Cakes and Liberty

Mark David Hall yesterday posted “Phillips Likely to Win Masterpiece Cakeshop Case, Five Votes to Four” at Law & Liberty. I fervently hope that Phillips wins, and by a greater margin than 5-4 (though that’s probably too much to hope for).

I must say, however, that I do not much care for the First-Amendment grounding of Phillips’s case. As Hall points out, Phillips was found guilty of violating Colorado’s public accommodation statute by the state’s Civil Rights Commission when he refused to provide a cake for a same-sex wedding.

And therein lies the real injustice, which stems from the Civil Rights Act of 1964. That law (among several things) prohibits racial discrimination in “public accommodations“, which are

generally defined as facilities, both public and private, used by the public. Examples include retail stores, rental establishments and service establishments as well as educational institutions, recreational facilities, and service centers.

What is going on with Masterpiece Cakeshop, and similar cases involving florists and photographers, is what has been going on since the enactment of the Civil Rights Act of 1964 and the U.S. Supreme Court’s subsequent rulings to uphold the law: the abrogation of property rights, liberty of contract, and freedom of association.

The only excuse for pursing Phillips’s cause as a First Amendment issue is that it is far too late to restore property rights, liberty of contract, and freedom of association — all of which have been smothered by the dense web of legislative, executive, and judicial decrees that suppresses liberty in the name of liberty.

Freedom of speech and freedom of religion are hanging on by the barest of threads. If Phillips loses in the Supreme Court, they will go the way of property rights, liberty of contract, and freedom of association.


Related posts:
Substantive Due Process, Liberty of Contract, and the States’ Police Power
The Constitution: Original Meaning, Corruption, and Restoration
Our Perfect, Perfect Constitution
Restoring Constitutional Government: The Way Ahead
“We the People” and Big Government
Getting “Equal Protection” Right
The Writing on the Wall
How to Protect Property Rights and Freedom of Association and Expression
The Principles of Actionable Harm
Judicial Supremacy: Judicial Tyranny
The Beginning of the End of Liberty in America
Substantive Due Process, Liberty of Contract, and States’ “Police Power”
Why Liberty of Contract Matters
The Answer to Judicial Supremacy
There’s More to It Than Religious Liberty
Turning Points
Equal Protection in Principle and Practice
Freedom of Speech and the Long War for Constitutional Governance
Equality
Academic Freedom, Freedom of Speech, and the Demise of Civility

How to Protect Property Rights and Freedom of Association and Expression

Opposition to Indiana’s Religious Freedom Restoration Act is more than another battle in the culture war. It continues a trend that began with the passage of the Civil Rights Act of 1964: suppression of the rights of Americans to use their property as they see fit, to associate with whom they please, and to oppose elite opinion. (UPDATE 04/02/15: John Derbyshire puts a lot of flesh on the bare bones of the preceding sentences. By contrast, Andrew Napolitano — that pseudo-libertarian windbag — manages to get it wrong, as usual, by praising the Civil Rights Act of 1964 and its theft of property rights and denial of freedom of association. UPDATE 04/05/15: Warren Meyer cuts through the baloney.)

It is past time to put a stop to the trend. Liberty-loving Americans should fight back by pushing for a constitutional amendment like this:

1. Neither the United States nor any State, including its political subdivisions and educational institutions, may require any governmental entity or private person, business, or organization to discriminate against any person solely on account of that person’s age, gender, sexual preference, race, color, national origin, mental or physical condition, veteran status, political affiliation, or political views. [This is how Jim Crow laws should have been dealt with. “Solely” is meant to leave room for reasonable exceptions, such as mental qualifications for admission to a university, physical qualifications for jobs, and gender segregation in prisons and restrooms. Clauses of elaboration might be necessary.]

2. Neither the United States nor any State, including its political subdivisions and educational institutions, may require any governmental entity or private person, business, organization to sell property to, do business with, hire, promote, accept as a student, associate with, or give preference to any person, business, or organization on account of income, age, gender, sexual preference, race, color, national origin, mental or physical condition, veteran status, political affiliation, or political views. [This would rule out all kinds of preferences, including favoritism toward often-bogus minority- and women-owned business and relaxed lending practices of the kind that led to the Great Recession.]

