Moving license no longer needed in Missouri

Business, Protectionism
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Any blow struck for economic liberty is worth celebrating, even if the person wielding the hammer is not, shall we say, a fan of Rothbardian libertarianism.  But there is encouraging news from Tim Sandefur of the Pacific Legal Foundation, which pressured the Missouri legislature to repeal its licensing laws regarding moving companies:

Under the old law, a person applying for permission to operate a moving company was required to submit to a licensing scheme under which existing moving companies were given the privilege of basically vetoing the application. We challenged that law on behalf of St. Louis entrepreneur Michael Munie, and argued the case in federal district court in April. But in the meantime, state lawmakers passed legislation repealing the law, and this afternoon, Governor Nixon signed that bill, thus opening the road for economic opportunity in the Show Me State.

Baby steps, to be sure — Missouri and most other states have licensing laws for dozens of occupations, some imposing absurd educational requirements (in Texas, for example, “shampoo specialists” at hair salons must have 150 hours of training before they can even test for their license) and exorbitant costs for both training and the licensing process itself.  None of these laws actually do anything to ensure quality service for consumers; they exist solely to protect incumbents from competition.  These laws can’t disappear quickly enough, and kudos to the PLF and other organizations, such as the Institute for Justice, for continuing to challenge them.

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Why is it okay to pay an intern $0? or, liberal hypocrisy on the minimum wage

Business, Employment Law, Podcasts, Victimless Crimes
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A recent Slashdot post mentions some NYTimes-style whining about how employers like Apple are “exploiting” their employees by paying them low wages:

Apple Store Employees Soak Up the Atmosphere, But Not Much Cash
raque writes

“The NYTimes is reporting on just how badly Apple Retail employees are being paid. Apple is exploiting its fan base for cheap labor. This is one reason I don’t go to Apple Stores if I can avoid it. Stores like NY’s Tekserve offer a great shopping experience without so exploiting their workers.”

Would you rather start at an Apple store for $11.91 an hour (average starting base pay, according to the linked article) and an employee discount, or at Tiffany for $15.60?

The idea that it’s wrong to offer to pay someone a low wage is rampant. For a recent example, one sage argues, in a Techdirt comment thread, that “Competing by paying your workforce less is not competing, it is cheating.” Marxian “exploitation” ideas like this are at work behind the horrible minimum wage. As Henry Hazlitt explains in Economics in One Lesson (ch. 18), a minimum wage law simply causes unemployment—and it causes it primarily among those who have the lowest valued skills, namely the poor, minorities, handicapped people, and the young. It cuts out the lower rungs of the ladder that people could use to climb to higher levels. One benefit of a job at any price is the skills and learning experience—learning to engage with customers and co-workers, to show up on time, manners, dress code, and so on.

This is, in fact, one reason some people are willing to serve as “interns” for no pay: for the work experience, contacts, resume padding. And this an absurdity in the very idea of the minimum wage: it’s legal to offer to pay someone, say, $10 per hour for a certain job, or more, and it’s legal to offer to pay them $0 per hour (internship), but it’s illegal to offer them something in-between. This is just as absurd as the idea that it’s legal to give away sex but not to charge a monetary price for it (prostitution).

I thought about this when listening to a recent Slate Political Gabfest podcast, which is one of my favorites although the three hosts are liberals. In this episode, around 50:30, host David Plotz mentions that they are looking for a new intern—and that, while it is an “unpaid” position (6-10 hours per week), it leads to “great opportunities” for the interns, who use the experience to find a (real) job elsewhere. Exactly. Even working for nothing makes employment worthwhile for people starting out. It’s a stepping stone to other things. Of course, only middle class or richer kids can afford to work for nothing. Imagine if Slate were permitted to pay, say, $3 or $5 per hour to an intern—far below the curent federal minimum wage of $7.25 per hour—more lower class or poorer kids could perhaps afford to take advantage of intern-type positions. But who cares about them, right? After all, they can always join the military, get on welfare, or sell drugs and then get a free jail cell with three hots and a cot.

