‘Every step and every movement of the multitude, even in what are termed enlightened ages, are made with equal blindness to the future; and nations stumble upon establishments, which are indeed the result of human action, but not the execution of any human design.’

Adam Ferguson, An Essay on the History of Civil Society (1767)

17 February 2012

Can the GOP Defend Capitalism?

No doubt like many non-Americans, I too have been caught up in the drama — farce? — of the Republican party’s race to select a presidential candidate to face Barack Obama in November.

Many political issues are of especial concern for conservatives: limited government and fealty to the, respect for States’ and individual rights, and defence of the Republic. One of America’s more immediate (and seemingly more intractable) problems concerns its growing debt burden, a situation made worse by continuing billion-dollar deficits, high unemployment numbers, and unfunded liabilities (principally Medicare, Medicaid, and Social Security).

On all of these issues, though, the Republican presidential contenders — save for one individual (with some candidates better or worse, depending on the issue) — are showing themselves woefully inadequate. Recent debate on reviving America’s economy highlights the GOP’s weakness in understanding the philosophy of capitalism, let alone crafting a pro-marketplace campaign that will resonate with voters.

Click here for my full argument at the Adam Smith Institute. (My appreciation to Sam Bowman, Director of Research.)

06 February 2012

Mapping the Dangers of Competitive Harm

Last week a Cato Institute report caught my eye, about a French commercial court awarding damages to a map-maker for losses incurred through potential customers’ use of Google Maps.

Serendipitously, at the time I was reading Richard Epstein’s Free Markets Under Siege, where he examines ‘competitive markets and compensation for competitive harms’. In the free market system, sellers compete for buyers, who base their purchases on such qualities as price and quality. If the seller can meet consumer demands, free exchange will occur; if not, consumers will go elsewhere and the seller must either improve his business model or close up shop.

Yet the practice of competitive harm means that successful businesses must compensate businesses that are unable to attract trade — a practice that, if followed to its logical conclusion, means that the dynamic free market must ultimately succumb to the deadened economics of socialism.

Click here for my full argument at the Institute of Economic Affairs.