big Brother!">No Comments &#187;</a>--></p>

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				<div class="post-1511 post type-post status-publish format-standard hentry category-economy">
				<h3 id="post-1511"><a href="http://www.gcnlive.com/wp/2010/05/27/bursting-the-myths-of-the-great-depression/" rel="bookmark" title="Permanent Link to Bursting the Myths of the Great Depression">Bursting the Myths of the Great Depression</a></h3>
				<small>Thursday, May 27th, 2010</small>

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					<p><span class='st_facebook_large' st_title='Bursting the Myths of the Great Depression' st_url='http://www.gcnlive.com/wp/2010/05/27/bursting-the-myths-of-the-great-depression/' displayText='share'></span><span class='st_twitter_large' st_title='Bursting the Myths of the Great Depression' st_url='http://www.gcnlive.com/wp/2010/05/27/bursting-the-myths-of-the-great-depression/' displayText='share'></span><span class='st_email_large' st_title='Bursting the Myths of the Great Depression' st_url='http://www.gcnlive.com/wp/2010/05/27/bursting-the-myths-of-the-great-depression/' displayText='share'></span><span class='st_sharethis_large' st_title='Bursting the Myths of the Great Depression' st_url='http://www.gcnlive.com/wp/2010/05/27/bursting-the-myths-of-the-great-depression/' displayText='share'></span></p><p>Government of all kind depends on elaborate mythologies to keep the people complacent in the face of constant attacks on their liberty, their property, and even their lives. </p>
<p>George C. Leef<br />
<a href="http://www.campaignforliberty.com/article.php?view=889">Campaign for Liberty</a><br />
May 27, 2010</p>
<p>Government of all kind depends on elaborate mythologies to keep the people complacent in the face of constant attacks on their liberty, their property, and even their lives. Kings used to proclaim that they were divine or at least that they ruled with divine approval, so disobedience to them was actually disobedience to God or the gods. That worked to keep most of the citizenry in line for a very long time.</p>
<p>As religion started losing its hold over people, rulers came up with new ideas. One was that the state was like a big, sheltering family where everyone had to cooperate for the common good &#8212; as directed by the government. Another idea was that the alternative to control by the government, anarchy, was so terrifying that it must be opposed at every turn. Government, according to this notion, is our bulwark against many calamities, including economic implosion. If it weren&#8217;t for the benevolent, far-seeing actions of politicians and their hired regulators, we would have to endure repeated and prolonged depressions. So even if you aren&#8217;t crazy about everything the government does, you need to accept it because the alternative is so much worse.</p>
<p>The argument that we need the government to stabilize and stimulate the economy came to the forefront during the 1930s and it&#8217;s there once again following the bursting of the housing bubble and the stock-market collapse in 2007-08. People who never think the state has too much power are beating the drums and hollering that these events once again prove the need for government to have a tight &#8212; tighter &#8212; grip on the economic reins. Numerous articles and books have been written on the wisdom we can gain by looking back in history at the Great Depression and President Roosevelt&#8217;s New Deal. The message they convey is that laissez-faire capitalism causes depressions and we must rely on activist government for salvation.</p>
<p>Economist Robert Murphy (Ph.D. from New York University, formerly on the faculty of Hillsdale College and now an independent scholar) agrees that we can learn a lot by looking back at the Great Depression and New Deal, but maintains that the lessons to be learned are the exact opposite of those that our political establishment (including its many intellectual hangers-on) want us to learn. Far from proving any defect in capitalism, the Depression actually shows that politicians should refrain from political meddling with the economy, especially federal tampering with money and credit. Also, if we hunt for the truth about the New Deal, we discover that it was just a parade of endless folly and bungling that made things worse.</p>
<p>Murphy puts it this way:</p>
<blockquote><p>More and more economists and historians are beginning to realize that the corrupt politicians who manage to waste our money today were not wizards of efficiency in the 1930s. Some things remain the same: politicians and bureaucrats have always been incompetent and venal when they&#8217;ve chosen to intervene in the economy.</p></blockquote>
