A Georgian Constitution of Economic Liberty
The former Soviet Republic of Georgia is a late economic reformer, having started such liberalization after the Rose Revolution in 2004. But it is one of the most successful post-Soviet reformers, and it may be the country that has implemented the largest range of serious market reforms in the shortest period of time. Its growth rate from 2004 through 2008 averaged 7.6 percent per year (which includes the comparatively low 2.1 percent rate of 2008 that resulted from the global financial crisis and the war with Russia).
Last month, the government submitted a draft act to Parliament that calls for amending the country’s constitution so that it would safeguard various elements of economic freedom. The amendments would put caps on public debt, spending and deficits; and ban any kind of price controls, state ownership of banks and financial institutions and restrictions on currency convertibility, and any kind of control over the movement of capital. New taxes or increases in tax rates would require approval through a national referendum.
With the possible partial exception of Hong Kong’s Basic Law, I’m not aware of any other constitution that explicitly enshrines economic freedom. I’m told by Georgian colleagues that prospects for passage of the law looks good, with the constitution being amended as early as next month.
“Freedom in Crisis” on YouTube
My “Freedom in Crisis” speech, which has gotten some compliments as I’ve delivered it in various venues, is now available on the web, complete with accompanying Powerpoint illustrations.
Find it also on the Cato site here. And a partial transcript (pdf) was printed in Cato’s Letter. (Get a free subscription to Cato’s Letter here.) And to hear speeches like this live, watch for details on the next Cato University, July 25-30, 2010, in San Diego.
The Other Side Plays Dirty
On the day that we honor veterans for defending our freedom, I read this:
Community groups and Los Angeles Unified officials on Tuesday condemned an anonymous flyer handed to Latino parents that threatened them with deportation if they supported plans to convert their neighborhood school to a charter.
Calling it an escalation in a series of “scare tactics,” district officials and community advocates said distribution of the flyer was timed to weaken one of LAUSD’s boldest efforts to reform public education in Los Angeles.
A generation or two from now, when children are studying how school choice began to spread throughout America, they will read of such incidents and marvel at the depths to which opponents sunk.
If you’re a policymaker or opinion leader, on which side of that history will you want your name to appear?
Tea Party Conservatism and the GOP
This morning, Politico’s Arena asks:
Is Tea Party conservatism a help or a hazard for Republicans seeking a return to power?
My response:
Let’s start with some clarity: “Tea Party conservatism” stands for several things, but it is not the caricature one often finds in the mainstream media, to say nothing of the left wing blogs. It is a movement with deep historical roots, drawing its name and inspiration from the Boston Tea Party of 1773. As with that event, taxes brought it to the fore — on Tax Day, April 15. But taxes are simply the most obvious manifestation of modern government run amok, insinuating itself into every corner of life. Trillions of dollars of debt for our children, out-of-control government budgets, massive interventions in private affairs — the list of wrongs is endless, and under Obama has exploded. He stands for nothing if not for making us all dependent on the government he has promised us. That’s not America. That’s a foreign vision, which over the centuries countless millions have fled, searching for freedom.
To be sure, the Tea Party movement has its fringe elements, as did the revolt against British tyranny, which the establishment of its day disparaged. So too does the Obama administration, some of whom have already resigned. The basic question, however, is what does the movement stand for? What are its principles? And on that, the contrast with the Obama vision is stark: However much confusion there might be on specific issues, which is to be expected, the broad principles are clear. The Tea Party movement stands for limited constitutional government. At its rallies, on hand-written sign after sign, that was the message repeatedly seen. These are ordinary Americans – Republicans, Independents, and even Democrats — who want simply to be left alone to plan and live their own lives. They don’t want “community organizers” to help empower them to get more from government.
But they do need to be organized to bring that about — to get government off their backs. And the Republican Party should be the natural vehicle toward that end — the party, after all, that was formed to get government off the backs of several million slaves. But today’s Republican Party is a mixed lot: Some understand those principles; but others, as in the NY 23 race, are all but indistinguishable from their counterparts in the party of Obama. The problem in NY 23 was not that a third party entered the race. Rather, the party establishment botched things from the beginning, by picking a nominee who properly belonged in the Democratic Party, as her pathetic last-minute endorsement indicated, and that’s why a third party entered the race — with a novice of a nominee who nearly won despite the odds against him.
