Topic: General

America Should Charge the World for Defending It

Today the U.S. underwrites the defense of wealthy nations across the globe. Washington should stop using the Pentagon as a global welfare agency.

Uncle Sam at least should charge for his defense services, as Donald Trump has suggested. America shouldn’t be defending its rich friends for free.

Most Republican Party presidential candidates insist that Washington do more on behalf of its already subsidized, protected, coddled, and reassured allies. Why do U.S. politicians put the interests of other nations before those of America?

The Pentagon devotes much of its resources to defend other nations, mostly wealthy industrialized states. In most of these cases America has no important, let alone vital, interests at stake. Instead, Washington should allow allies and friends to protect themselves.

The Most Important Thing that NYT’s Nicholas Kristof Left Out

Today, Nicholas Kristof of the NYT wrote an op-ed entitled “The Most Important Thing, and It’s Almost a Secret.” According to Kristof, “The most important thing going on in the world today is something we almost never cover: a rapid decline in poverty, illiteracy and disease.”

Kristof makes a powerful case for the improving state of humanity and rightly bemoans the fact that the media all too often focus on war, hunger and despair. And that gives most readers the wrong impression that the world is falling apart.

But, where did all the progress that Kristof talks about come from?

The Homo sapiens has been on this earth for 200,000 years. For 99.9% of that time, we lived in ignorance, poverty and misery. What has changed? Reading the NYT, the reader is left with the impression that “good stuff,” like manna from heaven, suddenly was conjured up out of thin air.

Not so. The key to the improvements in the lives of ordinary people over the last 200 years were industrialization and trade, which generated historically unprecedented rates of growth. And the importance of growth cannot be overemphasized. There is not a single example of a country emerging from widespread poverty without sustained economic growth. As University of Oxford Professor Paul Collier writes, “Growth is not a cure-all, but lack of growth is a kill-all.”

Don’t let the headlines fool you. Explore the data for yourself.

Gholz Recognized for His Work on Political Economy

Cato Institute adjunct scholar Eugene Gholz has been awarded the 2015 Fiona McGillivray award for his paper, “Assessing the ‘Threat’ of International Tension to the U.S. Economy.” Chosen by the Political Economy section of the American Political Science Association, the award is given for the best paper in Political Economy presented at the previous year’s APSA Annual Meeting.

In the paper, which is featured in A Dangerous World? Threat Perception and U.S. National Security, a book that I co-edited with John Mueller, Gholz concludes that the conventional wisdom regarding the economic threat international tension poses to neutral states is “often exaggerated.”

President Obama (like other political leaders before him) is wrong about the economic consequences of foreign tension for the United States, as are most of the academics involved in grand strategy debates.

The bottom line is that it is rarely, if ever, worth spending American resources to prevent foreign instability in the hope of protecting American prosperity, even assuming that such spending effectively tamps down tension.

Gholz, an associate professor at the LBJ School of Public Affairs at the University of Texas at Austin, argues that neutral states can sometimes actually benefit economically from foreign tension and even war:

governments in wartime transfer resources from normal production into the war effort, which means that the belligerents’ domestic economy produces less of value for nonmilitary consumers, fewer capital goods to prepare for future domestic production, and fewer export products.

The result is a near-term gap between demand for goods and services and domestic supply—a gap that is typically filled by imports from international markets.

Not every foreign country is well positioned to take advantage of the mobilization-induced consumption binge, but, on net, because belligerent (or scared) economies increase their overall consumption, neutral countries enjoy an economic benefit.

The paper is not a brief for a U.S. policy of instigating foreign conflict, of course: we all recoil from the horrors of war, and any economic benefit that the United States might gain from foreign tension would be relatively small. But the current U.S. strategy’s emphasis on military activism and forward presence is built on the assumption that scaling back U.S. military commitments would hurt the American economy, and that assumption is not justified. There is no reason for the United States to pay direct costs – the costs of our forward military strategy – for a phantom economic benefit.