3. Neither the United States nor any State, including its political subdivisions and educational institutions, shall initiate or continue in effect any statute, regulation, policy, or judicial decree that penalizes a private person, business, or organization for expressing a view about a person’s age, gender, sexual preference, race, color, national origin, mental or physical condition, veteran status, political affiliation, or political views. [Clauses of elaboration might be necessary to ensure that this doesn’t rule out such things as prosecutions for espionage and treason, or private actions for libel.]

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Related posts:
Academic Bias
Intellectuals and Capitalism
“Intellectuals and Society”: A Review
The Left’s Agenda
The Left and Its Delusions
The Spoiled Children of Capitalism
Politics, Sophistry, and the Academy
Subsidizing the Enemies of Liberty
Are You in the Bubble?
Not-So-Random Thoughts
The Culture War
Ruminations on the Left in America
No Wonder Liberty Is Disappearing

Signature

Surrender? Hell No!

About six weeks ago, Ross Douthat — the truly conservative columnist at The New York Times (as opposed to David Brooks) — conceded surrender in the battle over same-sex “marriage”:

It now seems certain that before too many years elapse, the Supreme Court will be forced to acknowledge the logic of its own jurisprudence on same-sex marriage and redefine marriage to include gay couples in all 50 states.

Once this happens, the national debate essentially will be finished, but the country will remain divided, with a substantial minority of Americans, most of them religious, still committed to the older view of marriage.

So what then? One possibility is that this division will recede into the cultural background, with marriage joining the long list of topics on which Americans disagree without making a political issue out of it.

In this scenario, religious conservatives would essentially be left to promote their view of wedlock within their own institutions, as a kind of dissenting subculture emphasizing gender differences and procreation, while the wider culture declares that love and commitment are enough to make a marriage. And where conflicts arise — in a case where, say, a Mormon caterer or a Catholic photographer objected to working at a same-sex wedding — gay rights supporters would heed the advice of gay marriage’s intellectual progenitor, Andrew Sullivan, and let the dissenters opt out “in the name of their freedom — and ours.”

But there’s another possibility, in which the oft-invoked analogy between opposition to gay marriage and support for segregation in the 1960s South is pushed to its logical public-policy conclusion. In this scenario, the unwilling photographer or caterer would be treated like the proprietor of a segregated lunch counter, and face fines or lose his business — which is the intent of recent legal actions against a wedding photographer in New Mexico, a florist in Washington State, and a baker in Colorado….

… We are not really having an argument about same-sex marriage anymore, and … we’re not having a negotiation. Instead, all that’s left is the timing of the final victory — and for the defeated to find out what settlement the victors will impose. (“The Terms of Our Surrender,” March 2, 2014)

Well, it didn’t take long to learn the terms of surrender. (Not that it wasn’t obvious, given the cases of the florist in Washington and the baker in Colorado.) There is a strident branch of gay activism — backed by the usual “liberal” and “libertarian” suspects — that will brook nothing less than the surrender of fundamental rights: freedom of association, freedom of contract, and freedom of speech. The cases in Washington and Colorado are evidence of efforts to deny freedom of association and freedom of contract. Then came the full-blown attack on freedom of speech, with the ouster of Brandon Eich from his job as CEO of Mozilla because six years ago he donated $1,000 to California’s Prop 8 ballot initiative reaffirming traditional marriage.  (See the links at the bottom of this post for more about the Eich affair and its implications.)

What else would you expect, given the precedent of the “civil rights” movement? In the name of “civil rights,” Americans have long been forced to associate with and hire persons whose main qualification is the color of their skin. As for speech, no CEO of any consequence would dare say anything in public (or private) about the difficulty of finding qualified black employees, despite the demonstrably lower intelligence of blacks and their above-average proclivity for criminal behavior. The typical CEO will instead tell his minions to make the workplace look like the “face of America,” regardless of the impossibility of doing so without ripping off taxpayers, shareholders, and customers.

Why? Because honesty about the reasons for failing to meet racial quotas would cause the wrath of the Civil Rights Division and the Equal Employment Opportunity Commission to be visited upon the CEO’s corporation. And you can be sure that the worthies in those thought-crime agencies are polishing their truncheons in anticipation of the day when the failure to meet a government-imposed gay quota becomes a crime. Brendan Eich’s fate at the hands of private actors is but a hint of the things that will come at the hands of state actors.

