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Free Liberal - free market Coordinating towards higher values tag:freeliberal.com,2005:d2a76a9f3420a6c885c160e6b0fa1805/free-market Textpattern 2021-02-06T07:13:10Z John Stephens http://freeliberal.com/ Kevin Rollins 2014-10-07T18:04:03Z 2014-10-07T22:22:59Z The Significance of Hayek's Contribution [1] tag:freeliberal.com,2014-10-07:d2a76a9f3420a6c885c160e6b0fa1805/0b89cbe4cb2fb1c77ada4ad9fdb6e7e2 Despite being disregarded by mainstream economics for nearly 30 years, from 1940-1970, F.A. Hayek’s articulation of the market process as well as its ideological implications have come into focus since he was awarded the Nobel Prize in Economics in 1974.

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Kevin Rollins 2014-09-01T18:30:39Z 2014-09-01T22:55:01Z Labor Day Reflections tag:freeliberal.com,2014-09-01:d2a76a9f3420a6c885c160e6b0fa1805/2c4ec9df269e7c99ddd96e9b6e97eb52 Today, a friend, who has been working on building a financial advisory business over the past couple of years, shared via Facebook a reflection on her experience laboring as an entrepreneur:

Many of us have thought we would like to own a business and be our own boss, instead of being “labor” – it is a key part of the American Dream to many. The past two years have been invaluable experience for me learning what that is actually like. In reality, being a business owner means you don’t get a Labor Day holiday, or ANY paid time off. It means worrying every day and every waking minute, am I making best use of my time? Could I be doing something different that would better grow this business and make it more likely to succeed? When and how will my next “paycheck” come?

Unfortunately in today’s regulatory and economic environment, starting a new business is not so much a dream as a heroic risk and sacrifice. I will always have great respect for everyone who takes on that challenge. For my self, however, I have come to the conclusion that it imposes too great a sacrifice on my own family. I am grateful to have the opportunity now to build on my experience in financial advising and continue to support the hardy souls who forge their own way in this profession, but to personally return to the security of a salary.

Undoubtedly there are some rapacious corporations in the world who would exploit labor as much as they can get away with, but the reality is that many of us work for Main Street businesses with owners who sacrifice their own wealth and security to be the one who signs the front of our paychecks. So on this Labor Day, I would like to salute all the intrepid job creators out there, and offer thanks to them and God for giving me the opportunity to receive the fruits of my labor.

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Tom Thrasher 2014-08-27T17:20:29Z 2014-08-29T14:56:03Z Debating Conservatives on Immigration: Slogans vs. Economics [1] tag:freeliberal.com,2014-08-27:d2a76a9f3420a6c885c160e6b0fa1805/bc2e2fcf980ebfa21a0e6c28093be36c Ostensibly, conservatives and libertarians care a great deal about maximizing liberty. But given that the proposition of “securing the borders” necessarily implies the processing and deportation of individuals, and the further restriction of immigration, the inherent contradiction between the authoritarian implications of such policies and the language about liberty should be obvious.

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Matt Morrison 2014-01-20T17:34:58Z 2014-01-24T02:01:46Z Chris Kluwe, Civility, and the Folly of Wage Floors tag:freeliberal.com,2014-01-20:d2a76a9f3420a6c885c160e6b0fa1805/1ce678cdb8dca9627a6c31a8f29c90e0

Three weeks ago, before the NFL’s Wild Card Playoff weekend, there were two stories that dominated league headlines besides the weather conditions. First, former Minnesota Vikings punter Chris Kluwe leveled accusations in a Deadspin.com article that his gay rights activism played a role in his release by the team in May 2013, and that his Special Teams coach Mike Priefer had made multiple homophobic remarks. Secondly, out of the four playoff games scheduled for the weekend, three were struggling to sell out their tickets and avoid a local television blackout (they ultimately dodged a blackout with several local retailers buying the remaining tickets). These two seemingly unrelated events are in fact linked by more than the time of their occurrence, as the reader will see by the end of this article.

Chris Kluwe is well known for speaking his mind about many political topics, expressing his anger over being compensated more than teachers, for instance. But in particular, he has been recognized for his vocal support of same-sex marriage; in fact in April 2013 he was named the Grand Marshal [PDF] of the Twin Cities PRIDE celebration. He’s also publicly defended other NFL players who support gay marriage to the point of using profanity against Maryland Delegate Emmet Burns Jr. He cares deeply about the ability of NFL players to speak out on political issues, but it’s no secret that NFL teams don’t like it when players make controversial headlines outside the locker room. It therefore makes it plausible that the Vikings would have no problem trying to quiet down a supporting cast player like Kluwe, as he claims they did through Head Coach Leslie Frazier and General Manager Rick Spielman. When Kluwe told Frazier he “would like to talk with anyone who was interested” in the media, it set him down a course that eventually got him released, according to his account.

