What is it that you do to practice on an almost everyday basis, that is akin to how a classical concert pianist would practice scales? How can you get others to notice this talent you hone- especially one who might fund your talent? In this episode, EconTalk host Russ Roberts welcomes back Tyler Cowen to talk about his new book Talent, co-authored with Daniel Gross. The conversation also highlights Cowen’s new VC-esque project, Emergent Ventures, though which Cowen is seeking not just talent, but transformational talent. Along the way, Cowen describes his unconventional interviewing process, what he looks for in a grant recipient, and why he thinks knowing how many tabs are open on your computer might be the best indicator of interest.     1- Roberts and Cowen agree that finding talent is more an art than a science, but how does Cowen define  it? Why is the question of what and how much someone practices of such importance to Cowen?   2- Cowen and Roberts spend a good bit of time discussing the emotional side of interviewing, and Cowen’s own idiosyncratic style of “unstructured” interviews. To what extent are interviews overrated today? What makes someone a good interview for Cowen? (And perhaps of most interest, who amongst YOU wants to be the next Russ Roberts??? We’ll need to set up a Zoom…)   3- Is meritocracy- out of fashion in 2022? Do we overrate credentials in modern economies? When Cowen says of credentialism, “it’s a barrier to minorities,  a barrier to women who had children earlier, who had children at the wrong time, or who left school to raise families. And, it’s one of the worst things we do in American society,” what does he mean? To what extent do you think this is true?   4- What’s the difference between stamina and grit for Cowen, and why might stamina be a negative characteristic?   5- Cornucopia question; take your pick: What do confession and therapy have in common? How can Zoom interviews sometimes be better than in-person interviews? How is status different in Zoom than in person? How much does humor correlate with success?     (0 COMMENTS)

I often discuss explicit taxes on thrift, such as taxes on capital income. Many of these taxes discourage saving by applying a higher tax rate on future consumption than current consumption. But there are also many hidden taxes on thrift, as when government benefits are denied to people on the basis of a lack of “need”.Many recent college grads are about to get a $10,000 gift from the federal government. My daughter won’t receive that gift, because her parents were thrifty and hence she did not borrow money to go to college.Today, I feel like a sucker. If only I’d encouraged her to borrow $10,000 for college. I guess public choice theory is not my forte, as I never saw this coming.  I wonder if Bill Gates was smart enough to have his kids borrow $10,000. There are many other examples of government benefits that are based on “need”.  I use scare quotes for need because in almost all cases the criterion is not truly need, it’s at least partly related to thrift.   And because (on average) the total lifetime earnings of college students exceeds the earnings of those who didn’t go to college, it’s not obvious that debt forgiveness has any merit on “equity” grounds.  As for efficiency, this policy not only reduces the incentive to save, it encourages colleges to be less careful about holding down costs. (0 COMMENTS)

One would think that if “climate change” (after “global warming,” the preceding hole in the ozone layer, and the population bomb of the 1960s) represented a major challenge for mankind in the minds of the reigning angelic statocrats, if time were of the essence, petty considerations of domestic protectionism would play an infinitesimally small role in policy decisions. But apparently not. The Financial Times notes (“The Problem with Biden’s EV Subsidy: Hardly Any Cars Will Qualify,” August 23, 2022): The law signed by President Joe Biden last week immediately requires that any EV sold in the US must be assembled in North America to qualify for the credit. The requirements grow stricter in 2024, when eligible EVs must have battery components not made or assembled “by a foreign entity of concern”, which includes China, the dominant battery producer. In 2025 those batteries must exclude “critical minerals” extracted, processed or recycled from the same foreign countries. An increasing share would need to be from North America or selected trade partners. The basic economics is simple: If foreign competition were not restricted, the supply of EVs would be higher for any amount of subsidization by the US government. So, if we believe the official line, carbon emissions would be reduced, and mankind would live. (0 COMMENTS)