As my friend and fellow TLS co-blogger Rob Wicks said to me:

Minimum wage can be a sort of welfare program for the middle class. For those at the upper end of the middle class, working for nothing but experience is a fine investment. But if you are doing it for money, it has to be enough to make it worthwhile for someone already middle class. Their support for minimum wage is not really for the poor. Middle class people with kids just want to make sure their spoiled, largely unmotivated children make enough money at the local coffee shop/burger joint to show up consistently.

 

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Government stats now eyed with suspicion

Business, Business Cycles
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Another one of the positive side effects of the current economic crisis is that even the government’s statistics, once accepted uncritically by the media, are now faced with some skepticism. As someone who examines government statistics often, I can say that government stats definitely have their uses, assuming you consider the methods used, and take it all with a grain of salt. But for years, the stats had been accepted as gospel and as a reliable foundation for the practice of macro economics.

To be sure, this article at Fortune today doesn’t actually impugn the unemployment rate itself, but it does question its relevance. Titled “The increasingly irrelevant unemployment rate,” the article notes that the unemployment rate, touted for years by the government and the media as a reliable index of economic strength, doesn’t really give us a good picture of reality anymore – assuming it ever did.

With labor force participation at the lowest point in a generation, the addition of the few new jobs added in May hardly convinces us that the economy is improving, and indeed, as new jobs were added – some of those people who gave up on finding work rejoined the workforce and drove the unemployment rate up, not down.

So, the unemployment rate tells us nothing without an understanding of labor force participation, and that is a pretty iffy number. It’s now becoming well-known that the method used to generate the unemployment rate is fatally flawed. The survey method used in the Household Survey ignores all the underemployed and chronically unemployed people who would love to have a full-time job. The labor force then only really consists of recently unemployed and people who absolutely must have jobs now. This excludes recent college grads living in their basements and stay at home moms who would otherwise be wage earners, and earl-y retirees who can’t find another job.

This is a huge shadow inventory of unemployed people not picked up in the official unemployment rate. Who can take a politician seriously who quotes these stats as proof of anything?

And for that matter, who can take a macro economist seriously who attempts to manage the economy this way? The decline in the reputation of government stats also nicely follows the decline of faith in macro economists to manage the economy to perfection. Does anyone think that a macro economist feeding the unemployment rate into a computer model somewhere will know just what to do? That dream died in 2008.

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Austrian AV Club—Kinsella and the Corporation on Trial

(Austrian) Economics, Anti-Statism, Business, Libertarian Theory
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I was interviewed yesterday by Redmond Weissenberger, Director of the Ludwig von Mises Institute of Canada. We had a long-ranging discussion of the issue of corporations and limited liability, and we touched on other issues as well including causation and responsibility and the praxeological structure of human action; intellectual property; gay marriage and language; human rights as property rights, and free speech; corporate size and international trade in a free society, vs. left-libertarian claims to the contrary; nuclear power, energy, and environmentalists; eminent domain and the Keystone pipeline; Peter Klein and Murray Rothbard on the calculation problem and the upper limit to the firm; state monopolies versus the market; and practical and moral aspects of tax evasion and tax avoidance.

For background on some of the issues discussed, see my post Corporate Personhood, Limited Liability, and Double Taxation; also Causation and Aggression and California Gay Marriage Law Overturned: What Should Libertarians Think?; Peter Klein’s chapter “Economic Calculation and the Limits of Organization,” in The Capitalist and the Entrepreneur: Essays on Organizations and Markets; The Effects of Patent and Copyright on Hollywood Movies; Leveraging IP.

The video is below; audio file is here (83MB; 1:27 length).

Update: now on the KOL115 podcast.

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Judge.me, Private Arbitration and Intellectual Property

Anti-Statism, Business, IP Law, Libertarian Theory, Private Security & Law
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Tom Woods blogs about an intriguing new service, in I Love People Who Actually Do Things I Only Talk About:

Check out Judge.me, a new Internet-based dispute resolution website, being touted as an equitable and affordable alternative to government courts. The creator sent me a note alerting me to it, and I’m very interested. He also did an AMA (“Ask Me Anything”) at Reddit. Here’s how it works.