On the other hand, Kluwe’s indictment of Coach Priefer’s bigotry seems uncertain considering he alleges Priefer to have “said on multiple occasions that I would wind up burning in hell with the gays, and that the only truth was Jesus Christ and the Bible”. This statement is clichéd enough to be incredulous, especially given the fact that Priefer said in June of 2013, “I think, based on what he’s done in his career, as a man and as an athlete, and for anybody that stands up for what he believes in like Chris did, I have a lot of respect for guys like that”. For what it’s worth, Vikings kicker Blair Walsh has strongly defended the Vikings coaches, claiming Kluwe’s release was football related, though detractors might suggest he’s defending his job by defending his bosses. Priefer denies Kluwe’s accusations saying “I personally have gay family members who I love and support”.

Friction between Priefer and Kluwe likely existed; whether or not Kluwe’s claims of bigotry are exaggerated, fabricated, or accurate is hard to ascertain. Suffice to say, however, that Kluwe is not only frank, but evidently scorns being tactful or diplomatic, as demonstrated on multiple occasions. He would do well to read what Ben Franklin had to say about arguing. It is clear that at least Priefer was frustrated with Kluwe’s outspokenness, if not in regard to his gay marriage advocacy then at least with his campaign to get Ray Guy to the Hall of Fame. Chris Kluwe became a distraction because the Vikings treated him as a distraction; if they had ignored him and let him speak his mind, they would be respecting his rights and avoiding this PR nightmare. At the same time, perhaps Kluwe should refrain from calling people #douchebags and see how it affects his relationships. Maybe he would still have a job.

As Kluwe himself suggested in his article, he may not have been fired entirely because he chose to be more politically outspoken or abrasive than other players. “Whether it’s my age, my minimum veteran salary, my habit of speaking my mind, or (most likely) a combination of all three”, he laments, “my time as a football player is done”. What he fails to mention in his recent article is that after his release he was a member of the Oakland Raiders in the following preseason, though ultimately he was cut before the regular season in favor of second-year player Marquette King. While the Vikings may have disliked Klewe’s behavior, evidently he was skilled enough to have a shot with another team, though at both franchises he was replaced by a younger player (the Vikings drafted rookie Jeff Locke to replace Kluwe).

The “minimum veteran salary” Kluwe mentions refers to a wage floor scale set by the Collective Bargaining Agreement (CBA) signed by the NFL and the NFL Players’ Association in 2011. Rookies earned a minimum of $405,000 in 2013 while players like Marquette King who have completed a season earned at least $480,000. Kluwe, who has played eight years in the NFL, must be compensated at least $840,000 in 2013. Punters, kickers, and long snappers are critical, but typically compensated near the minimum levels since most NFL teams carry one player at those positions during the regular season, yet due to the large number of Division I college football programs (with larger rosters than the NFL), many special teams players are available who can produce nearly as well as those on an NFL roster. Thus the supply of competent labor far exceeds demand. Also, as a recent article in The Atlantic explains, “Kickers and punters need specialized instruction, and their positions are perhaps the ones in which players can improve the most on their natural talent through training”. Potential kickers or punters are less restricted by physical attributes, making them a less scarce resource than “skill position” players.

Ostensibly, the minimum salary is intended to be a “benefit”, designed to guarantee a marginal veteran player higher compensation than a rookie. It also lets a team basically spend money to save money… and no, this isn’t extreme couponing: as a player signed at or near the minimum may have over a third of their salary discounted from the team salary cap, teams are given an incentive to sign more veteran players to their roster. This way it is possible to buy more talent than what a team’s cap number really represents, thus a team with a $120 million cap figure may really be paying $130 million or more in base wages, not to mention signing bonuses. But another way to look at it, as ESPN’s Kevin Seifert asserts, is that “the veteran minimum salary benefit wasn’t designed to help [veterans] get market-level deals. It [was] intended as a way to support the higher base salaries the CBA called for”. More money saved from veterans means more money to pay skill position players absurd amounts, and besides, teams will still save money to sign a young player if possible.

It appears NFL salaries are inflated overall because of the minimum wage scales, not only because the minimum rates are used as a base point by which valuable players can measure their asking price, but also because teams use the money saved by exercising this option to directly fund higher salaries. As with any price floor, a wage floor compels consumers (in this case employers ) to constrain their purchases of a product (in this case labor/employees). Thus fewer veteran punters or kickers can be retained viably by NFL team owners, although they are also constrained artificially by a salary cap and a limit of 53 active players. Employers affected by wage floors can respond with some mixture of restricting employment and price increases. Wage floors may cause price hikes in products to sustain employee wages, so long as competitors cannot severely undercut those higher prices. One can clearly see this effect when traveling to Canada, where the minimum wage is $9.95 to $11 per hour (depending on the province), yet this higher wage floor hardly has any effect on purchasing power as almost everything from cars to aspirin costs substantially more. (Don’t let this discourage your travel plans, though; the abundance of civility and Tim Hortons you’ll find make a trip to our northern neighbor well worth it!)