The question, therefore, is not whether Tea Party conservatism is a help or a hazard for Republicans seeking a return to power? To the contrary, it is whether the Republican Party is a help or a hindrance to the Tea Party movement? It will be a help only if it returns to its roots. The mainstream media, overwhelmingly of the Democratic persuasion, will continue to push Republicans to be “moderate,” of course – meaning “Democrat Lite” — to which the proper response is: Why would voters go for that when they can get the real thing on the Democratic line? If Tuesday’s returns showed anything, it is that Independents, a truly mixed lot, are up for grabs; but at the same time, they are looking for leaders who promise not simply to “solve problems” but to do so in a way that respects our traditions of individual liberty, free markets, and limited government. When Republican candidates stand clearly and firmly for those principles, they stand a far better chance of being elected than when they temporize. That is the lesson that Republicans must grasp — and not forget — if they are to return to power.
Filed under: Government and Politics; Law and Civil Liberties
Wednesday Links
- How Washington’s plans may result in even higher executive pay.
“In 1993, Congress intervened in corporate compensation and messed things up. Now it’s the White House’s turn.”
- The case for allowing insider trading: “Want to keep companies honest, make the markets work more efficiently and encourage investors to diversify? Let insiders buy and sell.”
- Cato v. Heritage on the Patriot Act, Round III: “In hindsight, did Congress and the president react too hastily in 2001 by passing the Patriot Act just weeks after the 9/11 attacks?”
- Instead of fixing the Patriot Act, President Obama is protecting it.
- Twenty years later: Why the Berlin Wall fell.
- Podcast: “Financial Privacy and Freedom” featuring Prince Michael of Liechtenstein.
Freedom for Vietnam’s Bloggers
Today the House of Representatives is debating H. Res. 672, which would call on the government of Vietnam to release imprisoned bloggers and respect Internet freedom.
Here is an article or two about what is happening with Vietnamese bloggers.
Filed under: Foreign Policy and National Security; Law and Civil Liberties; Telecom, Internet & Information Policy
Totalitarian Leftovers in Eastern Europe
The Berlin Wall fell 20 years ago. A hideous symbol of the suppression of liberty, it should remind us of the ever-present threat to our freedoms. Even two decades later the legacy of repression continues to afflict many people in Eastern Europe. For instance, those in countries formerly behind the Iron Curtain still struggle with the knowledge that their friends and neighbors routinely spied on them.
Stelian Tanase found out when he asked to see the thick file that Romania’s communist-era secret police had kept on him. The revelation nearly knocked the wind out of him: His closest pal was an informer who regularly told agents what Tanase was up to.
“In a way, I haven’t even recovered today,” said Tanase, a novelist who was placed under surveillance and had his home bugged during the late dictator Nicolae Ceausescu’s regime.
“He was the one person on Earth I had the most faith in,” he said. “And I never, ever suspected him.”
Twenty years ago this autumn, communism collapsed across Eastern Europe. But its dark legacy endures in the unanswered question of the files — whether letting the victims read them cleanses old wounds or rips open new ones.
Things have never been so bad here, obviously, but that gives us even more reason to jealously guard our liberties. Defend America we must, but we must never forget that it is a republic which we are defending.
Filed under: Foreign Policy and National Security; Law and Civil Liberties; Political Philosophy
Technology: Debating the Pace of Progress
Last night, thanks to Craigslist and a Web-enabled cell phone, I unloaded two extra tickets to tonight’s World Cup qualifying game between the U.S. and Costa Rica in under an hour. (8:00, ESPN2 “USA! USA! USA!”)
Wanting to avoid the hassle of selling the tickets at RFK, I placed an ad on Craigslist offering them at cost, figuring I might find a taker and arrange to hand them off downtown today or at the stadium tonight. Checking email as I walked to the gym, I found an inquiry about the tickets and phoned the guy, who happened to live 100 feet from where I was walking. A few minutes later, he had the tickets and I had the cash.
This quaint story is a single data point in a trend line—the high-tech version of It’s Getting Better All the Time. Everyone living a connected life enjoys hundreds, or even thousands, of conveniences every day because of information technology. Through billions of transactions across the society, technology improves our lives in ways unimaginable two decades ago.
Before 1995, nobody ever traded spare soccer tickets in under an hour, on a Tuesday night, without even changing his evening routine. If soccer tickets are too trivial (you must not understand the game), the same dynamics deliver incremental, but massive improvements in material wealth, awareness, education, and social and political empowerment to everyone—even those who don’t live “online.”
Sometimes debates about technology regulation are cast in doom and gloom terms like the Malthusian arguments about material wealth. But the benefits we already enjoy thanks to technology are not going away, and they will continue to accrue. We are arguing about the pace of progress, not its existence.