<p>Oh, oh. If that idea were to become widely accepted, support for much of what the federal and state governments do would turn into hostility. That is exactly what Murphy is trying to accomplish with a book that is aimed at the everyday reader, easy to read, and free of jargon. The political scoundrels would love to keep this book out of people&#8217;s hands.</p>
<p><a href="http://itunes.apple.com/us/app/gcn-live/id366565184?mt=8"><img src="http://www.gcnlive.com/assets/stage/iPhoneApp_Med.gif" alt="Get the GCN iPhone App!" /></a></p>
<p>The real culprit</p>
<p>Most Americans have been taught that the Depression occurred because capitalists produced too much and underpaid their workers, because greedy speculators produced a stock-market bubble, because the country was stuck with the antiquated and inflexible gold standard, or some combination of those ideas. Murphy adduces strong arguments and evidence to show that those notions are entirely false. The natural stability that comes from millions of market participants acting in accordance with the price system&#8217;s signals was thrown out of kilter by Federal Reserve policies in the late 1920s. The Fed engineered artificially low interest rates then, just as it did at the beginning of our recent housing bubble. Artificially low interest rates, Murphy shows, cause people to make bad business investment decisions. That was what precipitated the boom and subsequent crash. Blame government, not capitalism.</p>
<p>And the gold standard? Murphy gives his readers a clear explanation of just how the gold standard worked in favor of overall price stability, economic growth, and trade. The seeds of disaster were planted, he shows, when European governments went off the gold standard to pay for the stupendous costs of World War I with blizzards of paper money. The gold standard was a pillar of economic stability. It was done in by politicians who couldn&#8217;t abide its restraints. Herbert Hoover</p>
<p>Americans have also been told that the Depression wouldn&#8217;t have been so bad if it hadn&#8217;t been for Herbert Hoover&#8217;s dogged insistence on letting the free market correct itself. But that idea, Murphy demonstrates, is also utterly false. Hoover was thoroughly committed to &#8220;progressive&#8221; policies he felt would put the economy back on its feet. Especially revealing is Murphy&#8217;s recounting of the fact that back in the Harding administration (1921-23) Hoover had argued in favor of government &#8220;stimulus&#8221; and interventionism. Fortunately, President Harding listened instead to Treasury Secretary Andrew Mellon, who argued for federal budget and tax cuts to help speed recovery, but otherwise not to tinker with the economy. Under Mellon&#8217;s approach, the economy quickly rebounded from its sharp postwar slump. Hoover, however, remained devoted to his belief that recessions call for more government intervention, not less.</p>
<p>Once the stock market crashed in 1929 and unemployment rose, Hoover (who had been elected president in 1928) rejected the counsel of Mellon and others who urged him to follow the same course Harding had. He was certain that it would be more effective and humane for the federal government to step in and override the slow and &#8220;cruel&#8221; free-market adjustment process. By embracing an activist approach, Hoover managed to convert what would have been a short recession into America&#8217;s worst depression.</p>
<p>Hoover was voted out of office in disgrace in the 1932 election, but to his dying day he remained adamant that his activist, &#8220;progressive&#8221; economic policy was right.</p>
<p>Franklin Roosevelt</p>
<p>His successor in the White House was Franklin D. Roosevelt, and that brings us to another myth, probably the most widespread and pernicious of all, namely that Roosevelt&#8217;s New Deal worked to bring the country out of the Depression. On the contrary, Murphy shows, the New Deal was just Hooverism taken to new, often absurd heights, and it merely deepened the country&#8217;s economic woes.</p>
<p>For example, Roosevelt and his &#8220;Brain Trust&#8221; of pro-socialist intellectuals promulgated the policy of forcing farmers to destroy crops at a time when many people were going hungry. Roosevelt, an arrogant and economically illiterate man, had become convinced that high agricultural prices were the key to restoring prosperity. He was wrong, but as usual, it wasn&#8217;t the politicians who paid the cost of their blunders. It was &#8220;the little guy&#8221; they claimed to be protecting from the ravages of capitalism.</p>
