OpenMarket: Richard Morrison

He’s from the government, and he’s here to help. That’s the comic premise of this summer’s best YouTube video series, “Love Gov,” from the Independent Institute. In this case, though, the protagonist is the government, personified. The story begins when Scott “Gov” Govinsky meets sweet college student Alexis, and quickly takes an interest…in every aspect of her life.

The series has already racked up over 1.5 million views, with positive reviews from fine folks like San Francisco Chronicle columnist Debra Saunders and the Hayek Institute’s Barbara Kolm, who declared the videos “brilliant.”

Episode 1 of the five-part series sees Gov giving Alexis some questionable advice about her rapidly accumulating student loan debt. Her best friend Libby tries to steer her back to the sensible path, but Gov’s pushy know-it-all attitude threatens to nudge Alexis in a foolish direction.

Gov goes on to dig his fingers into Alexis’ small business, butt into her healthcare decisions, mishandle her home-buying plans, and spy on her phone calls and emails. Where will it all end? You’ll have to watch the full series to find out. 

Don Boudreaux over at Café Hayek has just given a 2015 boost to a smart 2012 video from Learn Liberty on social cooperation in a free society. It’s worth spending another 3 minutes with, even if you’re one of the 1,394,608 people who have already seen it.

In this video, Prof. Aeon Skoble of Bridgewater State University highlights one of my favorite themes: a market economy involves not only economic competition, but also an impressive degree of voluntary cooperation, even between entities one would assume to be direct rivals.

For more great videos, check out the Learn Liberty channel on YouTube, and discover why Prof. Skoble can be heard admitting “to be perfectly honest, I’m not as sexy as Hugh Jackman.” 

My venerable colleague Fred Smith and I just returned from the Hoosier State, where we were honored to be guests of the Indianapolis chapter of the Bastiat Society. Our event featured a few dozen local business leaders: executives, attorneys, and entrepreneurs, as well as a few elected officials. We all gathered to discuss the role that businesspeople can play in defending the free market and reviving an appreciation for the virtues of capitalism.

It may be surprising to some, but not every business owner is a Hayek-quoting ideologue who has a photo of Ayn Rand on his desk. The majority are focused overwhelmingly on their customers, employees, and the day-to-day work of running their company. We have found that most business people spend very little time on politics in general, much less the intellectual arguments over the morality of capitalism and the ideas of classical liberalism.

At the same time, we have also found that it’s difficult for think tank types and academics to defend the enterprise of capitalism without at least a few actual capitalists speaking up as well. Fred, in his essay “Countering the Assault on Capitalism,” explains this dynamic and its history quite well. The late economist Joseph Schumpeter theorized this conflict as far back as the 1940s – most business leaders would stick to what they know best, and leave the public debate over morality and economics to others. With discussions of the proper role of government dominated by groups with little sympathy to private enterprise, the rise of big government was easy to predict.

Fortunately, we now have a robust cadre of scholars as well as a growing network of free market professionals, including the members of the Bastiat Society around the globe, as well as members of groups like the Adam Smith Society and Benjamin Rush Institute. With events like our dinner this week, we’ll be working to bring those two groups together to stand up to the ever-increasing expansion of the regulatory state.

British journalist Paul Mason has famously declared that capitalism is dying, and he is in no sniffling state of mourning about it. In advance promotion for the publication of his forthcoming book, Postcapitalism, he was penned a nearly 5,000-word article for the Guardian that covers quite a bit of anti-capitalist/leftist/techno-utopian theory. There’s a lot to respond to in this piece (not to mention the full 368 pages of his book), but one assumption in particular strikes me as misplaced.

Mason charmingly begins by lamenting that the free market system wasn’t overthrown by violent revolution during the course of the 20^th Century (“Capitalism, it turns out, will not be abolished by forced-march techniques”), but then goes on to point out the many ways in which information technology has changed economic life in the past few decades. Indeed, the “main contradiction” in Mason’s modern world is between a tech-enabled economy where goods are “free” and “abundant” and one where they are “scarce and commercial.”

There’s an interesting discussion to be had about the way in which copyright and other intellectual property laws create an artificial scarcity of the kind of information goods that Mason thinks are key. But for now I’m interested in his dichotomy between economic goods, which are assumed to be “free” just because they are non-commercial, and the idea that widespread non-commercial provision of certain goods and services is somehow antithetical to capitalism.

There’s a lot being written these days about income (and wealth) inequality, and how a free market economy allegedly exacerbates the divide between the rich and the poor. Statistical measures of inequality look at income groups in the aggregate, though—they don’t tell us which people are in those low and high income groups, or how the composition of those groups change over time. As the George Mason University’s Tyler Cowen wrote in The New York Times earlier this year:

Income inequality and economic immobility are often lumped together, but they shouldn’t be. Consider the two concepts positively: Income equality is about bridging the gap between the rich and the poor, while economic mobility is about elevating the poor as rapidly as possible. Finding ways to increase economic mobility should be our greater concern.

And as it turns out, there is a great deal of mobility between income groups in the United States. Today in MarketWatch, Prof. Steve Horwitz of St. Lawrence University reminds us that, because of the dynamic nature of a capitalist economy, anyone can end up at the top of the income scale:

What economists call income mobility continues in this country over the course of any individual’s lifetime and across generations. Being poor at any specific point in time, or being the child of poor parents, does not mean people are unable to move up the income ladder. In the same way, there is no guarantee that those at the top will stay there.

The usual rhetoric about income inequality focuses on how the share of total income held by the top 20% has grown while that held by the bottom 20% has fallen over the last few decades. That’s true, but it ignores the question of whether the same people are in the top and bottom from year to year.