In a recent comment, Jim Glass make a few critical points about libertarian’s approach to policy implementation, particularly a tendency among libertarians to argue for the abstract ideal while paying insufficient attention to the messy real world process of moving towards that ideal. I agree that libertarians are certainly prone to this, although I’m not sure it’s more common among libertarians than anyone else along the political spectrum. However, there is one part of his comment where I think an additional perspective is worth considering. Glass notes, citing research from Jonathan Haidt, that libertarians rank the lowest “in empathy and compassion.” Accusations of lacking compassion is not an uncommon thing to hear. And there’s certainly some truth to it for some libertarians. I’d be lying if I said I’d never met any libertarians who really did fulfill the stereotype of the cold-hearted brute, indifferent to the suffering of others. But there’s another take I have in mind. To tie it all together nicely, I’ll also cite something from the work of Haidt. In his book The Coddling of the American Mind, Haidt talks about peanut allergies and how various institutions have reacted to them. Years ago, if you had a nut allergy, it was up to you to make sure you avoided peanuts. In more recent years, and some would say more compassionate times, things have moved in the opposite direction. I’ve been on flights where it was announced that because there was a single passenger on board who had a peanut allergy, peanuts would not be made available to any passengers. Not only that, but passengers were forbidden from even bringing their own peanuts onboard. Haidt cites research suggesting the substantial increase in nut allergies in recent years is actually a result of this very form of compassion. He writes: It was later discovered that peanut allergies were surging precisely because parents and teachers had started protecting children from early exposure to peanuts back in the 1990s. In February 2015, an authoritative study was published. The LEAP (Learning Early About Peanut Allergy) study was based on the hypothesis that “regular eating of peanut containing products, when started during infancy, will elicit a protective immune response instead of an allergic immune reaction.”…The immune system is a complex adaptive system…It requires exposure to a range of foods, bacteria, and even parasitic worms in order to develop its ability to mount an immune response to real threats (such as the bacterium that causes strep throat) while ignoring nonthreats (such as peanut proteins). I don’t have the requisite medical expertise to judge how authoritative this study was, but for the sake of thought experiment, let’s assume these findings are correct. If being ever more protective of nut allergies leads to a situation where a greater and greater percentage of the population will end up suffering from that very condition, then it’s not at all clear that such protective efforts are the truly compassionate approach. It can be argued that the older approach is in fact what a maximally compassionate person would prefer, given the constraints we face. Adam Smith wrote in The Theory of Moral Sentiments that what we consider compassionate or merciful can change when we take a step back and consider the larger picture. Using the example of how we might feel pity for a criminal facing the terror of his judgment, Smith writes (emphasis added): [The compassionate] are disposed to pardon and forgive him, and to save him from that punishment, which in all their cool hours they had considered as the retribution due to such crimes. Here, therefore, they have occasion to call to their assistance the consideration of the general interest of society. They counterbalance the impulse of this weak and partial humanity by the dictates of a humanity that is more generous and comprehensive. They reflect that mercy to the guilty is cruelty to the innocent, and oppose to the emotions of compassion which they feel for a particular person, a more enlarged compassion which they feel for mankind. To one perspective, saying we should be less proactive about nut allergies might seem lacking in compassion or empathy. But to another perspective, that seemingly uncompassionate approach can be motivated by a compassion that is, in Smith’s words, more generous and comprehensive, a more enlarged compassion felt for all mankind. I think many libertarians are motivated by this more generous and comprehensive view of compassion. If libertarians were truly indifferent to the suffering of the poor and weak, as is often alleged, it’s very odd that so many libertarians spill so much ink arguing about why libertarian policies would be especially beneficial to the poor and weak. Nor does it make much sense why libertarians object that so much of the state’s intervention is on behalf of the rich and politically powerful, often at the expense of the poor and politically weak. Again, I’m not claiming this is the sole motivation for every libertarian. But it is a real motivation, and a strong one. And I find it’s arguments rooted in this motivation which libertarianism’s opponents are most likely to overlook and least likely to engage.   Kevin Corcoran is a Marine Corps veteran and a consultant in healthcare economics and analytics and holds a Bachelor of Science in Economics from George Mason University. (0 COMMENTS)