This is no reason to let up in our quest to give technologists and investors the freedom to produce more innovations that enhance everyone’s well-being even more. But it does counsel us to be optimistic and to teach this optimism to our ideological opponents, many of whom seem to look ahead and see only calamity.
Sixty Years On, China Has Prosperity, Still Needs Freedom
China’s rise from an isolated state-controlled economy in 1949 to the world’s third largest economy with a vibrant nonstate sector is something to celebrate on the 60th anniversary of the founding of the People’s Republic of China.
Under Deng Xiaoping, China’s transition from plan to market began in earnest in December 1978. For more than 30 years now, China has gradually removed barriers to a market system and increased opportunities for voluntary exchanges. Special economic zones, the end of communal farming, the rise of township and village enterprises, and the massive increase in foreign trade have enabled millions of people to lift themselves out of abject poverty.
Economic freedom has increased personal freedom, but the Chinese Communist Party has no intention of giving up its monopoly on power. China’s future will depend to a large extent on the path of political reform. Further strengthening of private property rights, including land rights, would create new wealth and a growing voice for limiting the power of government. It is doubtful that in another 60 years there will be single-party rule in China.
Filed under: General; International Economics and Development
Liberals in Power
Will Saletan writes that he and his colleagues at Slate seem to be increasingly engaged in libertarian sallies at the food police and other nanny statists. “Are we becoming conservative?” he worries, wringing his hands. Not quite:
We’re what we were five or 10 years ago: skeptics and fact-mongers with a bias for personal freedom. It’s the left that’s turning conservative. Well, not conservative, but pushy. Weisberg put his finger on the underlying trend: “Because Democrats hold power at the moment, they face the greater peril of paternalistic overreaching.” Today’s morality cops are less interested in your bedroom than your refrigerator. They’re more likely to berate you for outdoor smoking than for outdoor necking. It isn’t God who hates fags. It’s Michael Bloomberg.
Yes, that’s the same Jacob Weisberg who wrote In Defense of Government and blamed libertarians for the financial collapse. Older and wiser every day.
When Saletan takes on the stretches that the fat-tax advocates have to make to justify government regulation of what we eat, he would have done well to cite Glen Whitman’s Cato paper on paternalism.
And as genuine liberals recoil in horror at the actions of liberals with power, it’s a good time to read Damon Root’s new Cato Policy Report cover story on liberals who fled “right” from the economic and constitutional malfeasance of the New Deal. Let’s hope Saletan’s “new Whiskey Rebellion” spreads beyond the pages of Slate.
HT: Jacob Grier.
Congress to Lift the Travel Ban to Cuba?
Bloomberg News reports today that the U.S. House may pass a bill by the end of the year lifting the almost five-decade-old ban on travel to Cuba by American citizens. The step is long overdue. According to the article:
A group of House and Senate lawmakers proposed in March ending restrictions to allow all U.S. citizens and residents to travel to Cuba. [Rep. Sam Farr, a California Democrat] said the legislation, known as the “Freedom to Travel to Cuba Act,” also has enough votes to clear the Senate, where Senator Byron Dorgan, a North Dakota Democrat, and Republican Senator Michael Enzi of Wyoming introduced the legislation.
As Rep. Farr succinctly added, “If you are a potato, you can get to Cuba very easily, but if you are a person, you can’t, and that is our problem.”
I rebut a lot of what Sen. Dorgan has said about free trade and globalization in my new book, Mad about Trade, but on the issue of the Cuban embargo and travel ban, Sen. Dorgan and most of his fellow Democrats are pushing in the right direction, while most Republicans still vote to maintain our failed policies. For more on why the travel ban and embargo should be lifted, read my speech at Rice University in 2005.
Here is one issue where those of use who support less government and more economic freedom really can hope for progressive change.
Why Chile Is More Economically Free Than the United States
In the 2009 Economic Freedom of the World Report, Chile is now #5, one place ahead of the United States.
In 1975, of 72 countries, Chile was No 71. How did this happen? The explanation lies in what I call the “Chilean Revolution,” because it was as important and transformative to my country as the celebrated American Revolution that gave birth to the United States.
The exceptional political circumstances of this period have obscured the fact that from 1975 to 1989 a true revolution took place in Chile, involving a radical, comprehensive, and sustained move toward economic and political freedom (from a starting point where there was neither one nor the other). This revolution not only doubled Chile’s historic rate of economic growth (to an average of 7% a year, 84-98), drastically reduced poverty (from 45% to 15%), and introduced several radical libertarian reforms that set the country on a path toward rapid development; but it also brought democracy, restored limited government, and established the rule of law.
