“Dick Rowland Image”
”Shoots (News, Views and Quotes)”
– Antitrust: The Case for Repeal
By Robert A. Levy
Cato Institute
Issue: February 2003
More than 30 years ago, Federal Reserve chairman Alan Greenspan
described U.S. antitrust laws as a “jumble of economic irrationality and
ignorance.” That assessment is especially applicable to today’s
information-driven, high-tech economy. CONTACT: Cato Institute, 1000
Massachusetts Ave., NW, Washington, DC 20001, 202/842-0200, fax
202/842-3490, https://www.cato.org
– Why Do We Regulate Insurance?
By Wayne T. Brough, Ph.D.
Citizens for a Sound Economy
Issue: February 2003
With technology and the marketplace in a state of flux, regulators are
re-evaluating the role of prior approval regulation. These efforts
should be encouraged; replacing the current system with a more
competitive system adds the flexibility necessary to respond to changing
market conditions and provide consumers better services at better
prices. CONTACT: Citizens for a Sound Economy, 1900 M Street NW, Suite
500, Washington, DC 20036, 202/783-3870, fax 202/783-4687, email
cse@cse.org, https://www.cse.org
Above articles are quoted from the Heritage Foundation, The Insider
2/2003, https://www.heritage.org
– Below is a letter to the editor of the Hawaii Tribune Herald submitted
by our friend Bill Hastings. It speaks for itself. And yes, Robert
Hastings is aka Bill Hastings.
Dear Editor:
My friend, Ed Clark, writes (April 3), “We come from different
cultures. …” After reading his letter, I concluded we must live in
parallel universes. I would like to respond to a few of his comments.
He blames the Bush administration for creating our current economic
problems. I remember distinctly the comments of some of the pundits
during those long weeks of November 2000 while we awaited the conclusion
of the Presidential election. Several said, “Whoever wins may be sorry,
as he will be blamed for the coming economic problems.” The downward
economic trend was apparent by the time Bush took office — he didn’t
create it. His administration was hardly responsible for the Enron and
Worldcom debacles. The corporate accounting fiascos that came to light
early in his administration largely occurred before Bush took office.
Ed writes: “We continue to lose as the wealth of this nation is
transferred from public to corporate control . . . .” Am I missing
something here? Since when has the wealth of this nation been under
public control? Some might wish it so; but last I checked, we still, by
and large, believed in private property and a free enterprise system.
“Tax money of the working poor is bestowed upon the least in
need”? The working poor don’t pay federal income tax — only their
contributions toward their own social security and Medicare benefits.
The bottom half of all taxpayers only pay about 5 percent of the total federal
income tax collected. That ought to pretty well cover the “working
poor.”
Ed and others have complained that the feds are not making
sufficient funds available to the states to fund state programs. This
is used also as an argument against the proposed federal income tax
cuts. I don’t get it. If the IRS takes less in income tax from us,
doesn’t that leave us more money with which to pay state taxes? Since
when is it the responsibility of the federal government to raise state
revenues? Or maybe the state Legislatures prefer to ask Uncle Sam for
money rather than justify raising taxes from their constituents. In the
end, whether we pay it to Washington or to Honolulu, it all comes out of
the same pockets.
Ed complains that we haven’t been told what the war in Iraq will
cost. Would he decide whether and when to fight based upon the budget? I guess we could then afford a cheap war, but not a more expensive one. Interesting concept. I rather thought we went to war when we couldn’t
afford not to — and not necessarily in terms of dollars.
Finally, Ed complains that the “government is unwilling to hear
the pleas of the people.” I find it refreshing that we have an
administration that leads. And while Bush may be ignoring some pleas,
he does seem to have the support of a substantial majority. It’s hard
to be in the minority. I know. I was there for a long time.
Sincerely,
Robert Hastings
Kamuela, HI, 885-6842
”Roots (Food for Thought)”
– Observations on Russia
Perspectives on Liberty
By Jon Utley, Atlas Senior Fellow
In Russia, believers in free markets are called “liberals,” in the
European sense of the word, and supply-siders are called
“ultra-liberals.” Many of the “ultras” sprung from a key group of 18
young economists who visited Chile in 1992 to learn from those who
implemented that country’s successful free market reforms of the 1980s.