North Las Vegas authorities demolished a community of tiny homes that sheltered the homeless because the 50-square-foot structures didn’t meet the minimum home size required by law or conform to other strict housing regulations. The situation showcases how government often thwarts private solutions to homelessness and poverty. The tiny homes were built on private property owned by the nonprofit New Leaf Building Community. New Leaf’s structures are small and basic, featuring four walls, one window, and a front door that locks. But despite their small size and lack of amenities, they could be life-changing for people previously living on the streets. “Now I sleep on the damn sidewalk because of this!” a man who had been living in a New Leaf home told KTNV Las Vegas. This is from Elizabeth Nolan Brown, “Tiny Homes for Las Vegas Homeless Demolished Over Code Violations,” Reason, August 23, 2022. More background: The New Leaf homes were built on private land by volunteers. The idea was to provide homeless people with “a place to call home,” said New Leaf leader Joseph Lankowski. “They had a tiny home where they could lock the door, so then they could actually go out and get services without having to worry about getting your things stolen or anything like that.” Lankowski raised funds to buy the land after other options failed. In November 2020, the government destroyed 28 tiny homes New Leaf built on public land that had for years housed a homeless encampment. New Leaf then tried building tiny homes on trailers that could be parked in public parking spaces, but police started towing these. “And because their whole argument was property, you know, ‘This is our property. It’s not your property.’ And we said, ‘Okay. We’ll buy our own property,'” he told KNTV. Read the whole maddening thing. (0 COMMENTS)

Paul Simon once wrote a song entitled 50 Ways To Leave Your Lover. I imagine there are at least 50 ways in which the Bank of Canada could be abolished. Let’s start with the most implausible method: 1. Monetary nihilism:  The Bank of Canada (BoC) could suddenly announce it was closing up shop, washing its hands of any role in the monetary system.  It could tell Canadians that they are free to construct any system they like.  Counterfeiting would be legalized. The legalization of counterfeiting would almost immediately reduce the value of Canadian currency and Canadian bonds to roughly zero.  This option would be extremely unpopular and obviously will not happen.  So let’s consider some more measured approaches to getting the Canadian government out of the monetary system. 2. Auction the BoC:  The BoC could be auctioned to the highest bidder. Counterfeiting would remain illegal.  Banking would be deregulated so that competing entities could offer competing currencies. I’m not quite certain what would happen in that case, but here’s my best guess.  The BoC would be bought by a consortium of large Canadian banks.  Perhaps there would be a board that determined the BoC’s monetary policy, and each commercial bank in the consortium could have one voting member.  But lots of other options are possible.  Perhaps the BoC would be bought by a large US firm or a large Chinese firm.  I just don’t know. Due to network effects, I would expect that the Canadian dollar would remain dominant in Canada.  The biggest question mark is inflation.  Many studies have been done estimating the profit-maximizing rate of inflation (aka seignorage), and all the estimates are extremely high figures.  (I don’t recall the exact estimates, but it’s on the order of 100%/year, not merely high in the sense that our current 8% inflation is high.) On the other hand, with complete laissez-faire perhaps the profit-maximizing rate of inflation would be lower for the new BoC than for monopolistic central banks.  Nonetheless, I’m almost certain it would be a relatively high figure.  Network effects in currency are extremely powerful, and it’s hard to competing currencies to gain much traction until the dominant currency is very badly mismanaged–like Zimbabwe or Venezuela bad.  Perhaps the following thought experiment would make it easier to see my point:  Consider a central bank deciding between two options:   A.  Increase the monetary base at 4%/year. B.  Increase the monetary base at 20%/year. Option B will provide more seignorage unless it reduces base demand by more than 80% as a share of GDP.  That would be a huge reduction in base demand.  Is the amount of money you typically carry in your wallet highly sensitive to the inflation rate?  Probably not.  Studies show that people carry less cash as a share of GDP at higher inflation rates, but not dramatically less.  That’s why the profit maximizing inflation rate is so high.  (This is true for many products—the revenue maximizing tax rate for cigarettes is also very high.) Of course the Canadian government could auction off the BoC with a legal restriction on how fast the monetary base could be increased.  But if the government has such specific macro goals, then why auction the BoC in the first place?   3.  A fresh start:  Let’s say you buy my “network effects” argument, and wish to make a fresh start in Canada with a level playing field.  You want to abolish the Canadian dollar and give each alternative system an equal chance of success.  