In 1998, The Los Angeles Times described the importance of the Chilean Revolution to the world:
In a sense, it all began in Chile. In the early 1970s, Chile was one of the first economies in the developing world to test such concepts as deregulation of industries, privatization of state companies, freeing of prices from government control, and opening of the home market to imports. In 1981, Chile privatized its social-security system. Many of those ideas ultimately spread throughout Latin America and to the rest of the world. They are behind the reformation of Eastern Europe and the states of the former Soviet Union today… which demonstrates, once again, the awesome power of ideas.
The New Puritanism
H. L. Mencken described puritanism as “the haunting fear that someone, somewhere, may be happy.”
The new puritanism is the fear that someone, somewhere, may be learning.
The Minneapolis Star Tribune has a story today in which public school educationalists wring their hands over the fear that suburban whites may be getting a good education in charter schools. This, somehow, is perceived to be a bad thing for urban minority kids.
Um. No.
What is bad for any child is a paucity of high quality education options from which to choose. The focus of policymakers should be on ensuring that more and better education options are constantly coming within reach of all children, regardless of the contents of their parents’ wallets, the pigmentation of their skin, or their ethnic background. This, the research shows, can most reliably be achieved by harnessing the freedoms and incentives of a competitive education marketplace.
Can the charter school system create such a marketplace? Can it relentlessly spawn new excellent schools and scale up the established ones to reach a mass audience? For a discussion of those questions, drop by Cato on October 2nd.
Actually, Big Mistakes Are to Be Expected…
Cognitive scientist Dan Willingham has a helpful column on the WaPo’s “Answer Sheet” blog. In it, he notes that DC Public Schools advises its employees to teach to students’ ”diverse learning styles” (e.g. “auditory learners,” “visual learners,” etc.) despite the fact that research shows these categories are pedagogically meaningless.
But what really grabbed my attention was this comment: “a misunderstanding of a pretty basic issue of cognition is a mistake that one does not expect from a major school system. It indicates that the people running the show at DCPS are getting bad advice about the science on which to base policy.”
As cognitive scientists have been collecting and analyzing evidence on “learning styles” for generations, social scientists and education historians been doing the same for school systems. What these latter groups find is that it is perfectly normal for public school districts to be unaware of or even indifferent to relevant research and to make major pedagogical errors as a result. Furthermore, there is no evidence that large districts are any better at avoiding these pitfalls than smaller ones. If anything, the reverse is true.
Not only are such errors to be expected of public school systems, we can actually say why that is the case with a good degree of confidence: public schooling lacks the freedoms and incentives that, in other fields, both allow and encourage institutions to acquire and effectively exploit expert knowledge.
Districts such as Washington DC can persist year after year with abysmal test scores, abysmal graduation rates, and astronomical costs. That is because they have a monopoly on a vast trove of government k-12 spending. In the free enterprise system, behavior like that usually results in the failure of a business and its disappearance from the marketplace. So, in the free enterprise sector, it is indeed rare to see large institutions behaving in such a dysfunctional manner, because it would be difficult if not impossible for them to grow that big in the first place. Long before they could scale up on that level, they would lose their customers to more efficient, higher quality competitors.
So if we want to see the adoption and effective implementation of the best research become the norm in education, we have to organize schooling the same way we organize other fields: as a parent-driven competitive marketplace.
Monday Links
- Obama spoke on Wall Street today about increasing regulation of the American financial system. But did deregulation really cause the financial crisis?
- Burnt rubber: Obama’s decision to slap a 35 percent tariff on Chinese tires whiffs of senseless protectionism.
- According to the Economic Freedom in the World report, the U.S. was ranked the second-freest economy in 2000. It has fallen to 6th place this year.
- A bold exit strategy for Afghanistan.
- Why it’s time for the U.S. to start doing less abroad.
- Podcast: China’s economy is on track to be larger than the U.S. economy in a few years. Trade expert Dan Griswold says, “So what?”
Speaking at Cornell
I’ll be speaking for the Freedom and Free Societies Program at Cornell University next Thursday, September 10. Details here.
I’ll also be speaking at Vanderbilt and in Nashville on September 29. Details to come.
Hillary: The Movie
The Supreme Court is soon to hear a case that may drastically roll back campaign finance regulation in the United States:
The case involves “Hillary: The Movie,” a mix of advocacy journalism and political commentary that is a relentlessly negative look at Mrs. Clinton’s character and career. The documentary was made by a conservative advocacy group called Citizens United, which lost a lawsuit against the Federal Election Commission seeking permission to distribute it on a video-on-demand service. The film is available on the Internet and on DVD. The issue was that the McCain-Feingold law bans corporate money being used for electioneering.
