Topic: Cato Publications

George Smith’s Long-Awaited Book: The System of Liberty

The System of LibertyGeorge H. Smith is one of the best-read, most insightful libertarians living today. He is the author of most of the Cato University Home Study Course, which you should definitely download. He writes a weekly article for Libertarianism.org titled “Excursions into the History of Libertarian Thought.” He is the author of Atheism: The Case Against God (1974), Atheism, Ayn Rand, and Other Heresies (1991), and audio series on “Great Political Thinkers,” “The Meaning of the U.S. Constitution,” and “The Ideas of Liberty.” And finally – finally – he has been persuaded to write down much of what he knows about the history of classical liberal thought in a new book from the Cato Institute and the Cambridge University Press, The System of Liberty: Themes in the History of Classical Liberalism.

It’s a great study of classical liberalism and the relations among such liberal ideas as individualism, natural rights, utilitarianism, self-sovereignty, and what Lord Acton called “the polar star of liberty.” Along the way he answers such criticisms of liberalism as “atomistic individualism” and “social Darwinism.” It’s a college course in political philosophy in just 217 very readable pages. Buy it now for the low low price of $24.95.

Obama on Perpetual War: Less “Hope,” More Handwringing

There was something almost otherworldly about President Obama’s big national security speech last Tuesday at the National Defense University in DC. At times, Obama seemed to position himself as the loyal opposition to his own administration—or just one of many concerned citizens who worry that perpetual war “will prove self-defeating, and alter our country in troubling ways.” A few examples from the speech:

Look at the current situation [at Gitmo], where we are force-feeding detainees who are being held on a hunger strike…. Is this who we are?  Is that something our Founders foresaw?  Is that the America we want to leave our children? 

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I’m troubled by the possibility that leak investigations may chill the investigative journalism that holds government accountable.

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Unless we discipline our thinking, our definitions, our actions, we may be drawn into more wars we don’t need to fight…. this war, like all wars, must end.

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The very precision of drone strikes and the necessary secrecy often involved in such actions can end up shielding our government from the public scrutiny that a troop deployment invites.  It can also lead a President and his team to view drone strikes as a cure-all for terrorism.

A president”? Anyone in particular? Who’s been president all these years, anyway?

The Misery Index: A Look Back at Bulgaria’s Elections

With Bulgaria’s May 12th election fast approaching, it is useful to reflect on past elections and the resulting economic performance of each elected government. To do this, I have developed a Misery Index inspired by the late Prof. Arthur Okun, a distinguished economist who served as an adviser to U.S. President Lyndon Johnson.

The Misery Index measures the level of “misery” in the economy. My modified Misery Index is equal to the inflation rate, plus the bank lending rate, plus the unemployment rate, minus the annual percent change in GDP.

An increase in the Misery Index indicates that things are getting worse: misery is increasing. A decrease in the Misery Index indicates that things are improving: misery is decreasing. The accompanying chart shows the evolution of Bulgaria’s Misery Index over time.  

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The Socialist Party government of Prime Minister Zhan Videnov created hyperinflation and a lot of misery. The Misery Index under the Videnov government’s watch peaked at 2138 in the first quarter of 1997. That number isn’t shown on the accompanying chart—if it was, the chart would take up an entire page of Trud.

So, the chart starts in the second quarter of 1997, with the Kostov government. Shortly after Kostov took power, Bulgaria installed a Currency Board System, based on a draft Currency Board Law, which I authored at the request of President Petar Stoyanov. The Currency Board brought an end to Bulgaria’s hyperinflation, which peaked with a monthly inflation rate of 242%, in February 1997.

This Month at Cato Unbound: The Future of Right-Libertarian Fusionism

This month our online ideas journal Cato Unbound boasts an all-new design, with new software to make reading and navigating a whole lot more intuitive.

Our latest issue tackles the topic of fusionism – the old-new idea that libertarians belong on the right side of the political aisle.

Fusionism has a long history. But will it play to millennials? That could be one of the most important questions in American politics.

Young voters are a lot less conservative on social issues like gay marriage and drug policy. In this, they echo previous generational trends on questions like interracial marriage and pornography, neither of which are live political issues anymore. Younger Americans also seem more skeptical of corporate influences in politics. That fact may tilt them to the left, but it could also pave the way for a less corporatist free-market movement, if only we can make the case to them. And some millennials might not even remember a time when America was at peace – a thing we can’t say about any previous generation.

How does the old right-libertarian alliance fare in this new environment? We decided to ask some young activists who’ve given some thought to the question.