In that case, Canadian dollars could all be redeemed for assets of roughly equal value.  This is how individual European countries got rid of their national currencies.  But instead of being paid off with a new money (euros), Canadians could be paid off with some existing asset, such as silver bullion, Bitcoin, or equities in a global stock index fund. In that case, I’d expect the Canadian public to spontaneously adopt the US dollar.   I cannot be certain—perhaps they’d adopt the gold standard—I just think the US dollar is the most likely winner in an open contest for the Canadian public to pick a new monetary regime.  If this transition occurred in Denmark or Sweden, their public would probably adopt the euro.  This is just 3 of the 50 ways that Canada could get rid of the BoC.  I have no doubt that there are at least 47 others.  And note that these are not three outcomes that might occur spontaneously.  The Canadian government would have to decide how it plans to fold up shop.  I get annoyed with libertarians who seem to think it’s possible to just wave a magic wand and move from a government fiat monopoly to a laissez-faire regime.  Hard decision about what to do with the existing monetary base and the existing stock of Can$ denominated debt are unavoidable. Some commenters tell me I’m wrong because free banking regimes have worked.  They don’t seem to read my posts very carefully, as multiple occasions I’ve said I favor 100% free banking.  Some commenters advocate a national gold standard, and cite evidence that an international gold standard once worked.  They seem to have no idea that the success of an international gold standard has no bearing on the question of whether a national gold standard would work.  (Hint, it would not work very well.)  Others seem to think that a gold standard with an official price of gold is laissez-faire.  It isn’t, under laissez-faire the market would decide whether it preferred to use gold as money. The fact that commenters seem unable or unwilling to describe in detail how the government will extricate itself from the existing monetary system makes me think they underestimate the complexity of what they are asking for.  Removing the government from money is far more complex than removing the government from something like passenger rail.  Amtrak could simply be auctioned off—dozens of countries have done something similar.  It’s far less clear as to what it would mean to remove the government from money.  The US has more than $20 trillion in debt, which involves promises to pay a very specific type of money as far as 30 years out in the future.  It’s often said that, “You may not be interested in war, but war is interested in you.”  The same is true of the US dollar. Some might argue that this post shows three ways that the Canadians could achieve monetary laissez-faire.  I see it as showing one implausible option, and two others that are either fairly similar to what they have now, or even worse. PS.  You might think that I am too pessimistic about outcomes that move us away from fiat currencies.  And yet most of the libertarians that advise real world governments–even those who view me as insufficiently libertarian—recommend reforms linked to a fiat currency.  This might recommend that El Salvador dollarize or that Argentina adopt a currency board.  None of these options get us out from under the yoke of a government fiat money central bank.      (0 COMMENTS)

Last week, I noticed that there’s a measure on the November ballot to impose a sales tax on revenue earned by cannabis dealers in Pacific Grove. I went on the Pagrovia Facebook site to ask if anyone was writing a ballot argument against it. An aside on ballot arguments: In California, when you get your sample ballot in the mail in September, it’s quite thick because typically each proposition has someone or some people arguing for or against it. When I moved to California from Canada in September 1972, and one of my fellow Ph.D. students brought his thick set of ballot arguments to UCLA, I thought this was the one of the strangest things I’d seen. In those days I thought of Canada as being more socialist than the United States. I still do. For that reason I was surprised that various levels of California governments used tax dollars to subsidize the propagation of particular viewpoints. Back to the issue. One person on the Pagrovia site answered that he might be willing to sign if I did the hard work of writing. What made this offer particularly interesting to me is that he and I have tangled before in front of the Pacific Grove city council. I’m an avid pickle ball player who wants the city government to allow us to use some of the tennis courts for pickle ball. He lives by the courts, can’t stand the noise, and opposes allowing us. On the Pagrovia site a few months ago, I had said something nice about him and he reported it, without mentioning me by name, in his local newspaper. I always like reaching out to former political opponents and so this offer from him interested me. I wrote up the argument and took it to his place. He answered the door and we had a nice conversation. He quickly