Topic: Cato Publications

Spring Regulation Issue: Oil, Obamacare and Tech Innovation

This week, Cato released the Spring issue of Regulation.

The cover article, by economist Pierre Lemieux, argues that the recent oil price decline is at least partly the result of increased supply from the extraction of shale oil.  The increased supply allows the economy to produce more goods. This benefits some people, if not all of them.  Thus, contrary to some commentary in the press, cheaper oil prices cannot harm the economy as a whole.

A related article examines the dramatic increase in crude oil transported by trains and whether additional safety regulation of tank car design should be enacted.  Economist Feler Bose argues that companies have an incentive to reduce accidents to reduce insurance rates.  Thus less-obvious ways to prevent accidents, like better track maintenance, may be more cost-effective and undertaken voluntarily to reduce insurance costs.

The issue has three articles on health policy.  Cal State Northridge professor Shirley Svorny describes how state medical licensure boards do very little to discipline doctors who cause medical errors.  Instead, medical quality is created by the private decisions of individual hospitals to grant privileges to doctors to treat patients and the decisions of specialty boards, such as those that govern cardiology, to certify members as qualified.  A second article concludes that the regulation of electronic cigarettes is likely, even though the evidence for adverse health effects is thin, because a powerful coalition of existing cigarette companies and anti-smoking activists would benefit. A third article examines questionable legal maneuvering by states to implement aspects of the Affordable Care Act (Obamacare).

Finally, two articles describe the regulation of emerging technologies. The first, by Oxford’s Pythagoras Petratos, examines nanotechnology and argues that both the Food and Drug Administration and the Environmental Protection Agency are ill-suited to regulate this complex technology. This bureaucratic burden could slow nanotech innovation in the United States. The second article, by Henry Miller of the Hoover Institution, describes the regulation of so-called “biosimilar” drugs.  Biosimilars are “generic” versions of patented biologic drugs, which are produced by living cells through genetic engineering rather than the chemical reactions used to produce traditional patented and generic prescription drugs.  He concludes that clinical trials will be necessary to prove biosimilarity and thus “biosimilar” drugs will not be cheap like traditional generic drugs.

Learning the History of Liberty from the Encyclopedia of Libertarianism

In an interesting discussion of social change and especially the best ways to spread classical liberal ideas at Liberty Fund’s Online Library of Liberty, historian David M. Hart has high praise for the Encyclopedia of Libertarianism (published by Sage in conjunction with the Cato Institute):

The Encyclopedia of Libertarianism provides an excellent survey of the key movements, individuals, and events in the evolution of the classical liberal movement….

One should begin with Steve Davies’ “General Introduction,” pp. xxv-xxxvii, which is an excellent survey of the ideas, movements, and key events in the development of liberty, then read some of the articles on specific historical periods, movements, schools of thought, and individuals.

King v. Burwell Doesn’t Present a ‘Coercion’ Question

I have a post over at National Review Online’s Bench Memos blog that explains why, contrary to Supreme Court Justice Anthony Kennedy’s concerns, the King v. Burwell challengers’ interpretation of the Patient Protection and Affordable Care Act (a.k.a., PPACA, ACA, and ObamaCare) doesn’t coerce states. At least, not under the Court’s current tests for determining whether Congress is coercing states.

If you happen to be a busy Supreme Court justice, here’s a spoiler:

1. The ACA’s exchange provisions don’t penalize states. They let states make tradeoffs between taxes, jobs, and insurance coverage.

2. Roughly half of states appear to consider those costs tolerable. Prior to 2014, eight states voluntarily imposed this supposedly coercive penalty on themselves.

3. This “deal” is comparable to what the Court allowed in NFIB v. Sebelius. In NFIB, the Court allowed states collectively to turn down Medicaid subsidies for as many as 16 million poor people. The exchange provisions permit states to do the same for 16 million higher-income residents.

I have no objection to the Court lowering the bar for demonstrating that cooperative federalism programs coerce states. But the Court will have to lower the bar quite a bit to find the ACA’s exchange provisions coercive.

If you aren’t a busy Supreme Court justice, or even if you are, read the whole thing.

The Libertarian Mind Is Fareed Zakaria’s “Book of the Week”

On CNN’s GPS, Fareed Zakaria declared The Libertarian Mind “the Book of the Week.” Here’s the transcript:

This week’s book of the week is David Boaz’s “The Libertarian Mind: A Manifesto for Freedom.” People often wonder what it means when someone describes himself or herself as a libertarian. And that includes people like Rand Paul, Alan Greenspan and Peter Thiel. David Boaz does a superb job of explaining the ideas that animate an important philosophical tradition, and he does it with passion. For anyone interested in politics, this is a valuable resource and a well-written book.

And here’s the 30-second video:

The show ran last Sunday, so today is probably the last day of its reign as “Book of the Week.” Buy The Libertarian Mind today.

Ukraine Hyperinflates

Since the New Year, Ukraine’s currency – the hryvnia – has collapsed, losing 51 percent of its value against the U.S. dollar. To put this rout into perspective, consider that the Russian ruble has only lost 8 percent against the greenback during the same period.