Anyone who lived through the “civil rights” forced equality movement with open eyes could see where the “gay rights” movement would lead, long before its victory became evident to Ross Douthat. I certainly did. See, for example, “In Defense of Marriage” (May 26, 2011), “The Myth That Same-Sex ‘Marriage’ Causes No Harm” (October 14, 2011), and the posts and readings linked therein. This is from “In Defense of Marriage”:

The recognition of homosexual “marriage” by the state — though innocuous to many, and an article of faith among most libertarians and liberals — is another step down the slippery slope of societal disintegration. The disintegration began in earnest in the 1930s, when Americans began to place their trust in chimerical, one-size-fits-all “solutions” offered by power-hungry, economically illiterate politicians and their “intellectual” enablers and apologists. In this instance, the state will recognize homosexual “marriage,” then bestow equal  benefits on homosexual “partners,”  and then require private entities (businesses, churches, etc.) to grant equal benefits to homosexual “partnerships.” Individuals and businesses who demur will be brought to heel through the use of affirmative action and hate-crime legislation to penalize those who dare to speak against homosexual “marriage,” the privileges that flow from it, and the economic damage wrought by those privileges.

It should be evident to anyone who has watched American politics that even-handedness is not a matter of observing constitutional limits on government’s reach, regardless of who asks for an exception; it is, rather, a matter of expanding the privileges bestowed by government so that no one is excluded. It follows that the recognition and punitive enforcement of same-sex “marriage” would be followed by the recognition and bestowal of benefits on other arrangements, including transient “partnerships” of convenience. And that surely will weaken heterosexual marriage, which is the axis around which the family revolves. The state will be saying, in effect, “Anything goes. Do your thing. The courts, the welfare system, and the taxpayer — above all — will pick up the pieces.” And so it will go.

The day is coming — and it’s not far off — when it will be illegal to refuse to associate with, do business with, or hire anyone for any reason that Congress, the executive, or the courts deem unacceptable. This will have two predictable effects. It will further dampen entrepreneurial enthusiasm, which has already taken big hits, thanks to the expansion of the regulatory-welfare state. And it will further divide Americans from each other (see Michael Jonas, “The Downside of Diversity,” boston.com, August 5, 2007).

The U.S. Supreme Court to the contrary notwithstanding, I will never recognize same-sex “marriage” as a valid institution. I refuse to cede an inch in the culture war.

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Related reading:
Seth Mandel, “Brendan Eich, the Culture Wars, and the Ground Shifting beneath Our Feet,” Commentary, April 4, 2014
Jonathan S. Tobin, “Mozilla Has Rights, Just Like Hobby Lobby,” Commentary, April 7, 2014
Scott Johnson, “Roots of Totalitarian Liberalism,” Powerline Blog, April 7, 2014
Jordan Lorence, “Supreme Court Turns Down Elane Photography,” National Review Online, Bench Memos, April 7, 2014
Mollie Hemingway, “The Rise of the Same-Sex Marriage Dissidents,” The Federalist, April 8, 2014
Patrick J. Buchanan, “The New Blacklist,” Taki’s Magazine, April 8, 2014
Ed Morrisey, “Eich, Intolerance, and the Growing Demand for Absolutism,” Hot Air, April 8, 2014
Nicholas James Pell, “The Care Bears vs. McCarthy,” Taki’s Magazine, April 8, 2014
Stella Morabito, “Bait and Switch: How Same-Sex Marriage Ends Family Autonomy,” The Federalist, April 9, 2014
Robert Oscar Lopez, “Stop Crying over Mozilla and Start Fighting Back!,” American Thinker, April 14, 2014
Bill Zeiser, “We Are All Charles Murray,” The American Spectator, April 25, 2014

Other related posts at this blog: Take your pick of the many listed here, here, and here.

 

Rights: Source, Applicability, How Held

Rights are behavioral norms that circumscribe the actions that may (or should) be taken with respect to a person, his property, and his pursuits.* Other behavioral norms are customs that an individual may or may not observe, and the non-observance of which may have social repercussions.

The precise scope of an individual’s rights and ability to exercise them depends on

  • whence they derive (source)
  • whether they apply universally or to specific groups of persons (applicability)
  • whether they are held by the persons to whom they apply or are granted by others (how held)
  • the effects of state action of the exercise of rights that would (or would not) be recognized by common consent.

There are certain predictable patters of belief about relationships among the first three attributes of rights: source, applicability, and how held. That is to say, where beliefs about rights are unforced by state action, persons who believe in God-given rights tend to think of them as universal and innate in the persons to whom they apply; persons who believe in rights as “things” with an existence of their own (Platonic ideals) tend to think of them as universal and innate in the persons to whom they apply; and so on, as outlined in the table below. As indicated, the state can (and does) shape and apply rights differently than would be the case if they were described and defined by like-minded persons.