<p>Not only did Roosevelt&#8217;s New Deal prolong and deepen the Depression, but it also brought something new and ugly to America &#8212; bullying government regulators who could ruin ordinary people who just wanted to peacefully go about their business. Murphy&#8217;s chapter &#8220;The Outrages of the New Deal&#8221; should make any reader with an ounce of moral sense angry. Roosevelt&#8217;s gold seizure, his bureaucratic attacks on farmers and businessmen, his abuse of legal processes to harass those who dared to disagree with him, and many more instances will have the reader thinking, &#8220;Roosevelt was not a great president; he was a despicable failure!&#8221;</p>
<p>As an added bonus, Murphy includes a chapter to refute the notion common among conservatives that what truly ended the Depression was not the New Deal, but rather American participation in World War II. He shows that this misconception is rooted in Bastiat&#8217;s &#8220;broken-window fallacy.&#8221; That is, it depends on people&#8217;s focusing only on what is apparent (in this case, lower unemployment) and missing what is not apparent (that labor and materials were being devoted to military purposes and therefore were not available to produce goods people wanted to consume). The Depression ended only after the war was over and most economic controls were ended.</p>
<p>This book isn&#8217;t just about history. It is extraordinarily pertinent to our current political and economic circumstances. Once again, the federal government&#8217;s blundering has gotten the country into a severe recession, and once again Americans have elected a president who believes in the same statist lunacy that Hoover and Roosevelt did. Americans are being told that the only way back to prosperity is to greatly increase the size and scope of government. That was a disaster in the 1930s and it will be a disaster today if Americans fall for the lies that capitalism is the villain and government is their protector.</p>
<p>Thanks to Bob Murphy and Regnery Publishing for their efforts at telling them the truth. </p>
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				<p class="postmetadata"> Posted in <a href="http://www.gcnlive.com/wp/category/economy/" title="View all posts in Economy" rel="category tag">Economy</a><!-- |   <a href="http://www.gcnlive.com/wp/2010/05/27/bursting-the-myths-of-the-great-depression/#respond" title="Comment on Bursting the Myths of the Great Depression">No Comments &#187;</a>--></p>

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				<div class="post-1509 post type-post status-publish format-standard hentry category-us-politics">
				<h3 id="post-1509"><a href="http://www.gcnlive.com/wp/2010/05/27/abolish-antitrust-laws/" rel="bookmark" title="Permanent Link to Abolish Antitrust Laws">Abolish Antitrust Laws</a></h3>
				<small>Thursday, May 27th, 2010</small>

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					<p><span class='st_facebook_large' st_title='Abolish Antitrust Laws' st_url='http://www.gcnlive.com/wp/2010/05/27/abolish-antitrust-laws/' displayText='share'></span><span class='st_twitter_large' st_title='Abolish Antitrust Laws' st_url='http://www.gcnlive.com/wp/2010/05/27/abolish-antitrust-laws/' displayText='share'></span><span class='st_email_large' st_title='Abolish Antitrust Laws' st_url='http://www.gcnlive.com/wp/2010/05/27/abolish-antitrust-laws/' displayText='share'></span><span class='st_sharethis_large' st_title='Abolish Antitrust Laws' st_url='http://www.gcnlive.com/wp/2010/05/27/abolish-antitrust-laws/' displayText='share'></span></p><p>It may seem strange to the reader that one of the most important governmental checks on efficient competition, and therefore grants of quasi monopolies, are the antitrust laws. </p>
<p>Murray Rothbard<br />
<a href="http://www.campaignforliberty.com/article.php?view=888">Campaign for Liberty</a><br />
May 27, 2010</p>
<p>It may seem strange to the reader that one of the most important governmental checks on efficient competition, and therefore grants of quasi monopolies, are the antitrust laws. Very few, whether economists or others, have questioned the principle of the antitrust laws, particularly now that they have been on the statute books for some years. As is true of many other measures, evaluation of the antitrust laws has not proceeded from an analysis of their nature or of their necessary consequences, but from an impressionistic reaction to their announced aims.</p>
<p>The chief criticism of these laws is that &#8220;they haven&#8217;t gone far enough.&#8221; Some of those most ardent in the proclamation of their belief in the &#8220;free market&#8221; have been most clamorous in calling for stringent antitrust laws and the &#8220;breakup of monopolies.&#8221; Even the most &#8220;right-wing&#8221; economists have only gingerly criticized certain antitrust procedures, without daring to attack the principle of the laws per se.</p>
