Wednesday, January 30, 2013

What About the Children?!?! Part 1

In discussions when we can sometimes, not often, but sometimes get passed the question about roads, chaos, and other things that are wrongfully attributed to a free society the question of children's education is often next. I don't find it to be a silly question but rather one that is caused by virtually everyone's upbringing in a public school. It is easy to believe that if schools are not tax funded the poor would be left without education while only the rich will have access. I feel this is completely unfounded and also believe that no publicly funded schools would greater enhance the education of our children, free society or not.

First, I'll present an attack on our current system and how it has failed to educate taking away the argument that we need publicly funded schools to educate in the first place. Secondly, I will show how a pure private approach to the education of our children will greatly improve the ability for them to learn. Lastly, I will provide the argument that even the poor will have access to education, a much better education.

The belief that our current education system is good or can be saved is why so many people hang on to it. The belief that our k-12 schools pump out knowledgeable students ready to enter college is strong in the hearts of many. But what if I was to claim that they are wrong? What if I claim that we aren't knowledgeable and ready for college? I am a recent product of the public school system and am very aware of the way teaching is done. Teachers teach what they are told to teach, not all because they want to but because they have to. Standardized tests are set to the lowest denominators by bureaucracy. There's no way teachers can adapt to the many ways different kids learn. They have to just make sure, for the sake of their job, that their students can pass the standardized tests. Although it is good that there are advanced placement classes for the brighter kids, I'm more particularly concerned about those that have a tougher time learning. The smarter kids do well regardless of a public education, while those with different learning capabilities are left in the dust.

My next argument against public education is one most people don't like to hear. It is my belief that public education is an indoctrination center set up by the State for the State's intended goals. Pumping out as many citizens that will not think and abide by what they say no matter what. We are taught history and economics the way the State wants us to learn history and economics not the way it actually happened or how economics actually is. We are taught that certain presidents have been the best and others bad while certain policies have saved us and others have hurt us. We are offered one point of view and we must accept that point of view as fact. We are only taught that Keynesian economics is good for the economy while the Chicago school and especially the Austrian school are ignored and pushed aside. We are only taught what the State wants us to learn with no other alternatives. So instead of public education providing for a well informed student ready to enter the next level of learning, public education provides sheep ready to accept anything the major media outlets informs them to believe because the government is never wrong.

All you have to do is ask the regular student about politics and depending on whatever party he's affiliated with he'll accept everything they have to say as truth without attempting to analyze the effects of any given policy. Part 2 will contain the rest of my argument, stay tuned!

Tuesday, January 29, 2013

Fighting The Word Greed

One of the biggest emotional arguments I hear when talking about true capitalism is the issue of greed. I call it an emotional argument because it is not one based on reason but off a reactionary knee jerk of failure to understand economics. What is missed is the fact that I use greed as a logical argument FOR capitalism. I believe greed is a necessary and important facet in the cogs of a free market. It is not because I believe greedy people hurt the poor it is because greedy people in fact help the poor.

I've heard it from those on the left and on the right that without a social safety net backed up by theft, I mean taxes, people will die on the streets. They will have no ability to have food, shelter, and other necessities. The greedy rich WOULD NOT just voluntarily help those in need, no they will allow them to fall to the floor and die. This argument is for one not backed by any historical data or true economic understanding.

Without going to deep into the causes of higher prices for many goods like health care and living expenses we need to look into the historical data before the introduction of the welfare state. I will leave it to you to look up the data of how people lived just fine without a social safety net. In the case of health care there were many "clubs" that people paid and donated to to be a part of. These clubs were completely financed by private efforts to take care of not only yourself but for those that could not pay on their own. These clubs were known as mutual aid fraternities and were common before the introduction of heavy regulations that were used to INHIBIT competition.1 Greed did not hurt the poor, the free market did not hurt the poor, the State with its regulations hurt the poor.

On the economic side without going into charities and the like greed is a very important attribute to helping the poor. This at first would seem to be the opposite case, but this is not so. Capitalists have money because they are good at investing into projects that hold value in the future, value that gives them more money than they would have in the present case. With their ever growing "greed" and continuous want to create profits for themselves they don't just stay idle with the money they have. Remember they are good at turning their present stock of monies into a greater stock of monies in the future. It should be obvious that they WANT to make more money in the future so it follows that they will want to continue to invest.

When they invest they allocate resources into their project for capital goods. These capital goods are bought because they increase the efficiency of how the products are made. With this efficiency caused by the investment into capital goods they are able to create more products for the same amount of inputs, lowering the cost to make each product. With the lower cost to produce their goods they are able to lower the price they charge for their products. They want to do this because they would attract MORE customers from other competitors charging higher prices for the same good.

Well what happens next? It should be obvious that now prices are lower so poor people can now afford these goods or afford more. But it doesn't stop there. Other greedy entrepreneurs and greedy capitalists in the same industry see that their is a chance to make money in this market. So they will invest ever more money into capital goods in an attempt to be able to produce cheaper products so they can also get a piece of the pie.

