Category: free trade & free markets

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free trade & free markets individual achievement

Modern Tech Gives a Hand

This is a story about how technology is making things better. About 840 times better.

What’s represented by that multiple is price — the far lower price of a machine that 53-year-old Jose Delgado Jr. uses instead of the left hand he was born without.

For three years he had used a prosthesis costing $42,000. Its myoelectric technology detects electrical signals in muscle tissue in order to operate prosthetic fingers.Cyborg Beast

But the gadget’s capacity to grip? Rudimentary.

Now Delgado has a more capable prosthesis, the result of the latest technological breakthrough.

And it costs just 50 bucks.

3D printing has been advancing rapidly, sometimes controversially. It is now possible to produce a working metal gun with the technology.

It’s hard to see what can be controversial about Delgado’s new 3D-printed prosthesis, though.

Is the price for real? Perhaps the $50 incorporates only immediate production costs, and that other factors involved in developing and marketing the Cyborg Beast could make it pricier. But given what’s been demonstrated, even its most expensive incarnations would have to be orders of magnitude cheaper than earlier prosthetic tech.

It also does the job better.

The Beast’s mechanical plastic fingers are much better articulated than those of its predecessor. It grips objects more firmly and precisely, manipulates them more dexterously. Delgado dramatically demonstrates the superiority in a YouTube video produced by 3D Universe.

Such products of human ingenuity are stunning. Yet soon we’ll take for granted what they now make possible for the first time. And there’s a lot more to come. We live in interesting times.

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets national politics & policies too much government

Preparing for a Bailout

In his 2012 State of the Union speech, President Obama declared, “It’s time to apply the same rules from top to bottom: No bailouts, no handouts and no cop-outs.”

Yes. He said that. But in reality, the handouts and cop-outs have kept on coming, like the solar wind.bucket for bailout

A Washington Examiner editorial notes that while “Obama blasted the influence of insurance lobbyists and vowed to take on the industry … as president, he passed a health care law that funnels more than $1 trillion in subsidies to insurers, and fines Americans who do not purchase their products.”

Go ahead: call that a handout.

But what about bailouts?

While newspapers like The Washington Post insist that Obamacare is exempt from such an eventuality, there remains the part of the Affordable Care Act known as the risk corridor programs. These reimburse “insurance plans for claims that cost significantly more than premiums that new subscribers paid in,” according to The Post’s Wonkblog. The goal is to protect health insurance companies from the risks they face in the new Obamacare exchange.

Companies that make money will pay into a fund that will be used to bail out companies that lose money. But, after obvious complaints about limits, the Centers for Medicare and Medicaid Services (CMS) pushed a mandate that the program be revenue neutral, that the money paid out not exceed that paid in.

Last Friday, in 435 pages of regulations, CMS abandoned this call for budget neutrality. Instead, the regulation states, “In the unlikely event of a shortfall for the 2015 program year, HHS recognizes that the Affordable Care Act requires the secretary to make full payments to issuers.”

A taxpayer bailout: fully in place.

This is Common Sense. I’m Paul Jacob.

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free trade & free markets initiative, referendum, and recall national politics & policies

The 22 Franc Minimum Wage

Fox News’s Bill O’Reilly and 2012 Republican presidential candidate Mitt Romney agree with America’s progressives: raising the minimum wage is common sense.

The Swiss had a chance to prove their solidarity with that notion yesterday, when they voted on whether to establish a minimum wage in the country, a rather high one of 4000 francs per month (something close to 22 francs per hour). They voted the proposal down.

Overwhelmingly. By over 76 percent.Frederic Bastiat's classic essay, What Is Seen and What Is Unseen

Unlike in America, this minimum wage would have affected a huge hunk of the population. One out of ten Swiss workers earns less than the proposed minimum. In America, only about a single percentage of workers earns close to the national minimum.

This matters, as Frédéric Bastiat clearly explained, because price regulations can have two effects: a loss of production, or none at all — “either hurtful or superfluous.” No effect, when the price floor (as in a minimum wage) is set lower than the level most prices are already at (or, for which workers already work). But when the price floor gets set higher, goods go off the market — with too-high wage minimums, workers with low productivity cease to get hired.

Swiss voters could scarcely afford to risk the jobs of ten percent of the workforce.

In America, raising the minimum wage is usually a matter of sacrificing a few people (whom voters mostly don’t know — Bastiat’s “unseen”) while rejoicing in the higher wages of those workers retained (the “seen”).