<p>The only viable definition of monopoly is a grant of privilege from the government.[1] It therefore becomes quite clear that it is impossible for the government to decrease monopoly by passing punitive laws. The only way for the government to decrease monopoly, if that is the desideratum, is to remove its own monopoly grants. The antitrust laws, therefore, do not in the least &#8220;diminish monopoly.&#8221; What they do accomplish is to impose a continual, capricious harassment of efficient business enterprise.</p>
<p>The law in the United States is couched in vague, indefinable terms, permitting the Administration and the courts to omit defining in advance what is a &#8220;monopolistic&#8221; crime and what is not. Whereas Anglo-Saxon law has rested on a structure of clear definitions of crime, known in advance and discoverable by a jury after due legal process, the antitrust laws thrive on deliberate vagueness and ex post facto rulings. No businessman knows when he has committed a crime and when he has not, and he will never know until the government, perhaps after another shift in its own criteria of crime, swoops down upon him and prosecutes.</p>
<p>The effects of these arbitrary rules and ex post facto findings of &#8220;crime&#8221; are manifold: business initiative is hampered; businessmen are fearful and subservient to the arbitrary rulings of government officials; and business is not permitted to be efficient in serving the consumer. Since business always tends to adopt those practices and that scale of activity which maximize profits and income and serve the consumers best, any harassment of business practice by government can only hamper business efficiency and reward inefficiency.[2]</p>
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<p>It is vain, however, to call simply for clearer statutory definitions of monopolistic practice. For the vagueness of the law results from the impossibility of laying down a cogent definition of monopoly on the market. Hence the chaotic shift of the government from one unjustifiable criterion of monopoly to another: size of firm, &#8220;closeness&#8221; of substitutes, charging a price &#8220;too high&#8221; or &#8220;too low&#8221; or the same as a competitor, merging that &#8220;substantially lessens competition,&#8221; etc.</p>
<p>All these criteria are meaningless. An example is the criterion of substantially lessening competition. This implicitly assumes that &#8220;competition&#8221; is some sort of quantity. But it is not; it is a process, whereby individuals and firms supply goods on the market without using force.[3] To preserve &#8220;competition&#8221; does not mean to dictate arbitrarily that a certain number of firms of a certain size have to exist in an industry or area; it means to see to it that men are free to compete (or not) unrestrained by the use of force.</p>
<p>The original Sherman Act stressed &#8220;collusion&#8221; in &#8220;restraint of trade.&#8221; Here again, there is nothing anticompetitive per se about a cartel, for there is conceptually no difference between a cartel, a merger, and the formation of a corporation: all consist of the voluntary pooling of assets in one firm to serve the consumers efficiently. If &#8220;collusion&#8221; must be stopped, and cartels must be broken up by the government, i.e., if to maintain competition it is necessary that cooperation be destroyed, then the &#8220;antimonopolists&#8221; must advocate the complete prohibition of all corporations and partnerships. Only individually owned firms would then be tolerated. Aside from the fact that this compulsory competition and outlawed cooperation is hardly compatible with the &#8220;free market&#8221; that many antitrusters profess to advocate, the inefficiency and lower productivity stemming from the outlawing of pooled capital would send the economy a good part of the way from civilization to barbarism.</p>
<p>An individual becoming idle instead of working may be said to &#8220;restrain&#8221; trade, although he is simply not engaging in it rather than &#8220;restraining&#8221; it. If antitrusters wish to prevent idleness, which is the logical extension of the W.H. Hutt concept of consumers’ sovereignty, then they would have to pass a law compelling labor and outlawing leisure &#8212; a condition certainly close to slavery.[4] But if we confine the definition of &#8220;restraint&#8221; to restraining the trade of others, then clearly there can be no restraint of trade at all on the free market &#8212; and only the government (or some other institution using violence) can restrain trade. And one conspicuous form of such restraint is antitrust legislation itself!</p>
<p>One of the few cogent discussions of the antitrust principle in recent years has been that of Isabel Paterson. As Mrs. Paterson states:</p>