Interestingly, it was at an Atlas workshop in Munich in September 1990
that Vitali Naishul (Institute for the Study of Russian Economy) was
introduced to a number of Chileans and other Latin Americans that
resulted in this meeting. My trip to Moscow last December, organized
with the assistance of Boris Lvin, Senior Advisor to Russia’s Executive
Director at the World Bank and a long time Atlas ally, is part of
Atlas’s continuing efforts to build links with advocates of free markets
and the rule of law in Russia, and to emphasize the helpful role that
can be played by public policy institutes.
Organizations of Note
There are several new and existing organizations doing fine work in
Russia to spread market-oriented ideas. Through Vadim Novikov, a Russian
student who visited Atlas last October, I met Alexander Kouryaev, an
important publisher and distributor of freedom books in Russia. Kouryaev
also translated Ludwig von Mises’ Human Action. With Novikov, he is
working now to found a new Mises Institute in Moscow. Another important
figure in the Russian free market scene is Yevgueny Volk, the Heritage
Foundation’s representative there, who was a speaker at Atlas’s 2nd
Annual Liberty Forum last year. Volk, together with other key Russians,
has founded the Friedrich von Hayek Institute (www.hayek.ru) in Moscow,
which will disseminate and promote Hayek’s ideas in Russia and perform
research in the theory and practice of neoliberal policies, a free
market economy and the rule of law. Other leading Russian free marketers
whom I visited included Yuri Kuznetsov who has written for Mises
Institute (Alabama) and has translated works of Murray Rothbard and Hans
Hoppe. Another important group that I contacted was the Moscow Public
Science Foundation (www.mpsf.org), which supports new think tanks as
well as publishing economic studies. I also had the opportunity to
attend a ceremony with top Jon Utley is pictured with Alexander
Kouryaev, who holds his translation of Mises’ Human Action.
Russian officials and scientists at the Russian Academy of Sciences
giving an honorary membership to Congressman Curt Weldon (R-Pa). Mr.
Weldon spoke about his many friends and visits in Russia and how Russia
was progressing towards freedom and prosperity. He recognized Edward
Lozansky, President of the American University in Moscow and Russia
House (Washington, DC), for promoting his membership.
Inside the Kremlin
Late one evening during my visit, I met inside the Kremlin walls with
Putin’s chief economic advisor, Andrei Illarionov. He is one of the
extraordinary young men leading Russia: a dedicated supply-sider and key
figure in the Russian reform movement, who has actively attended
meetings hosted by Atlas, the Fraser Institute, and other
market-oriented organizations. In our conversations, Illarionov argued
that Russia could reach 10% annual growth if it just cut negative
government interference in the economy and deregulated monopolies. He
described how the rules of the European Common Market pose a threat for
being too restrictive; for instance, Estonia had to modify certain
economic freedoms to obtain membership. Illarionov openly fights big
government interests and is immensely respected.
Russia, Then and Now
My first flight into Moscow was in 1988. The first vision of the city
was that of the ubiquitous apartment buildings rising suddenly from open
fields. Today, there seem to be hundreds of miles of suburbs spreading
out from Moscow in nearly every direction. While the rest of Russia lags
behind, other regions are prospering from trade and production of
certain minerals and agriculture. Russia is exporting wheat again for
the first time since 1914. Above all people have hope for a better
future. “Today, no one’s worried about politics; people just want to
make money,” said a Russian immigrant – now a New York investment banker
– on my Aeroflot flight returning from Moscow. “Before, everyone was
worried about the government: Would the Left come back? Would the Duma
[Congress] block reforms? What about NATO? What about the war in
Chechnya? Now they just say: ‘Putin will take care of it. Putin will get
re-elected in 2004. Putin is doing the reforms as fast as possible.'”