realized that he had thought I was writing an argument against a different measure, namely the measure to allow cannabis sales in Pacific Grove. So he wasn’t interested in signing. He pointed out, though, that probably the same people were behind both measures. Some people wanted to allow cannabis sales and they figured out that the way to sweeten the deal was to tell Pacific Grove voters that the city government budget would increase with the sales revenues. The city government is always trying to figure out ways to extract more money from us. Why not combine them in one measure? Possibly because sometimes there’s a rule against including disparate items in one proposition. That made me rethink. On the one hand, I wanted the government to allow sales. (I hadn’t known that they weren’t allowed; I’m not typically in that market.) On the other hand, I didn’t want the discriminatory tax. I had pointed out in my ballot argument that the proposed 6 percent tax on gross revenues is not small, but huge. I linked to this 2018 post by AEI economist Mark Perry. But what if my ballot argument persuaded people to be against the tax and against allowing sales? That was a dilemma. I had very little time to think it through. The deadline was the next day at noon. I let the deadline pass and didn’t submit the argument, even though a California friend of mine, who has written ballot arguments to successfully fight a number of tax measures, thought it was really good. For those of you who agree with me that sales should be allowed and that there shouldn’t be a discriminatory gross revenue tax against sellers, did I make the right call? Another aside: Fun ending to my conversation with the pickle ball opponent. He said, with a twinkle in his eye, that the big thing that divided us was not cannabis but pickle ball. I grinned and said, “Yes, but in a sense we both won. We get to play on Monday, Wednesday, and Friday, and you get peace and quiet the rest of the time.”   (0 COMMENTS)

Per Bylund’s latest book titled How to Think about the Economy is a short introduction to the Austrian School of Economics at just under 150 pages. It contains chapters on entrepreneurship, economic calculation, the business cycle, regulation and most of what usually occupies scholars of this tradition. It aspires to achieve economic literacy in a quick and reader-friendly way.  Many people will know him for his books The Problem of Production: a new theory of the firm and The Seen, the Unseen, and the Unrealized: How Regulations Affect Our Everyday Lives. He is also a fellow of the Mises Institute. Professor Bylund’s appealing writing is suitable for a newcomer to economics. He manages to make concepts simple enough so the inexperienced reader can understand them, but not so simple as to become meaningless. The knowledge gained from the book will be enough for readers to then move to other Austrian school books. At the end of the book, Bylund has supplied us with a useful list of related readings. I suggest giving it a look for those interested in further learning. My personal suggestion would be going to Economics in One Lesson after finishing this.  It is inevitable that people will compare this book with other primers on Austrian economics and free market economics more broadly. Indeed, there are so many pop econ books out there- why is this one special? Why not Robert Murphy’s Choice: Cooperation, Enterprise, and Human Action or Introduction to Austrian Economics? These are just a small part of a huge list of books that fit this category. I liked this book because it was entertaining to read, and Bylund is straightforward and easy to follow. He doesn’t bombard you with information. It can be easy for someone new to economics, or any other field of study, to get lost if too much is presented at once. This book is a good stepping stone for attempting more complex works later on. One thing that every reader should keep in mind is that he or she is reading an introduction to Austrian economics, which in many ways differs significantly from the orthodox approach. Per Bylund’s analysis of praxeology, business cycle theory, monetary intervention, and the minimum wage- among others- will go against what is commonly taught in most introductory economics curricula. Does this mean that the Austrians, and Bylund specifically, are wrong? This is a question too difficult to fit in a book review, but my short answer would be that it is a very good approach which, if not adopted, should at least be studied meticulously. The Austrians from Carl Menger to Murray Rothbard have taken part in the majority of important economic debates, and their writings on all important issues from marginal utility to economic calculation are always interesting to dive into.  One minor issue I would like to point out is that since this book is an introduction to the Austrian school specifically, it does not cover some commonly discussed issues like international trade or income inequality. The reader will not find much trouble learning about these topics from other more mainstream books or online resources, but this needs to be pointed out . Who should read this book? If you want an introduction to Austrian economics, then by all means go ahead and read it. If you want an introduction to mainstream economics, try something else and you may read the book at a later date when you have a more solid grounding in the orthodox approach.   Chris Loukas was born in Greece and is an economic journalist and recipient of a bronze medal in the 2022 International Economics Olympiad. His articles have been featured by the Foundation for Economic Education, the Mises Institute and Adam Smith Works. (0 COMMENTS)