<blockquote><p>Standard Oil did not restrain trade; it went out to the ends of the earth to make a market. Can the corporations be said to have &#8220;restrained trade&#8221; when the trade they cater to had no existence until they produced and sold the goods? Were the motor car manufacturers restraining trade during the period in which they made and sold fifty million cars, where there had been no cars before&#8230; Surely&#8230; nothing more preposterous could have been imagined than to fix upon the American corporations, which have created and carried on, in ever-increasing magnitude, a volume and variety of trade so vast that it makes all previous production and exchange look like a rural roadside stand, and call this performance &#8220;restraint of trade,&#8221; further stigmatizing it as a crime![5]</p></blockquote>
<p>And Mrs. Paterson concludes:</p>
<blockquote><p>Government cannot &#8220;restore competition&#8221; or &#8220;ensure&#8221; it. Government is monopoly; and all it can do is to impose restrictions which may issue in monopoly, when they go so far as to require permission for the individual to engage in production. This is the essence of the Society-of-Status. The reversion to status law in the antitrust legislation went unnoticed&#8230; the politicians&#8230; had secured a law under which it was impossible for the citizen to know beforehand what constituted a crime, and which therefore made all productive effort liable to prosecution if not to certain conviction.[6]</p></blockquote>
<p>In the earlier days of the &#8220;trust problem,&#8221; Paul de Rousiers commented:</p>
<blockquote><p>Directly the formation of Trusts is not induced by the natural action of economic forces; as soon as they depend on artificial protection (such as tariffs), the most effective method of attack is to simply reduce the number and force of these protective accidents to the greatest possible extent. We can attack artificial conditions, but are impotent when opposing natural conditions&#8230; America has hitherto pursued the exactly reverse methods, blaming economic forces tending to concentrate industry, and joining issue by means of antitrust legislation, a series of entirely artificial measures. Thus there is to be no understanding between competing companies, etc. The results have been pitiful &#8212; a violent restriction of fruitful initiative&#8230; [The legislation] does not touch the rest of the evil, enlarges, in place of restraining, artificial conditions, and finally regulates and complicates matters whose supreme needs are simplification and removal of restrictions.[7]</p></blockquote>
<p>This essay is excerpted from chapter 3 of Murray N. Rothbard&#8217;s Power and Market: Government and Economy.</p>
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				<p class="postmetadata"> Posted in <a href="http://www.gcnlive.com/wp/category/us-politics/" title="View all posts in U.S. Politics" rel="category tag">U.S. Politics</a><!-- |   <a href="http://www.gcnlive.com/wp/2010/05/27/abolish-antitrust-laws/#respond" title="Comment on Abolish Antitrust Laws">No Comments &#187;</a>--></p>

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				<h3 id="post-1507"><a href="http://www.gcnlive.com/wp/2010/05/27/governments-business-isnt-business/" rel="bookmark" title="Permanent Link to Government’s Business Isn’t Business">Government’s Business Isn’t Business</a></h3>
				<small>Thursday, May 27th, 2010</small>

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					<p><span class='st_facebook_large' st_title='Government’s Business Isn’t Business' st_url='http://www.gcnlive.com/wp/2010/05/27/governments-business-isnt-business/' displayText='share'></span><span class='st_twitter_large' st_title='Government’s Business Isn’t Business' st_url='http://www.gcnlive.com/wp/2010/05/27/governments-business-isnt-business/' displayText='share'></span><span class='st_email_large' st_title='Government’s Business Isn’t Business' st_url='http://www.gcnlive.com/wp/2010/05/27/governments-business-isnt-business/' displayText='share'></span><span class='st_sharethis_large' st_title='Government’s Business Isn’t Business' st_url='http://www.gcnlive.com/wp/2010/05/27/governments-business-isnt-business/' displayText='share'></span></p><p>Few seem to have noticed that their idea of privatization differs vastly from the reality. </p>
<p>Becky Akers<br />
<a href="http://www.campaignforliberty.com/article.php?view=885">Campaign for Liberty</a><br />
May 27, 2010</p>