The right position for the Court is that McCain-Feingold, and all other campaign finance regulation, constitutes unconstitutional limitation on free speech. This means reversing the Court’s 1974 Buckley v. Valeo decision, which held that government limits on campaign spending were unconstitutional but limits on contributions were not.
This distinction is meaningless. If it is OK for a millionaire to spend his own money promoting his own campaign, why can he not give that money to someone else, who might be a more effective advocate for that millionaire’s views, so that this other person can run for office?
More broadly, campaign finance regulation is thought control: it takes a position on whether money should influence political outcomes. Whether or not one agrees, this is only one possible view, and freedom of speech is meant to prevent government from promoting or discouraging particular points of view.
It would be a brave step for Court to reverse Buckley, but it is the right thing to do.
For more background on the case, watch this:
C/P Libertarianism, from A to Z
A New Book from David Boaz? Tax Tips for Democrats
Okay, well maybe Tax Tips for Democrats won’t ever make it to the publisher, but while speaking at Cato University this summer, David Boaz offered a few tips to any more Democrats with tax problems who are thinking about joining the current administration.
“Some people say the best thing about electing a Democratic president is all the back taxes we collect from their appointees,” says Boaz. “It helps to balance the budget.”
C-SPAN 2 will air Boaz’s talk on the state of freedom in America this Sunday at 11:30 AM EST.
“If You’re Not Having Fun Advocating for Freedom, You’re Doing it Wrong!”
The health care debate has catalyzed a wonderful national clash of cultures centering on freedom versus control. Here’s one example that’s both complex and delightful.
Progressive site TalkingPointsMemo ran a story yesterday about a man named “Chris” who carried a rifle outside an event in Phoenix at which President Obama appeared. “We will forcefully resist people imposing their will on us through the strength of the majority with a vote,” Chris said.
To many TPM readers, this kind of thing is self-evidently shocking and wrong: Carrying a weapon is inherently threatening, Second Amendment notwithstanding. And vowing to resist the properly expressed will of the majority—isn’t that an outrageous denial of our democratic values?
Well, . . . No. Our constitution specifically denies force to democratic outcomes that impinge on freedom of speech and religion, on bearing arms, and on the security of our persons, houses, papers, and effects, to name a few. Our constitution also tightly circumscribed the powers of the federal government. Those restrictions were breached without abiding the supermajority requirements of Article V, alas.
There are many nuances in this clash of cultures, and it’s fascinating to watch the battle for credibility. One ugly issue is preempted rather handily by the fact that Chris is African-American.
Next question, taken up by CNN: Was the interview staged? Hell, yeah! says Chris’ interviewer. And they know each other—big deal.
Finally, they were laughing and having a good time. Isn’t this serious? Yes, it is serious, says Chris’ interviewer, but “If you’re not having fun advocating for freedom, you’re doing it wrong!”
It’s a great line—friendly, in-your-face advocacy that might just succeed in familiarizing more Americans with the idea of living as truly free people.
Today Talking Points Memo is charging that the man who interviewed Chris was a prominent defender of a militia group in the 90s, some members of which were convicted of crimes. I know nothing of the truth or falsity of this charge, and I had never heard of the militia group, the interviewer, or his organization before today.
This struggle over credibility is all part of the battle between freedom and control that is playing itself out right now. It’s an exciting time, and a chance for many more Americans to learn about liberty and the people who live it.
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Filed under: Government and Politics; Law and Civil Liberties; Political Philosophy
Venezuela’s Assault on Freedom of the Press and Other Liberties
A Venezuelan court has prohibited Guillermo Zuloaga, president of Globovision Television, from traveling to Washington, D.C. where he was scheduled to deliver an address tomorrow at the Cato Institute. Zuloaga and his network have been openly critical of the Hugo Chavez government, and as a result have endured harassment from authorities as Chavez attempts to place television and radio networks under government control or shutter them completely.
As a result, the Cato forum will now feature the vice-president of Globovision TV, Carlos Alberto Zuloaga, and Rafael Alfonzo, president of CEDICE, Venezuela’s leading market-liberal think tank, with comment by Robert Rivard, of the Inter American Press Association. Mr. Alfonzo will discuss how CEDICE and other members of civil society are coming under increasingly serious government harassment for expressing views critical of the government.
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