The Freeman has an excellent article by FEE advisory board member Robert Anthony Peters on economic lessons in popular culture—in this case focusing on the wealthiest of Disney’s characters, Scrooge McDuck. It may seem odd to look for pro-capitalist storylines from a character named after literature’s most famous miser, but Peters explains how the character’s originator, Carl Banks, made Scrooge McDuck an exemplar of the virtues of hard work, honesty, and strategic thinking.

In a series of stories that highlighted economic concepts like subjective value, mutual gains from trade, and entrepreneurship, Banks sent Scrooge and his grand-nephews on a series of adventures in which they manage to escape peril and achieve success through quick thinking and smart financial decisions. He debunked utopianism a la Jonathan Swift when the gang visits “Tralla La,” a mystical land where greed is allegedly unknown, and showed the potential of free exchange in “Maharajah Donald,” a story in which Huey, Dewey, and Louie start off with an old pencil stub and end up, after a series of shrewd trades, with enough money to buy a steamboat ticket all the way to India.  

And Banks certainly didn’t stumble upon these pro-market parables by chance. When he was writing for Uncle Scrooge comics, he knew he was confronting the collectivist trends of the mid-20^th Century, once saying “I’m sure the lesson I preached in this story of easy riches will get me in a cell in a Siberian gulag someday.” Fortunately Banks escaped the gulag, and generations of viewers have been enriched because of it. Scrooge McDuck’s persona as a frugal but talented and honorable person even persisted into the 1980s cartoon series DuckTales, in which Uncle Scrooge delights in a fortune made through wise investments and honest deals.

If you’ve got young children, you might want to brace yourself for 2017, when Disney will be launching a DuckTales re-boot to be broadcast on Disney XD. Let’s hope the spirit of Carl Banks will continue to guide the writers and producers in the 21st Century version.

American Enterprise Institute president Arthur Brooks has a new book out this week, The Conservative Heart: How to Build a Fairer, Happier, and More Prosperous America. In the past, Brooks has expressed concern that a large portion of the American public doesn’t believe that conservatives (and libertarians) have much of a heart—that they don’t care much about the problems of the poor and disadvantaged. He has made countering this impression a major part of AEI’s mission, sponsoring events like AEI’s “Vision Talks,” in particular this one from last June, titled “A Conservative Vision for Social Justice,” which featured Brooks himself as well as former New York City social services guru Robert Doar and Bloomberg View columnist Megan McArdle.

In the book, Brooks observes that the spread of the institutions of free market capitalism has been consistent with dramatic reductions in poverty around the world—the percentage of people living in “starvation-level” poverty, for example, had declined 80 percent since 1970. And he names the five institutions that he thinks have been most important: globalization, free trade, property rights, the rule of law, and entrepreneurship. With this history of increasing prosperity, one would think that a capitalist economic system would be pretty popular among advocates for the poor. But, of course, Brooks reminds us of the paradoxical reality that we see today.

…it is precisely the loudest champions of free enterprise—the heroes of poverty relief in the developing world—who the public trusts least to fight for struggling people here at home. Conservatives have the most effective solutions for human flourishing in our intellectual DNA. Our ideas have lifted up people all over the world. But the American people do not trust us to put those principles into practice to help those who need help right here.

Once upon a time critics of corporate America complained that executive salaries were too high, and too often disconnected from the performance of the firm. Senior managers are making millions while the company loses money—where’s the logic in that? So today many firms, including large banks and other financial services companies, have performance-based compensation packages—at least some of the money executives make is tied to the firm’s annual profits. Now incentives are aligned smartly, right?

A potential complication creeps in, however, when a firm needs to restate its earnings. If a major deal goes south and restated earnings are lower than they were initially reported, perhaps we should restate an executive’s compensation as well, the thinking goes. This is the idea behind a provision of the Dodd-Frank Wall Street “Reform” Act. As Andrew Ross Sorkin reports in The New York Times, the Securities and Exchange Commission is currently working on a new rule which would expand this “clawback” concept from where it is already in force among Wall Street firms to all publicly traded companies. If restated profits were lower than they were in the year in which performance-related compensation was paid out, the company can demand that some of that bonus be repaid—as long as three years later.

The Competitive Enterprise Institute's newest film project, I, Whiskey: The Spirit of the Market, is currently in production, and you can help make it a success. We’re supporting the project with a crowd-funding campaign at Indiegogo, the largest global fundraising site, just launched today.

I, Whiskey is our next installment in the I, Pencil Film Series. It will be a story about the power of human ingenuity, the market, and how these forces work together to give us the many wonderful innovations and products that enrich our lives every day.

The happy warriors of CEI have returned from our sojourn to Las Vegas and the excitement of FreedomFest 2015: Discover the New American Dream. The conference featured everyone from Steve Forbes and John Stossel to CEOs John Mackey and Peter Thiel to Dinesh D’Souza and Glenn Beck. The sessions were a mix of libertarian activism, conservative analysis, and new opportunities to invest in precious metals.

The best sessions, of course, featured CEI president Lawson Bader. On Friday morning the room was packed for “Gavel Out! Legal Opportunities to Push Back Regulatory Overreach,” in which Lawson gave an overview of the threat of the growing regulatory state and its costs and then described the many legislative and legal strategies available for rolling back the advance of federal agencies.

The next day Lawson joined the presidents of the Cato Institute, the Reason Foundation, and the Intercollegiate Studies Institute for “Think Tanks Make a Difference!” moderated by author Elizabeth Ames. Panelists shared their views of the role of think tanks in the liberty movement, and discussed the impact each organization has achieved over the years. David Nott of Reason, for example, shared the work of president emeritus Robert Poole and his success in persuading state and local governments to privatize the provision of public services.