<p>In October 2008, the City of Chicago tried to lease Midway Airport to a consortium. The lessee forked over $2.52 billion for the right to operate the airport per the City&#8217;s dictates in exchange for collecting the revenues &#8212; which promised to be substantial since government would continue granting both Midway and O&#8217;Hare International a monopoly on Chicago&#8217;s commercial airspace. The consortium would recoup its billions from the rentals it charges airlines and other concessions, increasing the cost of everything from airfare to parking. Nor would taxpayers receive rebates in what the City swipes from them, though theoretically they would no longer foot Midway&#8217;s bills. Indeed, they would have also covered Midway&#8217;s property taxes since its contract exempted the consortium from such burdens.</p>
<p>All this would keep the lessee accountable to government, not customers. It would strive to please its landlord and the politicians who write regulations rather than passengers. Fortunately for the latter, the imploding economy killed the scheme when the consortium couldn&#8217;t assemble financing.</p>
<p>This scam was many things, but &#8220;free market&#8221; isn&#8217;t one of them. Yet the consortium was a &#8220;private&#8221; corporation comprised of Citi Infrastructure Investors, YVR Airport Services and John Hancock Life Insurance. So politicians, the media, and the plundered public dub deals like this &#8220;privatization.&#8221;</p>
<p>Surprisingly, so do many lovers of liberty. Few seem to have noticed that their idea of privatization differs vastly from the reality.</p>
<p>When freedom&#8217;s fans speak of privatizing, we mean &#8212; or should &#8212; prying from government some business it had no constitutional, moral, or practical right to subsume in the first place. But &#8220;privatization&#8221; (a.k.a. &#8220;public-private partnerships&#8221; and &#8220;outsourcing&#8221;) rarely if ever accomplishes that in practice: &#8220;. . .private investors and local and state governments, through public-private partnerships (P3&#8242;s), have the unique opportunity to satisfy each other&#8217;s needs,&#8221; writes Jacob Frydman for The Huffington Post &#8212; as if satisfying the State&#8217;s &#8220;needs&#8221; is either good or possible. &#8220;. . .[T]he assets typically remain owned by the government, and are only leased to the private entity.&#8221;</p>
<p>That isn&#8217;t the only definition. &#8220;Privatization can mean everything from contracting out . . . to government getting out of the business entirely,&#8221; notes one blogger. And though the word occasionally designates the complete divestiture we seek (&#8220;[W]hy don&#8217;t we just privatize the Post Office[?]&#8221; another blogger asks. &#8220;. . .It&#8217;s high time it was done away with. . .&#8221;), it usually refers instead to that aforementioned &#8220;partnership&#8221; between politicians and their corporate cronies. Indeed, the Baker County [FL] Press quoted Pablo Paez, &#8220;corporate relations director for Boca Raton-based GEO Group,&#8221; with what is currently privatization&#8217;s most accurate description: &#8220;The combination of effective state oversight with private sector service delivery. . .&#8221; Why would anyone who favors freedom favor that?</p>
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<p>&#8220;Privatization&#8221; certainly sounds libertarian with its implication that government will cede to entrepreneurs some service or bit of infrastructure it has bungled. But &#8220;privatizing&#8221; governments don&#8217;t admit their incompetence, nor do they sell their failures. Instead, they rent them to corporations while retaining control. The corporation assumes day-to-day management and maintenance. Politicians and bureaucrats are still in command, still subsidizing the privatized project with taxes, loans, or outright grants, still ensuring a monopoly that leaves &#8220;customers&#8221; little or no choice. In fact, the folks using whatever&#8217;s been privatized resemble customers only because they often begin paying directly &#8212; and more &#8212; for each use, with no commensurate reduction in taxes. If you think that sounds suspiciously like double-billing, you&#8217;re right.</p>
<p>It&#8217;s easy to see why privatizing has joined pork as politicians&#8217; favorite dish. Midway was only one of Chicago&#8217;s forays into this brave new world: the City also leased an elevated and tolled road known as the Skyway in 2004 to Cintra-Macquarie, a Spanish-Australian consortium, for $1.8 billion. That bought Cintra-Macquarie permission &#8220;to double the $2 toll to $4 over the next decade, and keep raising it thereafter,&#8221; according to the Associated Press. Privatizing some of its public garages fetched Chicago $563 million in 2006. And though it failed with Midway two years later, it succeeded in privatizing 36,000 parking meters. Auctioning its army of mechanical bandits enriched the City with another $1.15 billion; the Chicago Sun-Times noted that the deal also &#8220;gave a private contractor carte blanche to raise [the rates] sky-high.&#8221;</p>