His comments were similar to others I had heard. Small businesses in
Moscow seem to thrive, but medium-sized enterprises suffer from masses
of regulations, fees and taxes which severely hurt chances for greater
economic growth and prosperity. The Duma Russia’s Congress) has called
for a comprehensive correction of the myriad regulations and laws which
effect business and plans, but many vested interests in the bureaucracy
oppose them. Many small businesses now prefer the status quo that they
know to a possibly competent government and efficient tax collectors.
(Many in the West fail to appreciate how difficult it is to root out
corruption, when small businesses view bribes as a form of insurance.
Corrupt officials on the take have a vested interest in seeing their
“clients” remain in business.) Victor Agroskin, another key supply-sider who works with Anatoly Levanchuk to edit an online Russian think tank publication,
www.libertarium.ru, explained to me how the bureaucracy shook down
businesses. Many laws were only edicts issued by certain government
departments and not published or even known by much of the public.
Requirements were only known to the inspectors. Regarding foreign
policy, I was told that Russians, by and large, regret the 1996 killing
of Chechen leader, Dzhokar Dudayev, because there is now no leader to
negotiate with. The rebellion has split up into fractional parties, none
of which have authority over the others. I also asked how Russians felt
about the U.S. Air Force in Central Asia and NATO expansion. The Moscow
Times reported that there were Norwegian, Danish and Dutch F-16’s at the
Kyrgistan air base -presumably representing NATO. The answer was always
that Russia’s military was concerned, but that most Russians didn’t
care. They constantly answer, “Putin knows what he’s doing, if he’s not
concerned then it’s alright for Russia.” Arcadi Murachev, who works with
free market institutes in other former CIS nations and runs the Krieble
Institute office complex, where many freedom think tanks have their
offices, said that Russians were content that the U.S. was fighting
Moslem terrorists and that this was helping Russia too. However, most
Russians suspect economic interests are behind U.S. plans to attack
Iraq. With USIA no longer funding libraries and information centers in
Russia, Atlas investors should consider working with Atlas and its
allies in Russia in order to encourage greater progress toward classical
liberal ideas in this crucial country.
– Role of Religion in Early Business Solutions
A World of Ideas
By Leonard P. Liggio
During the coming season of Passover and Easter, it is useful to examine
the relationship between religion and economics. Several think tanks,
including the Minaret of Freedom (founded by Dean Ahmad), Toward
Tradition (founded by Rabbi Daniel Lapin), and the Acton Institute for
the Study of Religion and Liberty (founded by Father Robert Sirico) are
engaged in this work. On the back cover of this Investor Report, we
share early correspondence about plans for the development of Acton, for
which Alex Chafuen and I became founding trustees.
In this column, however, I would like to focus attention on one
particular example of recent scholarship that has contributed to our
understanding of the rise of modern economic institutions. Professor
Avner Grief (Stanford University), a recipient of a prestigious
five-year fellowship from the MacArthur Foundation, has identified how
the problem of agency — creating trust among unfamiliar partners — was
overcome to enable a vast expansion of international trade during the
eleventh century.
Professor Grief’s scholarship has centered upon the Geniza documents,
commercial agreements among Jewish merchants in Cairo from the 9th to
13th centuries AD. Since the name of God was stated in these agreements,
they took on sacred status and could not be destroyed. These papyri were
deposited in the storeroom (geniza in Persian, derived from the Arabic
word kanz for treasure) of the Old Synagogue of Old Cairo, then were
removed unsystematically in the late nineteenth century, and ended in
five great collections and other smaller ones.
These documents show that the Jewish merchants of the period, called
Magrabi (or western) traders, were doing business with the emirates of
Tunis and Palermo (to the west) and Baghdad, Aden and India (to the
east). In the words of Avner Grief: “The geniza contains more than one
thousand documents which reflect the eleventh-century Mediterranean
trade. These documents depict this trade as free, private, and
competitive. The authorities’ stance with respect to international trade
reflected the tolerance and liberalism that characterized the period.