Like night follows day, the hryvnia’s meltdown has resulted in a surge of inflation. The last official Ukrainian year-over-year inflation rate is 28.5 percent. This rate was reported for January and is out of date. That said, the official inflation rate has consistently and massively understated Ukraine’s brutal inflation. At present, Ukraine’s implied annual inflation rate is 272 percent. This is the world’s highest inflation rate, well above Venezuela’s 127 percent rate (see the accompanying chart).

When inflation rates are elevated, standard economic theory and reliable empirical techniques allow us to produce accurate inflation estimates. With free market exchange-rate data (usually black-market data), the inflation rate can be calculated. Indeed, the principle of purchasing power parity (PPP), which links changes in exchange rates and changes in prices, allows for a reliable inflation estimate.

To calculate the inflation rate in Ukraine, all that is required is a rather straightforward application of a standard, time-tested economic theory (read: PPP). At present, the black-market UAH/USD exchange rate sits at 33.78. Using this figure and black-market exchange rate data that the Johns Hopkins-Cato Institute for Troubled Currencies Project has collected over the past year, I estimate Ukraine’s current annual inflation rate to be 272 percent – and its monthly inflation rate to be 64.5 percent. This rate exceeds the 50 percent per month threshold required to qualify for hyperinflation. So, if Ukraine sustains its current monthly rate of inflation for several more months, it will enter the record books as the world’s 57th hyperinflation episode. 

The Libertarian Reader Presents the Best Thinking about Liberty over Three Millennia

The Libertarian ReaderSimon & Schuster has just published The Libertarian Reader: Classic & Contemporary Writings from Lao-Tzu to Milton Friedman, which I edited. Buy it now from any good bookseller!

Just look at some of the great thinkers included in The Libertarian Reader:

  • Lao-Tzu
  • Richard Overton
  • John Locke
  • Adam Smith
  • David Hume
  • Thomas Paine
  • Thomas Jefferson
  • Mary Wollstonecraft
  • Alexis de Tocqueville
  • Frederic Bastiat
  • John Stuart Mill
  • Frederick Douglass
  • Angelina Grimke
  • Herbert Spencer
  • Ludwig von Mises
  • F. A. Hayek
  • Ayn Rand
  • Murray Rothbard
  • Milton Friedman
  • Robert Nozick
  • Richard Epstein
  • Mario Vargas Llosa

When the first edition was published in 1997, Laissez Faire Books called it “The most magnificent collection of libertarian writings ever published.” In this edition, Tom G. Palmer’s magisterial guide to “The Literature of Liberty” has been updated to include important libertarian books published in the 21st century. That essay alone is worth the price of the book!

Buy it together with The Libertarian Mind at an incredible discount.

The Libertarian Mind in the News

I’ve been busy talking up the libertarian moment, libertarian ideas, and The Libertarian Mind (buy it now, available everywhere) in person and in print lately. Here are a few recent examples.

My article on America’s libertarian roots in Sunday’s Philadelphia Inquirer:

Indeed, the principles of the Declaration are so closely associated with libertarianism that the Chinese edition of my previous book, Libertarianism: A Primer, features a cover photograph of the famous room in Independence Hall, complete with Windsor chairs and green tablecloths.

Libertarianism is the philosophy of freedom. It has, in different form throughout history, inspired people who fought for freedom, dignity, and individual rights - the early advocates of religious tolerance, the opponents of absolute monarchy, the American revolutionaries, the abolitionists, antiwar advocates and anti-imperialists, opponents of National Socialism and communism.

The next day, Nick Gillespie interviewed me at the National Constitution Center in Philadelphia. Video here.

My article “Black History Is American History” at HuffingtonPost:

Black history is American history, a story of oppression and liberation rooted in the libertarian idea of individual rights. Much of the progress we have made in the United States has involved extending the promises of the Declaration of Independence – life, liberty and the pursuit of happiness – to more and more people. The emphasis on the individual mind in the Enlightenment, the individualist nature of market capitalism and the demand for individual rights that inspired the American Revolution naturally led people to think more carefully about the nature of the individual and gradually to recognize that the dignity of individual rights should be extended to all.

And my interview with African American Conservatives.

My print interview yesterday with Salon:

Where am I the most optimistic? I am optimistic that around the world more and more people are moving into a world of property rights, markets, globalization, human rights, women’s rights, access to information and opportunity. Now that’s obviously not true everywhere; there are, at any given moment, unfortunate setbacks in Venezuela and Russia and some of Eastern Europe. But I do think the largest historical trend of our time is the move in a broadly libertarian direction, and therefore toward a higher standard of living for billions of people around the world.

Are you thinking of the growing middle class in China and India when you say this?

Absolutely. The change in economic conditions in China and India — right there you got one-third of the world. But also there have been some advances in the direction of human rights in Africa as well. So in a great deal of the world, you’ve seen a huge reduction in poverty and absolute poverty, and a rising middle class in many of these countries.

Interviews with Jim Bohannon, Garland Robinette, Bill Frezza, and others can be found here.

Buy the book!

 

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