Extreme libertarians — who tend to be both atheists and absolutists — often view rights as Platonic essences. Those who understand that they have subscribed to a supernatural explanation of rights then turn to biological evolution, which is their God-substitute.

For my own part, I take the indefiniteness of rights as evidence that they are the products of social evolution — or would be if it were not for interference by the state. Rights, as products of social evolution, are strictures on interpersonal behavior, not “essences” that emanate from individuals. Rights, therefore, are culturally variable in their precise contours, but certain constants of human nature (empathy, self-interest) lead most cultures in the direction of a modus vivendi like the Golden Rule. These observations apply to socially evolved rights, not to the rights that arise (or are denied) by the intervention of the state and persons or groups (e.g., warlords) with state-like power.
__________
* This definition implies that rights are negative. As I say here,

rights can’t be rights if they can’t be held universally, without cost to others. The right not to be murdered is such a right; the right to live on the public dole is not. We can, in theory, forbear from murdering each other, but we cannot all be on the public dole except (possibly) at different times. And even then we must impose on others (including those who would prefer to be on the public dole at the same time).

All of this is a way of stating  the doctrine of negative rights, which is the basis of libertarianism. But negative rights can’t be applied universally if there are some holdouts who want others to give to them without having to give to others….

Positive rights — the “right” to be on the dole, etc. — are, in this day, state-created rights. Positive rights, under the state, require compulsion.

There can be positive rights by common consent, but that is possible only in relatively small communities. As I say here,

self-governance by mutual consent and mutual restraint — by adherence to the Golden Rule — is possible only for a group of about 25 to 150 persons: the size of a hunter-gatherer band or Hutterite colony. It seems that self-governance breaks down when a group is larger than 150 persons.

Adherence to the Golden Rules implies voluntary aid to others, not only out of love and empathy but also in the self-interested expectation of reciprocal treatment. But the Golden Rule can be a rule of coexistence — rather than a mere admonition — only for relatively small groups.

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Related posts:
On Liberty
Greed, Cosmic Justice, and Social Welfare
Positive Rights and Cosmic Justice
Parsing Political Philosophy
Negative Rights
Negative Rights, Social Norms, and the Constitution
Rights, Liberty, the Golden Rule, and the Legitimate State
The Unreality of Objectivism
“Natural Rights” and Consequentialism
More about Consequentialism
Line-Drawing and Liberty
Pseudo-Libertarian Sophistry vs. True Libertarianism
Positivism, “Natural Rights,” and Libertarianism
What Are “Natural Rights”?
The Golden Rule and the State
Libertarian Conservative or Conservative Libertarian?
Liberty, Equality, Fraternity: Part I
Evolution, Human Nature, and “Natural Rights”
Social Justice
More Pseudo-Libertarianism
The Meaning of Liberty
Positive Liberty vs. Liberty
More Social Justice
On Self-Ownership and Desert
Luck-Egalitarianism and Moral Luck
Understanding Hayek
The Left and Its Delusions
The Golden Rule as Beneficial Learning
Facets of Liberty
Burkean Libertarianism
Crimes against Humanity

A Short Course in Economics

In which I begin with pithy statements of principles and work my way toward more complex (but brief) explorations of selected economic issues.

1. Self-interest drives us to do good things for others while striving to do well for ourselves.

2. Profit is good because it entices invention, innovation, and investments that yield new and better products and services.

3. Incentives matter: Just as self-interest and profit drive progress, taxation and regulation stifle it.

4. Only slaves and dupes can be exploited. (Wal-Mart employees are not exploited; they are not forced to work at Wal-Mart. Anti-Wal-Mart activists are exploited; they’re dupes of the anti-business Left.)

5. There is no free lunch, all costs (including taxes) must be covered by someone, somewhere, at some time.

6. The appearance of a free lunch (e.g., Social Security, tax-subsidized health insurance) leads individuals to make bad decisions (e.g., not saving enough for old age, overspending on health care).

7. Paternalism is for children: When adults aren’t allowed to make economic decisions for themselves they don’t learn from mistakes and can’t pass that learning on to their children.

8. All costs matter; one cannot make good economic decisions by focusing on one type of cost, such as the cost of energy.