So you see greed in this case is actually good, this greed fuels competition among the capitalists. It is the greed that allows people to afford goods that at first could only be afforded by richer people. It is the greed that has allowed for the poor to afford cars, tv's, and cell phones as opposed when they could only be afforded by the richest of people.

Greed is not the problem, the State and its regulations to restrict competition is the problem.


Tuesday, January 8, 2013

In Defense Of The Firearm Price Gougers

With recent shootings and even more political drama over the use of firearms everyone has been in a frenzy of buying anything and everything they can get their hands on. I myself have been guilty of buying bulk amounts of ammo when I could find some in stock. It's not a rare sight to see people buy everything on the shelves.

With a basic understanding of your Economics 101 class it should be obvious that demand has sky rocketed and supply has plummeted. With this comes a new supply and demand curve leading to a higher equilibrium price for anything firearms related.

I'm not here to talk about these obvious actions of the market, but of something more prevalent right now. That's those pesky price gougers that have marked up ammo, firearms, and magazines by up to 100% if not more. Those that are fans of firearms tend to lean more to the right. They tend to believe, more or less, in competitive free markets. They tend to yell at those on the left for using emotional arguments that are in favor of gun control instead of facts and logical arguments.

With the current shortage and price gouging they don't realize they're using emotional arguments against those companies that are price gouging.

I'd like to offer the logical argument in favor of price gouging so that we can get away from useless emotional arguments that we all hate to hear. I intend to defend the price gougers for their essential role in a free market.

First we must quickly bring up the facts about acting man and his role in the market. It should suffice to merely say that in any transaction, two actors in order to fulfill their wants rate what they are willing to sell and buy at that certain moment in time. This lists of rated wants is not constant and actually changes depending on the ever changing situations of life.

So what does this have to do with price gougers? Why are they pricing their goods so ridiculously high? It must be noted that prices aren't set by production costs or even distributor costs. Prices are set by what sellers believe buyers are willing to pay for any good. Right now these price gougers believe that people are going to be willing to pay their outrageous prices and that's why they do it. It has nothing to do with greed and everything to do with the consumers.

Price gouging obviously does not originate with firearms crisis. Natural disasters are another time when price gouging becomes the norm. And bringing up government intervention of price ceilings, price gouging is very important here as well.

I believe this analogy to be of importance-

A hurricane hits and people are left without power to their homes. People are now in need of, let's say, ice in order to keep their food from going bad. Some have a good amount of canned food that doesn't need ice while others haven't prepared and have only food that can stay good cold.

So everyone starts going to their local grocery stores. One situation exists where the government has set a price ceiling and the other where no price ceiling exists. Where price ceilings exists and companies are not allowed to set higher prices for their goods people are hurt. If the price ceiling is set at 3.00$ than the first people to arrive at the store are going to quickly buy the ice regardless of their situation at home. It won't matter if they have more canned goods than frozen because at that price they believe they can take it home and use it. Those that arrive later to the store for the ice will quickly find that all the ice is gone, and they might need it because they don't have canned goods but only frozen.

The other situation is where price ceilings are not enforced. Groceries see it fit to price their very limited stock of ice at a price of 15.00$ which is a tremendous mark up from what it was before. Aren't the grocery stores greedy now for price gouging when people are in times of need? Not at all, in fact they are helping people by price gouging. This is because as everyone races to the groceries to stock up on ice not everyone is now willing to pay 15.00$ over the 3.00$ for the bag of ice. Those people who have a stockpile of canned goods see no reason to pay such a high price for ice when they can suffice off what they have, so they forego the ice. Those that have little to no stockpile of canned goods and are actually in a great need of ice ARE willing to pay the 15.00$ so that they can save the food they do have. It no longer becomes a race to the grocery store where if you show up late you're left out. It now becomes a matter of need, a matter of who is willing to forego the extra price in order to get what they want. Now those who actually need ice have a higher probability of getting it instead of losing it to those who might not.

What does this have to do with firearm price gouging? The lesson is exactly the same.

Someone like me, where I have a comfortable amount of ammo, magazines, and already have an AR15 I'd be willing to start buying more ammo, magazines, and another AR15 or AK47 at prices that we are accustomed to seeing. But now that the prices have skyrocketed by the price gougers I'm not willing to forego the extra money for more of something I already have. By not being willing to pay the extra cost I'm leaving the available stock to those who might not have a comfortable amount of ammo, magazines, and an AR15 already. Those who now realize they might want to buy them now and are willing to pay the extra price are going to be able to pick up these goods when they wouldn't be available had the prices been left to what we are used to seeing.

Price gougers help those people that are in actual need of goods, there's no such greed involved.

You either support capitalism or you don't and price gouging has an essential role in the intricate gears of a free market.