When presenting the award to Gholz, Professor Lloyd Gruber from the London School of Economics and Political Science, chair of the award committee, lauded the “well-argued, punchy, and provocative” paper:

Using historical examples and reasoning by analogy—the paper likens the effects of the consumption booms that accompany war-fighting to the effects of the peacetime demand shock that would occur if millions of Chinese consumers were to decide to purchase new automobiles at the same time—Gholz makes a compelling case. …His paper is a consumption boom for the reader.

The book in which Gholz’s paper appears can be found here.

The $4,000 Suit and the Benefits of Exchange

Last week, I wrote about a man who spent 6 months of his life and $1,500 to make a sandwich entirely from scratch, without the benefits of market exchange. The story illustrates how exchange and trade enrich our lives.

After making his incredibly costly sandwich, the same man embarked on an even costlier endeavor: making a suit from scratch. He picked cotton from a field, spun the cotton into thread, wove the thread into cloth, sheared wool from a sheep, harvested hemp, raised silkworms for their silk, killed a deer and tanned its hide to make leather. This process cost him 10 months of work and $4,000.

At the end of the video documenting how he made the “suit,” he stands in a bizarre-looking outfit with pants that end at his knees and says with regret, “OK, even with all that work, I might have run a little short on material.” Even after 10 months of intense labor, he was unable to come close to matching the quality and price of a product that he could procure through the free market. 

Thanks to market exchange and the division of labor, obtaining new clothes is simple and increasingly affordable. For example, increasing cotton yields have lowered the price of a staple fabric material.

The real price of a suit, measured in the number of hours it takes an average worker to earn enough to buy one, has declined: a two-piece wool suit cost the average American 12.4 fewer hours of work in 2012 than it did in 1956. (Check out Professor Don Boudreaux’s analysis for further details).

Critics sometimes decry increasingly affordable clothing, viewing falling prices as a sign of worker exploitation. In 1891, U.S. President Benjamin Harrison summed up this viewpoint when he said, “I pity the man who wants a coat so cheap that the man or woman who produces the cloth or shapes it into a garment will starve in the process.” However, as Johan Norberg pointed out yesterday in the U.K. Huffington Post, far from making people poorer, the garment industry has actually helped to decrease poverty. As he eloquently puts it:

Western activists rail against “sweatshops,” but among researchers and economists from left to right there is a consensus that these jobs are the stepping stones out of poverty.

Take a moment to consider what you are wearing right now, and how much work went into its creation, from the harvesting of its raw materials to the finishing touches. No one person created it—it is the fruit of a complex family tree of mutually beneficial human cooperation through the market.

The Drip, Drip, Drip of Human Progress

Checking out the news this morning, the following five stories caught my attention.  First, NASA has confirmed that there is water on Mars, thus raising the enticing possibility of extra-terrestrial life as well as colonization of the red planet.  Second, surgeons have developed a cure for age-related macular degeneration, which is the most common form of blindness.Third, a British scientist has developed a new liquid crystal material that can be printed onto any product, including pill bottles and banknotes. This invention could help to eliminate the counterfeit goods industry worth up to $1.5 trillion per year.

Fourth, a clinical trial at St George’s University of London confirmed the cancer-fighting potential of the anti-malarial drug called artesunate. This breakthrough could cut the price of colon cancer treatment from $45 to $1 per day. Fifth, an analysis of a huge amount of health and genetic data from British volunteers has yielded some fascinating clues on the genetic makeup and DNA mutations of smokers who do not develop cancer. Down the line, these findings could help develop gene-based therapies for lung cancer.

I am sure there are plenty of other inventions, breakthroughs and discoveries that took place in the last 24 hours that I have not yet read about. Not bad, fellow earthlings, not bad at all!  

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Watching the Debates Tonight? Get Smart Policy Analysis on Twitter With #Cato2016

#Cato2016

Tonight, starting at 6:00 p.m. EDT, CNN will host two nationally televised debates featuring candidates for the Republican nomination for the 2016 presidential elections. Though widely regarded as the “second” debate of this election season, those of you who have been following Cato coverage will recognize tonight’s broadcasts as the fourth and fifth debates of Campaign 2016.