9. The best way to deal with pollution and the “depletion” of natural resources is to assign property rights in resources now held in common. The owners of a resource have a vested interest (a) in caring for it so that it remains profitable, and (b) in raising its price as it becomes harder to obtain, thus encouraging the development of alternatives.

10. Discrimination is inevitable in a free society; to choose is to discriminate. In free and competitive markets — unfettered by Jim Crow, affirmative action, or other intrusions by the state — discrimination is most likely to be based on the value of one’s contributions.

11. Voluntary exchange is a win-win game for workers, consumers, and businesses. When exchange is distorted by taxation and constrained by regulation, the losers are workers (fewer jobs and lower wages) and consumers (higher prices and fewer choices).

12. Absent force or fraud, we earn what we deserve, and we deserve what we earn.

13. The economy isn’t a zero-sum game; for example:

Bill Gates is immensely wealthy because he took a risk to start a company that has created things that are of value to others. His creations (criticized as they may be) have led to increases in productivity. As a result, many people earn more than they would have otherwise earned; Microsoft has made profits; Microsoft’s share price rose considerably for a long time; Bill Gates became the wealthiest American (someone has to be). That’s win-win.

14. Externalities are everywhere.

Like the butterfly effect, everything we do affects everyone else. But with property rights those externalities (e.g., pollution) are compensated instead of being legislated against or fought over in courts. Relatedly . . .

15 . There is no such thing as a “public good.”

Public goods are thought to exist because certain services benefit “free riders” (persons who enjoy a service without paying for it). It is argued that, because of free riders, services like national defense be provided by government because it would be unprofitable for private firms to offer such services.

But that analysis overlooks the possibility that those who stand to gain the most from the production of a service such as defense may, in fact, value that service so highly that they would be willing to pay a price high enough to bring forth private suppliers, free riders notwithstanding. The free-rider problem isn’t really a problem unless the producer of a “public good” responds to requests for additional services from persons who don’t pay for those services. But private providers would not be obliged to respond to such requests.

Moreover, given the present arrangement of the tax burden, those who have the most to gain from defense and justice (classic examples of “public goods”) already support a lot of free riders and “cheap riders.” Given the value of defense and justice to the orderly operation of the economy, it is likely that affluent Americans and large corporations — if they weren’t already heavily taxed — would willingly form syndicates to provide defense and justice. Most of them, after all, are willing to buy private security services, despite the taxes they already pay.

I conclude that there is no “public good” case for the government provision of services. It may nevertheless be desirable to have a state monopoly on police and justice — but only on police and justice, and only because the alternatives are a private monopoly of force, on the one hand, or a clash of warlords, on the other hand. (See this post, for instance, which also links to related posts.)

You may ask: What about environmental protection? Isn’t it a public good that must be provided by government? No. Read this and this. Which leads me to “market failure.”

16. There is no such thing as “market failure.

The concept of market failure is closely related to the notion of a public good. When the market “fails” to do or prevent something that someone thinks should be done or prevented, the “failure” is invoked as an excuse for government action.

Except where there is crime (which should be treated as crime), there is no such thing as market failure. Rather, there is only the failure of the market to provide what some persons think it should provide.

Those who invoke market failure are asserting that certain social and economic outcomes should be “fixed” (as in a “fixed” boxing match) to correct the “mistakes” and “oversights” of the market. Those who seek certain outcomes then use the political process to compel those outcomes, regardless of whether those outcomes are, on the whole, beneficial. The proponents of compulsion succeed (most of the time) because the benefits of government intervention are focused and therefore garner support from organized constituencies (i.e. interest groups and voting blocs), whereas the costs of government intervention are spread among taxpayers and/or buyers of government debt.

There are so many examples of so-called public goods that arise from putative market failures that I won’t essay anything like a comprehensive list. There are, of course, protective services and environmental “protection,” both of which I mentioned in No. 15. Then there is public education, Social Security, Medicare, Medicaid, Affirmative Action, among the myriad federal, State, and local programs that perversely make most people worse off, including their intended beneficiaries. Arnold Kling explains:

[T]he Welfare State makes losers out of people who want to get ahead through hard work, thrift, or education. Those are precisely the activities that produce economic growth and social wealth, and they are hit particularly hard by Welfare State redistribution.

The Welfare State certainly has well-organized constituencies. The winners, such as the AARP and the teachers’ unions, know who they are. The losers — the working poor, children stuck in low-quality school districts — have much less political clout. The Welfare State has friends in both parties, as evidenced by the move to add a prescription drug benefit to Medicare.

