Year-End Update

Before sending 2014 on its way and welcoming with hopeful anticipation the new year, here is a round-up of some essays posted in recent months:

• Will America follow Canada’s economic fight against impertinent obstructions? — on the lessons Canada (and other Commonwealth countries) can teach the United States on the inverse relationship between economic growth and state interventions, whether in the form of taxation policy, regulations, or government debt;
• Market independence or business as usual? — following Republican gains in the November U.S. mid-term elections, will the GOP adhere to constitutionally limited government of enumerated powers or will Washington politics be ‘business as usual’, pursuing bureaucratic aggrandisement, crony capitalism, and fiat money policies? This essay was published courtesy of the Institute of Economic Affairs;
• Ethan Frome’s winter of discontent — on the role of winter in Edith Wharton’s novella, infusing the family of one Massachusetts community with physical and spiritual bleakness; and
• Scrooge: a Christmas capitalist-icon — why the skinflint is the hero of Charles Dickens’s A Christmas Carol, illustrating the sources of wealth for community well-being and the distinctions between public welfare and private charity.

If any of these essays catch your fancy, please share them with your friends and colleagues. DMI needs encouragement to flourish and seek out new research and publishing opportunities!

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#DMI_Reads Update — Reading has been sporadic since the last update; but apart from dipping into the works of William Graham Sumner (Yale sociologist from the early 1900s, who wrote on politics and economics), and the fictional works of Edith Wharton and Charles Dickens (mentioned above), I began the autumn with a Downeast classic and ushered in the winter months with three fine works in political economy:

• Sarah Orne Jewett’s The Country of the Pointed Firs (Boston and New York: Houghton Mifflin, 1896) — a lovely summer sojourn in a Maine coastal community. Curiously, Edith Wharton found Jewett’s perspective unrealistically pleasant and an incentive to write Ethan Frome;

• Roger Koppl’s From Crisis to Confidence: Macroeconomics after the Crash (London: Institute of Economic Affairs, 2014) — an analysis of why Western growth continues to lag, despite many countries’ recovery from recessionary woes;

• Dwight Lee and Richard McKenzie’s Failure and Progress: The Bright Side of the Dismal Science (Washington, DC: Cato Institute, 1993) — a contemporary classic in public choice economics and capitalist theory, important for its examination of the role of present failure for future success and of the dynamic nature of the marketplace, influenced by market competition and political competition; and
• Christopher Snowdon’s Selfishness, Greed and Capitalism: Debunking Myths about the Free Market (London: Institute of Economic Affairs, 2014) — a marvellous debunking of progressive liberal myths concerning self-interest, ‘perfect knowledge’, GDP, and levels of poverty.

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It only remains to remind you to follow DMI on Twitter and on Facebook, and to wish all my readers good health and good fortune in 2015!

DMI Omnibus Update on Disraeli’s Birthday

Earl of Beaconsfield

While research and writing at DMI continue unabated, I have been remiss at sending out update notices for several published columns over the last several months. And so without further delay — and in honour of Benjamin Disraeli’s 208th birthday! — here are links to recent postings at the Institute of Economic Affairs and the Adam Smith Institute to get you caught up:

• ‘The organic roots of oaks and free markets’ takes a tongue-in-cheek Telegraph column and illustrates why the Conservative party’s modern icon of an oak tree is an excellent exemplar of the organic dynamism of free markets, and why a return to the ‘Thatcher torch’ — representing the light of liberty — is a bad omen if taken to mean more robust government intervention in the economy.


• ‘Tax Freedom for the Poor!’ is an appeal to raise the threshold at which the low-paid begin to pay income tax — allowing them to keep more of what they earn will build their self-respect and act as a work incentive, while at the same time curbing the extent of government redistribution. (A second theme of this posting is that while the poor who earn less than the threshold will necessarily be removed from the income tax register, they nevertheless still do pay any number of ancillary taxes, which may itself be considered a good thing: An esprit de corps is fostered with their fellow citizens while making them conscious of the true costs of government.)


• ‘Without capitalism, can there be culture?’ argues that we owe much of our cultural attainment because of the free market and the division of labour which it encourages — not despite of them. (I will admit that other factors contribute to culture, too.) This avenue of defence will be familiar to students of Adam Smith and to admirers of Josef Pieper’s small classic Leisure: The Basis of Culture.


• ‘America’s Chief Magistrate and the Spirit of ’76’ looks at American politics from the perspective of the Founders’ vision of individual liberty and limited government. Intended to be a rather minor position, the Presidency has assumed powers never intended either for the Chief Executive or the Washington establishment. Intrusions into the actions of individuals and the marketplace are hallmarks of ‘government failure’ that only a spirited return to constitutionalism can avert.


• ‘Can Americans afford compromise on the fiscal cliff?’ demonstrates that, à la Laffer Curve analysis, if higher tax revenues are the object, then raising the marginal tax rate on the wealthy is not the answer; though Aristotle taught that compromise as a mean between deficiency and excess is oftentimes the route to realising the common good, when the options are between right and wrong there is only one option. (Cross-posted at Public Finance International.)

Well, that’s a wrap. A reminder, too, to join the discussion on DMI’s Facebook page (please sign-up if you are not already a member) and tell your friends and neighbours about us.

Wishing you a very Merry Christmas, Season’s Greetings, and all best wishes for 2013!

Public Choice Theory and Lords Reform

While preparing my partial study, Reform of the Senate of Canada: A Progressive Conservative Perspective, it struck me how amenable public choice theory is for Anglo-Canadian proponents of appointed upper chambers. This appeared to be an unexplored avenue well-worth following up, and the result is House of Lords reform: lessons from public choice theory.

Public choice — the application of economics to politics — has two main principles:

First, it argues that we are all motivated primarily by self-interest, whether in our private or public personas. An elected upper chamber, therefore, will not automatically be more selflessly devoted to the commonweal than an appointed chamber — indeed, on this point, who can fault the existing body? — and, given the incentives to solicit votes by offering electoral inducements, may be an even worse example of institutional democracy.

Second, in acknowledging the fact that markets are imperfect, public choice teaches that the answer is not necessarily to be found in the State: that ‘government failure’ is a more intractable problem than its market counterpart. Elected upper chambers, therefore, are no panacea for what ails us politically. In fact, they are probably a far worse option than the appointed chambers in the Westminster parliamentary tradition, especially for those who favour limited government and fear ever-more State intrusion into personal liberty.

(It puzzles me why libertarians disproportionately advocate for an elected upper chamber, unless, as anarcho-capitalists, they mischievously wish to undermine the political process through a ‘scorched-earth-policy’ approach, where the legislative work in both lower and upper houses grinds to a halt through deadlock.

Significant, too, is the tension between utilitarian, majoritarian democracy versus deontological questions of natural rights, to which more government will contribute and which libertarians — theoretically at least — should oppose in the name of freedom.)

I apply these public choice principles to the composition of the House of Lords, in my blog column for the British think-tank Institute of Economic Affairs. My thanks to Richard Wellings and Philip Booth for their assistance. An in-depth analysis will be published in Economic Affairs this autumn.

Click here for my full argument.