<p>Chicago isn&#8217;t alone. A frenzy of privatizing has seized American governments at all levels as politicians who refuse to slash spending scramble for cash. Not only have they clamored to privatize &#8220;services&#8221; from trash collection to Social Security, they&#8217;re privatizing the infrastructure taxpayers built as well &#8212; rather like a seneschal who installs tenants in his lord&#8217;s manor, then pockets the rent. The city of Akron, Ohio, tried to privatize its provision of water and sewerage in November 2008; voters defeated the measure and rightly so since politicians promised no corresponding reduction in taxes. In Idaho, Boise State Radio reports that &#8220;all branches of the military have been in the process of privatizing base housing&#8221; for the last ten years; this &#8220;could mean big business for local construction companies.&#8221;</p>
<p>The shattered economy has dampened some of this enthusiasm &#8212; primarily and intriguingly because of &#8220;privatization&#8217;s&#8221; free-market associations: &#8220;Back in the days when the market was a kind of secular god,&#8221; Thomas Frank opined in the Wall Street Journal last year, &#8220;. . .the idea of privatizing highways and airports and other bits of our transportation infrastructure made a certain kind of sense. Private businesses did everything better than the state, we were told. . . But . . . many brilliant schemes of the last few decades melt[ed] away in this harsh new day of failing banks and plummeting asset prices.&#8221;</p>
<p>Yet politicians and libertarians still hype privatization &#8212; even as taxpayers fear it. Why the alarm? First, like libertarians, they take the name at face-value. Thanks to the reflexive socialism that perverts modern thinking, too many Americans distrust anything with entrepreneurial overtones. The market is their habitual scapegoat, so something that pretends to transfer a public embarrassment to private enterprise is automatically suspect.</p>
<p>As if that weren&#8217;t enough, privatization almost always raises the price citizens-cum-&#8221;customers&#8221; pay. After all, corporations aren&#8217;t bidding billions on these contracts for the fun of it: they expect to recover their investment and then some. Actually, a considerable sum. Their victims realize whose pockets are being picked, and they despise privatization for legalizing such theft. They also loathe its libertarian support. &#8220;Beware!&#8221; one blogger ranted. &#8220;Our own and Europe&#8217;s own Libertarians now run the IMF and the World Bank. . . . [Their] goal is to strip all government of ownership and to privatize and outsource all public property including all functions of government.&#8221;</p>
<p>Privatization&#8217;s partisans cheer their pet as though it&#8217;s revolutionary. But only the term is new: Random House Dictionary traces its coinage to around 1945. Most governments around the world and throughout history have relied on entrepreneurs to furnish at least some of the State&#8217;s firepower &#8212; quite literally from the 17th century through the Napoleonic era, for example, when Western administrations augmented their navies with privateers. &#8220;Letters of marque&#8221; authorized these privately owned and crewed ships to attack any vessel flying the enemy&#8217;s flag. For obvious reasons, privateers generally avoided men-o&#8217;-war and their 64 guns in favor of commercial prey. Captains sold the ships and cargo they captured at auction, dividing the proceeds with their men. Privatization and piracy share more than just a &#8220;p&#8221; and &#8220;r.&#8221;</p>
<p>Governments hired private parties for other &#8220;services,&#8221; too. Contractors cleaned New York City&#8217;s streets in the early nineteenth century and, in the early twentieth, the City annually handed &#8220;some four million dollars to religious and privately managed hospitals and asylums that receive the city&#8217;s poor,&#8221; according to Rider&#8217;s NEW YORK CITY: A Guide-Book for Travelers, published in 1916. Perhaps Philadelphia indulged in one of government&#8217;s more transparent ploys. During the 1830&#8242;s and ‘40&#8242;s, riots regularly rocked many of America&#8217;s mushrooming metropolises, including the City of Brotherly Love. Diarist Sidney George Fisher noted that &#8220;various organized gangs of ruffians&#8221; plagued the place &#8212; and he wasn&#8217;t referring to cops. Philadelphia eventually deputized a rival gang to restore order, forerunners to the modern force of uniformed ruffians.</p>