Cato scholars will be on hand to live-tweet both debates, bringing insightful commentary and hard-hitting policy analysis to the discussion. Follow tonight’s live-tweeters and join the conversation on Twitter using #Cato2016.

Similar to the Fox debates, the split in candidates will be based on average scores from national poll results spanning a two-month period ending last Thursday, with candidates required to average at least 1 percent support in three polls to qualify.

The first debate will feature Rick Santorum, Bobby Jindal, George Pataki, and Lindsey Graham. Then, at 8:00 p.m. EDT, Donald Trump, Jeb Bush, Scott Walker, Mike Huckabee, Ben Carson, Ted Cruz, Marco Rubio, Rand Paul, Chris Christie, John Kasich, and Carly Fiorina will take the stage.

Although CNN had originally intended only to include the top ten candidates in the later debate, an exception was made for Fiorina, whose performance in the first Fox debate helped her move into the top ten in polls conducted after that broadcast.

Candidates positions on the stage will be based on their overall rankings, with Trump—flanked by Carson and Bush—front and center for the primetime debate.

Former Virginia governor Jim Gilmore, who garnered 1 percent support in only one poll during the two-month window, did not meet the criteria for inclusion.

Join the conversation tonight on Twitter with #Cato2016.

 

DHS Uses Local Law Enforcement To Shut Down Tor Access For Library Patrons

Earlier this year, the Library Freedom Project launched an initiative to test the use of Tor exit relays in local libraries as a means of helping library patrons browse the internet annonymously. As the LFP noted

To begin this new project, we needed a pilot, and we had just the library in mind – Kilton Library in Lebanon, New Hampshire, one of two Lebanon Libraries. Chuck McAndrew is the IT librarian there, and he’s done amazing things to the computers on his network, like running them all on GNU/Linux distributions. Why is this significant? Most library environments run Microsoft Windows, and we know that Microsoft participated in the NSA’s PRISM surveillance program. By choosing GNU/Linux operating systems and installing some privacy-protecting browser extensions too, Chuck’s helping his staff and patrons opt-out of pervasive government and corporate surveillance. Pretty awesome.

At least it was awesome until the Department of Homeland Security got wind of the project.

As Julia Angwin of ProPublica reports today

In July, the Kilton Public Library in Lebanon, New Hampshire, was the first library in the country to become part of the anonymous Web surfing service Tor. The library allowed Tor users around the world to bounce their Internet traffic through the library, thus masking users’ locations.

Soon after state authorities received an email about it from an agent at the Department of Homeland Security.

“The Department of Homeland Security got in touch with our Police Department,” said Sean Fleming, the library director of the Lebanon Public Libraries.

After a meeting at which local police and city officials discussed how Tor could be exploited by criminals, the library pulled the plug on the project.

“Right now we’re on pause,” said Fleming. “We really weren’t anticipating that there would be any controversy at all.”

He said that the library board of trustees will vote on whether to turn the service back on at its meeting on Sept. 15.

Nearly everything in our society has been or will be exploited by criminals: cars, cellphones, hatchets, cleaning solutions, tape, boats, aircraft–the list is virtually endless. It’s part of living with and in a free society, and the feds don’t come knocking on 3M’s door every time a criminal uses their tape to facilitate a break-in or other criminal act. But federal agencies like DHS and the FBI are literally on an anti-encryption, anti-privacy crusade with respect to consumer electronics and software–especially high-quality, publicly audited and effective anonymization technology like Tor. The Kilton Library’s internet freedom project has just become the federal government’s latest victim in that misguided campaign.

To recap: DHS used the Lebanon, New Hampshire police department to lean on–if not outright intimidate–a local library into at least temporarily abandoning a tool that reinforces Fourth Amendment privacy protections–and in doing so treated all of the Kilton Library’s patrons as potential criminals first, and as citizens with rights a very distant second.