Moslem rulers, especially the Fatimids (who ruled North Africa, Sicily,
Egypt, and Palestine), sought to promote trade and no official
restrictions fettered migration or the transfer of raw material,
finished goods, or money across the Mediterranean. Both transportation
and mail delivery were competitive and largely private, and shipping was
available even to a small merchant, who could rent storage space on a
ship. The trade within each trade center was free and competitive, with
many buyers and sellers interacting in bazaars and storehouses, where
they negotiated and competed over prices, using brokers, open-bid
auctions, and direct negotiations.”(1)
But how did this trade take place, given the problem of agency – the
risk that one partner in the enterprise would disappear with goods or
money? It was common at the time for an older partner to contribute 2/3
of the capital for a trading venture, with ayounger partner contributing
1/3 as well as his time and trouble to travel abroad. The simplest
solution, even today, is to limit one’s financial partners to one’s own
family.
The Geniza documents show that Maghribi traders used the common bond of
shared religious and family ties to expand the circle of agents with
whom they could trust in trading ventures. Often the younger partner
selected, was, when not a son, a nephew. Since the younger partner was
tied so closely to the capitalist by synagogue and family bonds,
defection was made very costly and permanent, as one could not ever
return to one’s community whether in Cairo or where ever Maghribi
traders resided.
There are seven thousand self-contained Geniza documents, mostly written
in Arabic with Hebrew letters. Many are partnerships or contracts made
in a formal declaration; others are rabbinical court cases adjudicating
disputes. The most accessible source of these documents is the
six-volume collection, A Mediterranean Society: The Jewish Communities
of the Arab World as Portrayed in the Cairo Geniza, edited by the late
S. D. Goitein (Berkeley, CA: University of California Press, 1967),
reissued in paperback in 1999. Goitein notes that:
“…the most common type of literature found in the Geniza, the
so-called responsa, or “answers” of authoritative scholars on questions
of religious, legal, or general character addressed to them. The
responses and their Muslim counterparts, the fatwa’s, or opinions of the
muftis, were collected in books, which, in Judaism and Islam, fulfill a
role similar to collections of cases and decisions of high courts in
English and American law …the responsa of Moses Maimonides
(1135-1204)(2) and his son Abraham (1186-1237)… [were actually] legal
decisions in the Geniza synagogue” (S.D. Goitein, A Mediterranean
Society, pp. 13-14).
The enduring importance of religion in economics remains a fruitful area
for study. In medieval open society, markets flourished on the basis of
personal and family reputation. From credibility to global brands,
personal judgments determine the failure or success of an enterprise.(3)
(1) Avner Grief, “Reputations and Coalitions in Medieval Trade: Evidence
of the Maghribi Traders,” The Journal of Economic History, Vol. XLIL,
no. 4 (Dec., 1989); reprinted in Daniel Klein, ed., Reputation: Studies
in the Voluntary Elicitation of Good Conduct (Series in Economics,
Cognition and Society, edited by Timur Kuran), Ann Arbor, Michigan,
University of Michigan Press, 1997, p. 140.
(2) Moses Maimonides was born in Cordoba, Spain, and spent much of his
life in Cairo where he served as physician to the Sultan, Saladin, who
replaced the Fatimids. As a renowned scholar, one who acknowledged his
philosophical debt to Aristotle yet strove to preserve and order Jewish
learning with respect to the divine law, he had a great influence on
medieval thought.
(3) For a contemporary example, regarding how rabbinical courts and
exclusion animate relations among New York’s Jewish diamond dealers, see
Lisa Bernstein, “Opting out of the Legal System: Extralegal Contractual
Relations in the Diamond Industry,” Journal of Legal Studies (vol. 21,
1992, pp. 115-57).
Above articles are quoted from the Heritage Foundation, Atlas Investor
Report Spring 2003, www.atlasusa.org
”Evergreen (Today’s Quotes)”
“Advice is like snow; the softer it falls, the longer it dwell upon, and
the deeper it sinks into the mind.” — Samuel Taylor Coleridge
He who hesitates… “Do not wait for ideal circumstances; they will
never come; nor for the best opportunities.” — Janet Erskine Stuart
”’Edited by Richard O. Rowland, president of Grassroot Institute of Hawaii. He can be reached at (808) 487-4959 or by email at:”’ mailto:grassroot@hawaii.rr.com ”’For more information, see its Web site at:”’ https://www.grassrootinstitute.org/