<p>Government contracts have always been synonymous with corruption. Soldiers writing home from any American war relate tale after tale of wormy biscuits, boots that disintegrate, uniforms unraveling at the seams. So it went with street-cleaning, too. New York&#8217;s roads were still filthy, and much of the manure shoveled from them found its way to parks rather than the distant areas designated for disposal. But the cleaning companies&#8217; lavish contributions to political campaigns as well as their outright bribes kept the politicians who hired them from firing them.</p>
<p>Then or now, rulers happily &#8220;privatize&#8221; because they understand the vast benefits for the State. We should, too. That will motivate us to fight all forms of privatization short of an outright, final sale.</p>
<p>First and most noticeable are the fortunes with which corporations buy the privilege of forcing folks who already pay for maintaining the roads or collecting trash to cough up yet more money in &#8220;user fees.&#8221; Chicago Midway&#8217;s $2.5 billion and the Skyway&#8217;s $1.83 billion are typical; the City&#8217;s parking-meter deal reportedly showered another $1.2 billion on politicians&#8217; sticky fingers.</p>
<p>Of course, paying for those &#8220;services&#8221; &#8212; and only those services &#8212; we actually use is an improvement over the State&#8217;s taxing of all to provide goodies for some. But that presumes a commensurate cut in taxes. Such a miracle has yet to accompany privatization.</p>
<p>The State profits a second time because its expenses diminish when the lessee pays the privatized project&#8217;s operating costs &#8212; but again, government doesn&#8217;t reduce taxes. An op-ed in the Christian Science Monitor recognized this: &#8220;Privatization increases the financial resources available to governments. Revenue from the sale itself is a bonus, but the big payoff to the public purse comes from the elimination of subsidies to cover the losses of state-run firms, and the increased taxes paid by now-profitable private companies.&#8221; Why would anyone who loves liberty want the State to prosper? Meanwhile, governments don&#8217;t return those subsidies to their rightful owners but instead prove how &#8220;good&#8221; they are by shifting it to worthier recipients, according to the Monitor: &#8220;These increased resources provide an opportunity for good governments to help the poor. In Chile and Mexico, for example, privatizing governments have increased spending on social services.&#8221; In Akron, the money raked from privatized sewers would have &#8220;fund[ed] a . . . scholarship program reserved for local public high school graduates attending a local university, college, or trade or vocational school.&#8221;</p>
<p>Privatization also hides government&#8217;s incompetence. Privatized services or property may run a bit better under corporations than they did under bureaucrats, though not by much since regulations still hamstring these companies. But you can bet politicians claim the credit for even the tiniest drop in traffic on the Skyway; after all, they&#8217;re supervising it and keeping an eye on those greedy lessees, aren&#8217;t they? And when traffic jams, the State shakes its head and asks what else we can expect from private enterprise.</p>
<p>Privatization unites government with business, exponentially empowering both at everyone else&#8217;s expense. Alexander Hamilton argued for a central bank and public debt precisely because they would keep the country&#8217;s most influential, powerful men loyal to the new government. Human nature hasn&#8217;t changed since then. Corporations that contract with Leviathan are unlikely to protest the beast&#8217;s actions, however unconstitutional or inhumane. In fact, they often assist the State in its predations. Now that Chicago has privatized its meters, the Sun-Times reports that &#8220;parking enforcement will also get tougher&#8221; because &#8220;the partnership that includes Morgan Stanley Infrastructure Partners and LAZ Parking [will] issue parking tickets to ‘supplement&#8217; the city&#8217;s efforts.&#8221;</p>
<p>Instead of &#8220;privatizing&#8221; assets and services, let&#8217;s work to divorce them completely from government. Not only does that benefit taxpayers by transforming them into genuine customers, it also cripples Leviathan. And let&#8217;s coin a term other than &#8220;privatization&#8221; since the State has bastardized that as surely as it does everything it touches.</p>
<p>We should always oppose rulers&#8217; vile collusion with industry, even when advocates call it &#8220;privatization&#8221; and claim to honor the free market. Government has no business being in business.</p>
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