In Russ Roberts’ wonderful new book Wild Problems, he offers a great deal of insight into the limits of algorithmic or rational decision making as traditionally understood by economists and other social scientists. Early on, he describes how some great minds attempted to deal with major life choices by making a list of pros and cons and weighing them against each other. This section really spoke to me and my experience, because it reminded me of my own attempt to make a major decision this way. Several years ago, my wife and I were looking to buy a house. It would be our first time doing so, and we knew that it was a big decision we’d never made before. Luckily, we thought, we were ready, because we’d gotten data! Well before we were seriously searching for a home, we would make a habit of touring open house events. At each house, our goal was to simply notice our reactions to various features. What did we like? What did we dislike? Was the reaction strong or weak? We would compare notes after each house, and find common points. We took all this information and wrote out a master checklist. We didn’t just have pros and cons – we had subcategories for each. Items in the pro list could be categorized as a must-have feature, or a nice-to-have feature, or something to be added in later if missing, and so on. Similarly, on the negative side, there were deal breakers, or things to avoid if possible, features that can be removed, or minor annoyances but workable, and so on. Pros and cons were put into their various categories, they were ranked in order within those categories, and then, for good measure, each data point assigned a value of one to ten. With all this data gathering and analysis, surely our first home purchase went swimmingly. Right? As you’ve probably guessed, no, it did not. Within months, we realized we had made a bad choice. We stayed in that house for a few years before selling it and moving on. Our attempt to use lists and ranking to make a good decision was a total failure. But why? There are a few things we have since come to realize. First, expectations are no substitute for experience. Unfortunately, experience comes as a result of your decisions- after you make them. Having never bought a house before, our list could only show what we expected to enjoy or dislike. But expectations aren’t always met. Some things you thought would be major selling points at first turn out to not matter much, and some things which you expected to be at worst minor annoyances can turn out to be deal breakers in practice. It’s only after you experience these things when you find out which is which. On a closely related point, not all experiences are transferable. I’ve lived in a wide variety of places in my life. Trailers, brutalist concrete barracks, dumpy apartments, decent apartments, and for one very nice stretch, a condo on the waterfront of a North Carolina beach. I thought this wide variety of living conditions gave me plenty of insight into what I would want from living as a homeowner as well, but I was simply wrong about that. Another issue is one of radical ignorance – the things you don’t know that you don’t know. There were things about the house which we realized should have been on the con list, but simply never occurred to us. Nor were they things we could feasibly have noticed or learned about by simply touring open houses. It’s only in the process of living in a space that you come to discover these things. A pro and con list can only show you what’s occurred to you to put down on the list. All the things that haven’t occurred to you to list, good or bad, will never be reflected. And you can’t know how large that hidden list is, even in principle, because some of the items which should be on it don’t exist yet. They will only come to exist in your future experience. One more complication is that you can’t know what the future will bring. One thing my wife liked was the yard space – it had a lot of potential for gardening. She had visions of building a beautiful garden, a place where she could spend spring mornings reading a book and sipping on coffee and enjoying the sunshine. And it very nearly worked out that way. What we didn’t know, and couldn’t have known, is that around the same time her garden was coming to fruition, a new neighbor would move in directly across the street who owned perhaps the loudest lawn equipment in the history of mankind and seemed to be under the impression that lawns needed to be mowed on a near daily basis. Almost without fail, every attempt to enjoy a quiet morning in the garden would be met with the overpowering