Making the case for fusionism is Jacqueline Otto of the American Enterprise Institute’s Values and Capitalism Project. Economic liberty unites us, she says – and we ought not to let the rest divide us.

And contra, we have Jeremy Kolassa, a writer for United Liberty. He argues that libertarians haven’t gotten much from their old alliance with the right, and it’s time to stand on our own. Libertarians should offer good ideas to whoever will listen and form coalitions wherever specific issues allow it.

Over the next few days we’ll also have essays from Clark Ruper of Students for Liberty and Jordan Ballor of the Acton Institute. Also be sure to stop by our Facebook page and follow us on Twitter as the conversation develops.

How to Engage with Cato on Social Media

In case you haven’t been following what the Cato Institute has been doing lately on social media, here’s an accessible list of all of Cato’s current projects across different social media platforms:

Facebook

Twitter

More Questions for Secretary Sebelius

Given the growing concern even among Democrats that ObamaCare will result in a “huge train wreck” later this year, I have a few questions for Health and Human Services Secretary Kathleen Sebelius to add to my previous list:

  1. What happens if a federal court (say, the Eastern District of Oklahoma) issues an injunction barring HHS from making “advance payments of tax credits” in the 33 states with federal Exchanges?
  2. Has HHS done any planning for that contingency? If so, what are those contingency plans?
  3. If HHS has not, why not? Given that the Congressional Research Service and Harvard Law Review both say there’s a credible case that the PPACA forbids tax credits in the 33 states with federal Exchanges, how could HHS not have a contingency plan ready?

For more on how HHS is violating federal law by planning to issue advance payments of tax credits through federal Exchanges, read my Cato white paper, “50 Vetoes: How States Can Stop the Obama Health Care Law,” and my Health Matrix article (with Jonathan Adler), “Taxation Without Representation: The Illegal IRS Rule to Expand Tax Credits Under the PPACA.

Margaret Thatcher and the Battle of the 364 Keynesians

With the death of Margaret Thatcher, and the ensuing profusion of commentary on her legacy, it is worth looking back at an overlooked chapter in the Thatcher story. I am referring to her 1981 showdown with the Keynesian establishment—a showdown that the Iron Lady won handily. Before getting caught up with the phony “austerity vs. fiscal stimulus” debate, the chattering classes should take note of how Mrs. Thatcher debunked the Keynesian “fiscal factoid.”

According to the Oxford English Dictionary, a factoid is “an item of unreliable information that is reported and repeated so often that it becomes accepted as fact.” The standard Keynesian fiscal policy prescription for the maintenance of non-inflationary full employment is a fiscal factoid. The chattering classes can repeat this factoid on cue: to stimulate the economy, expand the government’s deficit (or shrink its surplus); and to rein in an overheated economy, shrink the government’s deficit (or expand its surplus).

Even the economic oracles embrace the fiscal factoid. That, of course, is one reason that the Keynesians’ fiscal mantra has become a factoid. No less than Nobelist Paul Krugman repeats it ad nauseam. Now, the new secretary of the treasury, Jack Lew (who claims no economic expertise), is in Europe peddling the fiscal factoid.

Unfortunately, the grim reaper finally caught up with Margaret Thatcher—but not before she laid waste to 364 wrong-headed British Keynesians.

In 1981, Prime Minister Thatcher made a dash for confidence and growth via a fiscal squeeze. To restart the economy, Mrs. Thatcher instituted a fierce attack on the British fiscal deficit, coupled with an expansionary monetary policy. Her moves were immediately condemned by 364 distinguished economists. In a letter to The Times, they wrote a knee-jerk Keynesian response: “Present policies will deepen the depression, erode the industrial base of our economy and threaten its social and political stability.”

Mrs. Thatcher was quickly vindicated. No sooner had the 364 affixed their signatures to that letter than the economy boomed. Confidence in the British economy was restored, and Mrs. Thatcher was able to introduce a long series of deep, free-market reforms.

As for the 364 economists (who included seventy-six present or past professors, a majority of the Chief Economic Advisors to the Government in the post-WWII period, and the president, as well as nine present or past vice-presidents, and the secretary general of the Royal Economic Society), they were not only wrong, but also came to look ridiculous.

In the United States, the peddlers of the fiscal factoid have never suffered the intellectual humiliation of their British counterparts. In consequence, American Keynesians can continue to peddle snake oil with reckless abandon and continue to influence policy in Washington, D.C., and elsewhere.