Perhaps wage controls are why, without competition from other leagues, the NFL stadium experience is ridiculously expensive, as Chris Kluwe complained about in 2011, “Charging outrageous sums for drinks, seats, and seat licenses, while a great moneymaker now, is definitely counterproductive in the long run”. Many have cited these price factors as a major reason for three of the four playoff games having trouble selling tickets for Wild Card weekend. The NFL generates enormous revenue because it lacks competition, which allows for many salaries in the millions, but the wage floors also contribute to inordinately high franchise player wages. They’re also part of the reason why Kluwe has to complain about being paid so much more than the $55,000 median teacher salary he desires to see raised, and unfortunately they are probably a reason why he’s unemployed right now. After tackling marriage laws, I suggest Kluwe’s next crusade be one that brings market forces to the NFL and breaks many of the anti-trust exemptions and public funding sources the league enjoys at the expense of both the American taxpayer and any potential competitors. He also shouldn’t be so doubtful of his return to the NFL labor market, so long as he remembers civility is a resource scarcer than five second hangtime.

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Joseph Swetnam 2010-07-23T03:41:15Z 2010-10-05T12:17:16Z Slavery and the Early Development of Modern Capitalism [31] tag:freeliberal.com,2010-07-22:d2a76a9f3420a6c885c160e6b0fa1805/e65339de7e69d5d45b9ed0e78b4dacf9 Chemical factory in Rostock, 1890

One pernicious myth about capitalism is the notion that slavery was essential to its early development. This idea can be traced back to Marx, who believed that modern capitalism was kickstarted by Europeans’ worldwide theft of land, property and lives during the colonial era. By stealing from the world, Europe accumulated enough capital to invest in large-scale industries, thus launching the West into the modern era.

Marx believed that the initial infusion of capital had to come from outside the market system. He couldn’t see how capital is accumulated within the market through processes inherent to it. No infusion from outside the system is necessary— once European governments began liberalizing their economies during the Enlightenment era, capital began to accumulate within the market through the multiplying effects of specialization and trade, eventually reaching a critical point at which modern industries could be supported.

When individuals specialize in productive activities— becoming blacksmiths, butchers, and so on— and trade their skills and products with one another, more of everything is produced than if each person had to make everything for him or herself. The result is a surplus of the essential goods and services, freeing some individuals to dedicate themselves to non-essential vocations, and even to create new ones. Society becomes wealthier as a wider variety and greater quantity of goods and services are available to all, as well as a wider range of options and opportunities for individuals to explore in their own lives. When the market reaches a certain size and complexity, businesses have room to scale up from one-shop operations to regional, national and international enterprises. It is a process of quantitative increase that produces qualitative changes at key thresholds, and it can utterly transform a society within two or three generations.

Now, imagine how the scenario above would differ if much of the population was enslaved. Workers who don’t earn money and aren’t free to direct their own lives aren’t participating in the marketplace. The marketplace is shrunken; it can’t reach the same size and complexity as it would with full participation, and won’t achieve the qualitative improvements possible at higher thresholds. The economy remains underdeveloped. Slavery could not, therefore, have aided in the accumulation of capital, but could only have held it back.

That’s why the southern United States has always been poorer than the North. Any student of the Civil War knows that the South lost because it lacked the resources that the North had: weapons, railroads, even clothing and food. The South was poor because of slavery; the North was comparatively rich because its laborers worked for wages. If you could wave a magic wand and turn all the slaves of the South into millions of consumers who spent their wages at local businesses, there would not be such a gap between the two regions (and, of course, the war never would have occurred).

Similarly, compare Spain and Portugal to the rest of Western Europe. The Iberian nations are underdeveloped by European standards. They were among the last to industrialize. And yet, they were the first to colonize the New World and they plundered their colonies more voraciously than anyone else. Spain was the most successful in finding gold and silver. Portugal enslaved the most Africans. But neither country was able to turn their colonial enterprises into capital for industrialization.

If slavery and imperialistic plunder lead to industrial development, why aren’t the most culpable nations also the most developed? As it turns out, of all the ways to exploit and utilize the world’s economic resources, conquest, plunder and enslavement are among the least efficient. The economy benefits more from free workers who spend their wages on goods and services than from slaves who have no money to spend. Likewise, it is more cost-effective to trade for resources than to fight over them.

Critics of capitalism often argue that if we in America enjoy freedom and prosperity, it is only made possible through the exploitation of others, whether the workers who make cheap products in third-world sweatshops, or the slaves upon whose backs our nation was erected. It is true that, because of historical differences in development, wealth and power are unevenly distributed in the world, and unscrupulous people do exploit the weak out of ignorance and greed. The critics’ mistake, however, is to assume that because injustice and exploitation exist alongside our freedom and prosperity, the two must be related.

The truth is, not only is our prosperity not built upon the exploitation of others, but we would all be more prosperous if we were all free. With more free participants, the global marketplace would reach a higher threshold of size and complexity, allowing qualitative changes that would produce a variety of opportunity beyond that which we enjoy today. All prosperity is built upon freedom, and where freedom is less than total, all members of society, even the free ones, are less prosperous than they could be.

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