As the Baby Boomers age, longevity increases, and new medical technology is developed, the cost of the Welfare State is going to rise. Economists agree that in another generation the share of GDP required by the Welfare State will exceed the share of GDP of total tax revenues today. The outlook for the working poor and other Welfare State losers is decidedly grim.

17. Borders are irrelevant, except for defense.

It is not “bad” or un-American to “send jobs overseas” or to buy goods and services that happen to originate in other countries. In fact, it is good to do such things because it means that available resources can be more fully employed and put to their best uses. Opponents of outsourcing and those who decry trade deficits want less to be produced; that is, they want to shelter the jobs of some Americans at the expense of making many more Americans worse off through higher prices.

For example, when Indian computer geeks operate call centers for lower salaries than the going rate for American computer geeks, it makes both Indians and Americans better off. Few Americans are computer geeks, but many Americans are computer users who benefit when they pay less for geek services (or the products with which geek services are bundled). Those who want to save the jobs of American computer geeks assume that (a) American computer geeks “deserve” their jobs (but Indians don’t) and (b) American computer geeks “deserve” their jobs at the expense of American consumers.

See also this, and this, and this.

18. Government budget deficits aren’t bad for the reason you think they’re bad.

Government spending is mostly bad (see No. 15) because it results in the misallocation of resources (and it’s inherently inflationary). Government spending — whether it is financed by taxes or borrowing — takes resources from productive uses and applies them to mostly unproductive and counterproductive uses. Government budget deficits are bad in that they reflect that misallocation — though they reflect only a portion of it. Getting hysterical about the government’s budget deficit (and the resulting pile of government debt) is like getting hysterical about a hangnail on an arm that has been amputated.

There’s no particular reason the federal government can’t keep on making the pile of debt bigger — it has been doing so continuously since 1839. As long as there are willing lenders out there, the amount the amount of debt the government can accumulate is virtually unlimited, as long as government spending does not grow to the point that its counterproductive effects bring the economy to its knees.

For more, see this, this, this, and this.

19. Monopoly (absent force, fraud, or government franchise) beats regulation, every time.

Regulators live in a dream world. They believe that they can emulate — and even improve on — the outcomes that would be produced by competitive markets. And that’s precisely where regulation fails: Bureaucratic rules cannot be devised to respond to consumers’ preferences and technological opportunities in the same ways that markets respond to those things. The main purpose of regulation (as even most regulators would admit) is to impose preferred outcomes, regardless of the immense (but mostly hidden) cost of regulation.

There should be a place of honor in regulatory hell for those who pursue “monopolists,” even though the only true monopolies are run by governments or exist with the connivance of governments (think of courts and cable franchises, for example). The opponents of “monopoly” really believe that success is bad. Those who agitate for antitrust actions against successful companies — branding them “monopolistic” — are stuck in a zero-sum view of the economic universe (see No. 13), in which “winners” must be balanced by “losers.” Antitrusters forget (if they ever knew) that (1) successful companies become successful by satisfying consumers; (2) consumers wouldn’t buy the damned stuff if they didn’t think it was worth the price; (3) “immense” profits invite competition (direct and indirect), which benefits consumers; and (4) the kind of innovation and risk-taking that (sometimes) leads to wealth for a few also benefits the many by fueling economic growth.

What about those “immense” monopoly profits? They don’t just disappear into thin air. Monopoly profits (“rent” in economists’ jargon) have to go somewhere, and so they do: into consumption, investment (which fuels economic growth), and taxes (which should make liberals happy). It’s just a question of who gets the money.

But isn’t output restricted, thus making people generally worse off? That may be what you learned in Econ 101, but that’s based on a static model which assumes that there’s a choice between monopoly and competition. I must expand on some of the points I made in the original portion of this commandment:

  • Monopoly (except when it’s gained by force, fraud, or government license) usually is a transitory state of affairs resulting from invention, innovation, and/or entrepreneurial skill.
  • Transitory? Why? Because monopoly profits invite competition — if not directly, then from substitutes.
  • Transitory monopolies arise as part of economic growth. Therefore, such monopolies exist as a “bonus” alongside competitive markets, not as alternatives to them.
  • The prospect of monopoly profits entices more invention, innovation, and entrepreneurship, which fuels more economic growth.

20. Stay tuned to this blog.