sound of a gas-powered lawn mower or leaf blower. So, was buying that home a mistake? In Russ Roberts’ framework, the answer is no, not really. As he says towards the end of his book, there’s a difference between making a mistake and making a choice that just doesn’t work out. Sometimes your decisions don’t work out as you hoped they would, for reasons you simply couldn’t have known. That’s not making a mistake, it’s just an experience of the human condition. Our home buying experience gave us an insight into how often some choices can turn on the roll of the dice, in ways you can’t anticipate. And I’m glad it did. What if instead, everything had worked out exactly as we had hoped? We might have been left with the impression that we had nailed the home buying algorithm, never knowing how much of our apparent success was down to simple luck. The experience we gained left us a little wiser, and gave us a better appreciation of how expectations and experience can collide. And in the end, isn’t that a better, more enriching outcome?   Kevin Corcoran is a Marine Corps veteran and a consultant in healthcare economics and analytics and holds a Bachelor of Science in Economics from George Mason University. (0 COMMENTS)

The U.S. Constitution’s Preamble states that government must establish justice and promote the general welfare. The Preamble reads in full: We the people of the United States, in order to form a more perfect union, establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity, do ordain and establish this Constitution for the United States of America. In other words, the Constitution seeks to establish justice and promote the general welfare by specifying the fundamental laws of the nation. And the laws that the Constitution lays down strictly limit and enumerate the powers granted to the government. All powers not thus enumerated are left to the states and to individuals. It is the Constitution’s rule-of-law framework, under which the role of government is to be limited, and people are to be treated equally that ensures justice and the general welfare.   The Constitution does not dictate the nation’s economic system; we are not bound to be a capitalist society. Amendments 4 and 5 provide explicit protections for private property: Amendment IV The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized. Amendment V No person shall be … deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation. Inherent in property rights is the right to use one’s property as one chooses – even if one chooses to employ it to make a profit.   Social Security and Medicare are just like private insurance plans. No. Private insurance companies place their customers’ premiums in wealth-creating investments and then pay their claims from the profits. Social Security and Medicare, by contrast, are pyramid schemes. Payroll taxes go to the Treasury where they are comingled with other government revenues and then spent. There is no meaningful investment. All claims are paid out of current revenue, borrowed money, or newly printed money. Both programs rely on increasing numbers of workers paying into the system to support retirees. And both programs are facing the same demographic problem as the ratio of workers to recipients drops. By 2034, it is expected that there will be only 2.0-2.3 workers per recipient. Moreover, both Social Security and Medicare tax the young to subsidize the elderly. As a group, the elderly in this country are far wealthier than are the young. Taking money from the (relatively) poor and giving it to the (relatively) wealthy is not justice.   The U.S. needed central planning along with wage and price controls to win WWII. The U.S. government largely left the arming of the country to private industry (see, for example, Freedom’s Forge: How American Business Produced Victory in World War II, by Arthur Herman). We were able to outproduce our enemies in part because our industries were far less regulated than theirs and because businesses were often able to get around the regulations. For example, they overcame wage controls by offering benefits (e.g., retirement plans and health insurance) to the employees they needed. Socialists often wax nostalgic about WWII.  And, given their beliefs, it makes perfect sense.  It was a time when people were united behind a government that was leading them toward a common goal.  Wars and natural disasters send us to the bottom of Maslow’s Hierarchy (survival), so people’s aspirations get very basic.  Given that, uniting people behind a common cause is simple. In good times, however, people’s interests and priorities become diffuse.  Hence socialists’ need for William James’ “moral equivalent of war” as a means of creating unity.  As a result, we had one “war on ” after another.  If there is no crisis to unite people, politicians will invent one.   Richard Fulmer worked as a mechanical engineer and a systems analyst in industry. He is now retired and does free-lance writing. He has published some fifty articles and book reviews in free market magazines and blogs. With Robert L. Bradley Jr., Richard wrote the book, Energy: The Master Resource. (0 COMMENTS)