Jeff Tucker also wrote about it in Small Claims for the Digital Age:

Judge.me seems like an amazing idea. It’s a arbitration system for the digital age. It is especially useful for international disputes, resolved in days. The site owner answers detailed questions on Reddit. It raises an intriguing possibility that the real long-term results of the Ron Paul campaign won’t be political in the way people think of it but rather entrepreneurial. Many people have been inspired to start new businesses based on the idea of a pure voluntary order.

See the video below. This kind of simple, technology-based private arbitration should be of especial interest to anarcho-libertarians, who have long argued that private arbitration would play a significant role in justice in a stateless society.1 In fact, its founder is a self-proclaimed anarcho-capitalist, as noted in his Reddit AMA.

One interesting thing is their choice of law, which matters given that many of the disputes might involve parties from different countries:

For court litigation, which law to apply (called “choice of law”) becomes an issue as soon as the dispute crosses jurisdictional borders. Even when the parties specified their choice of law in the contract, good lawyers find ways to challenge this which leads to choice of law becoming a trial on its own. To avoid this issue, smart arbitration service providers such as judge.me specify that rather than applying a certain local law, the arbitration will be resolved based on common law and [equity principles]. The concept of basing dispute resolution on “fairness and equity” is known under its latin name [“ex aequo et bono”].

I.e., disputes are resolved by common sense principles of justice—the general rules developed over time in common law and equity courts. (This is similar in a way to international law’s appeal to “the general principles of law recognized by civilized nations”. See my post, The UN, International Law, and Nuclear Weapons.)

But if you stick to justice, common sense, and basic property and libertarian rights, then statutory law is out. You don’t appeal to it when making a determination—unless both parties have agreed to this artificial legal standard. (See my Legislation and Law in a Free Society.) Now this brings to mind the case of so-called “intellectual property”—primarily patent and copyright. Both are the explicit results of massive state legislative schemes–the Copyright Act and the Patent Act. Some anarcho-libertarians who are nonetheless pro-IP, such as J. Neil Schulman and L. Neil Smith, are clear that they do not favor state-enforced IP. As I wrote elsewhere, Schulman, “as an anarchist, to his credit admits that if it could be shown that his version of IP could be enforced only by state law, he would abandon it…” In fact, if they are anarchists, they cannot support any legislation since legislation is a creature of the state. But then they turn around and say that they think private arbitration in a free society would be resorted to, to resolve IP and “plagiarism” disputes. Let’s forget for a second that plagiarism has nothing to do with copyright, patent, or market competition. Let’s forget that if you could sue someone for “copying” you unfairly, then this would open up a whole new realm of anti-competitive protectionism—anyone who competes with you, especially “unfairly”, is “stealing” your customers and unfairly “harming” you.

Let’s just assume we have a private legal system largely based on arbitration, which itself relies on general principles of justice, not on legislation. To sue someone you need to allege they have harmed you—invaded your property rights. Some contract breach, tort, trespass, or even crime. Now if you make the text of a novel or the digital file of a song or movie public (for whatever reason), and someone else copies and uses it and redistributes it (for free; or for monetary consideration); or if someone imitates your product and sells a competing ones—what possible common law claim could you have? None. You could make a copyright or patent claim, but only relying on the legistatist quo. You could not appeal to any organic legal principle developed in a decentralized free market legal order. It is not wrong to learn. To compete. To emulate. To copy. To steal customers. To “deprive” a competitor of profit. To do “something similar.” To use information that is publicly available.

My point? If we had a free society with a decentralized, non-legislated legal order, it is impossible to imagine there being patent or copyright law or claims, any more than someone could make a minimum wage or Americans with Disabilities Act claim absent those federal statutory schemes.

[C4SIF]


  1. See, e.g., Linda & Morris Tannehill, The Market for Liberty; David Friedman’s The Machinery of Freedom: Guide to a Radical Capitalism; and “Imagining a Polycentric Constitutional Order: A Short Fable,” chapter 14 of Randy Barnett‘s The Structure of Liberty

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