In Switzerland, the government declared the down vote a victory for common sense.

Which it was.

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets

Bigots Hate Competition

Apparently, economics is hard. But some things are pretty straightforward.

For example, both parties to a trade gain: it’s called “mutual benefit through exchange.”

Another basic principle? Employers hire labor expecting productivity. Businesses don’t hire workers who can’t produce enough to more than cover their wages — and managers fire workers when they prove they aren’t productive enough.

And yet another? Competition for trade increases the quality of products, reduces price, or both and tends to equalize prices for goods of the same quality.Gary Becker: 1930-2014

An appreciation of late economist Gary Becker on reason.com shows the consequence of the latter principle in a perhaps unexpected area: discrimination.

A company that pays someone less than they are worth encourages worker flight, “jumping ship.” Companies that refuse to hire qualified women or minorities when they could underbid similarly productive workers (demanding higher wages) could find themselves out-competed by less discriminatory businesses. Indeed, studies suggest they could find themselves less profitable and even out of existence.

Nobel Laureate Gary Becker saw this, and realized that free markets impose a check upon bigotry. Regulations that limit competition in industry also stifle gender workforce participation and increase inequality. “[C]ountries such as Japan that have avoided deregulation, shareholder capitalism, and open markets,” summarizes Elizabeth Nolan Brown, “tend to lag in both productivity and workplace gender equality.”

There are many good reasons to favor free markets. They not only make us wealthier, they discourage prejudicial behavior. Competition punishes bad behavior even while it emphasizes win-win scenarios.

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets

Legislator Knows Best?

In Florida, microbreweries are growing, creating customer demand, profits and new jobs. In 2007, there were only seven such craft breweries in the entire state; by year’s end, nearly 90 will be open for business.

Don’t worry, though, Sunshine State legislators are hard at work . . . getting in the way of work, snuffing out any whiff of economic success and the jobs that come with it.

Sen. Kelli Stargel’s Senate Bill 1714 just passed the Republican-dominated upper house. It slaps new regulations on brewers to the delight of beer distributors.

Sen. Jack Latvala dubbed SB-1714 “an attack on craft beer to protect distributors.”

“We’ve got this industry that’s growing,” noted an official with the Florida Brewers Guild. So, he wondered “why are we putting arbitrary restrictions on how they can grow and how their business model operates?”

“This bill is not going to limit their growth,” maintained Sen. Stargel. “We are not restricting one single craft brewer and we are not limiting what they can do. I know they don’t believe it.”

Yet, currently Florida’s craft breweries can sell as much of their beer as they want. Under the bill, they’re limited to 20 percent of total production. The remaining beer would have to be sold through — you guessed it! — a distributor.

“I know my kids don’t believe it when I tell them they can’t do something, but sometimes I know it is what’s best,” Stargel offered. “I believe this is what is best for their industry.”

Beer is a good business . . . that only politicians could screw up.

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets too much government

What Private Builders Build

In 2012, President Obama caused an uproar among those of us who praise individuals for their individual achievements. Sneering at persons proud of their success, Obama stressed the truism that in a society, achievers get help from other people. On his short list of invaluable assistance: government’s helpful building of roads and other infrastructure.

Like many of us, Donald Boudreaux criticizes the president’s philosophical assumptions. But he adds that Obama is also wrong to imply that it’s government which makes most or all of the infrastructure on which we rely.

“[A] great deal of infrastructure is built privately. FedEx, for example, is infrastructure: It’s a combination of vehicles, warehouses, organizational knowledge and other specific capital that businesses and households rely upon to transport freight and packages. . . .

“Of course, FedEx isn’t a road or a bridge. But so what? FedEx, no less than a road or bridge, enhances our abilities to pursue our private goals. [I]nfrastructure isn’t only those things supplied by government.”

Moreover, we don’t benefit from government’s monopolization of the segments of infrastructure provision that governments do monopolize. If government hadn’t permitted competition in packages from UPS, Fed-Ex and others, Obama could have added “you didn’t ship that package” to “you didn’t build that road.” But how could this justify disparaging individual achievement, or be anything to boast about? Government’s commandeering of enterprises reduces quality and alternatives.

The answer to “You didn’t build that,” if and when it’s true, is: “Well, let us.”

This is Common Sense. I’m Paul Jacob.