Famine In North Korea

North Korea is on the verge of famine. According to the United Nations up
to 4.7 million people are at risk of starvation this summer unless North Korea
gets massive food assistance.

Why are so
many North Koreans so close to starving? The pat answer is that floods of agricultural
regions in 1995 and 1996 hurt agricultural production. A better answer is that
North Korea’s repressive, backward system of government prevents people
from adapting to changing conditions.

Starvation in the 20th century has almost exclusively been caused by actions
taken by governments, and North Korea’s situation is no different. Since
the early 1960s North Koreas has followed an ideology of chuch’e
— a combination of self-reliance and autarky that has proved stifling to North
Korea’s economy.

Combined with a military and industrial policy designed to shift workers toward
industry and away from agriculture, the North Korean government has done everything
in its power to ensure that any floods or drought will be followed quickly by
widespread famine. North Korea is one of the few places in the world which still
attempts collectivized agriculture and now it is paying the price.

The emphasis on industry hasn’t gotten North Korea very far either. Although
some observers note that North Korea’s economy has grown quite a lot since
the early 1960s, they fail to note the growth is largely explained by increases
in inputs such as labor and raw materials rather than improvements in efficiencies
and productivity. As a result, North Korea’s exports are extremely low
and North Korea is unable to use trade to make up for any food shortages.

The lessons of 20th century famines are clear — excessive state intervention
in the economy in general and the agricultural sector in particular can have
deadly consequences.

The Oil Glut

Of course the world is running out of oil and the entire fossil fuel economy
is on borrowed time, which makes me wonder why there’s still so damn much
of the stuff around. A July 8 story by Reuters Information Service reported
that even with a rise in U.S. demand for oil, crude prices declined dramatically
this spring and are expected to fall even further when Iraq resumes exporting
oil.

The International Energy Agency
reported that its revised forecast of 1997 world oil demand was 73.8 million
barrels per day. At the same time world oil inventories rose an estimated 1.6
million barrels per day in the second quarter of 1997. The Washington-based
Petroleum Finance Company said, “… crude production will outstrip demand
by an average of one million bpd in 1997.

The result was predictable — crude oil futures have fallen 30 percent in 1997,
hitting a low of $17.32 in mid-June.

Shugars’ Vote Correct on Minimum Wage

       Feb. 16 columnist Charlotte
Channing reported that Democrats plan to use state Sen. Dale Shugars’,
R-Portage, vote against an increase in the minimum wage to target him
in next year’s election campaign.

       She quotes Michigan Democratic
Chariman Mark Brewer saying, “Today, Dale Shugars cemented his reputation
as an extremist” by voting against the minimum wage increase.

       What is “extremist”
about not forcing workers with few skills into unemployment? When did
protecting employment opportunities for the poor become an “extremist”
position?

       There is no great mystery about
the effect of minimum wage laws — over the long term, their net effect
is to raise unemployment for precisely those workers who, due to a lack
of skills, most need jobs.

       People such as Brewer make
a faulty assumption about raising the minimum wage. They assume that if
a business employes 10 people before a minimum wage increase, it will
continue to employ 10 people after the minimum wage increase. In some
business this will occur, but in most the owner will find a way to eliminate
employees until his labor costs are as low as what they were before the
increase in the minimum wage.

       One way an owner can do this
is by replacing human beings with machines. A machine that might not have
been cost effective when an employee was paid $3.35 an hour merits a second
look when the employer is forced to arbitrarily raise wage rates to $4.75
an hour.

       Other business will respond
by eliminating or consolidating positions, and not expanding their hiring
as quickly as they would have before the rise in minimum wages. Downsizing
is already prevalent in many industries, minimum wage laws only accelerate
that tend.

       Even when businesses don’t
reduce their staffs, the raise in minimum wage hurts people with few skills
by making low skill jobs attractive to more highly skilled people. Kalamazoo,
for example, has many college students in its job market. As the minimum
wage rises to $4.75, they will tend to compete more for jobs which seemed
unattractive at $3.35. The result, which has been documented by several
studies of states which raised the minimum wage, is to benefit workers
from middle class families at the expense of workers in poor families.

       Yet those who propose raising
the minimum wage portray themselves as the ones who care and are compassionate
about the working poor, while those, such as Shugars, who oppose a measure
harmful to the poor are excoriated as “extremists.”

       If indeed Shugars is an “extremist”
for opposing a measure which hurts the working poor, then what this state
needs is more extremists in the state Senate.

       This article originally appeared
in the Kalamazoo Gazette.

Free the Athletes – Scrap the NCAA

A group called Trial Lawyers
for Public Justice is suing the National Collegiate Athletic Association
(NCAA). The group claims that the use of Scholastic Assessment Test
(SAT) scores to decide who can play college sports discriminates against
black athletes. The real problem, however, is that the NCAA is a cartel
that harms the interests of all athletes, black and white.

The NCAA’s main goal is to reduce
the labor costs to member schools by providing athletes who earn next
to nothing, while bringing in millions of dollars in revenues to member
colleges and universities.

In its lawsuit, the trial
lawyers group notes that students who fail to achieve high SAT scores
are still eligible to act in school plays or any other assortment of
extracurricular activities. Somehow college drama clubs manage to survive
without any sort of national governing body. Why are sports different?

Because sports, unlike other
extracurricular activities, can earn millions of dollars for their universities.
The huge sums of money involved, however, put universities and colleges
in a bind. Only a small number of talented athletes are available. If
colleges were alllowed to compete for players by offering them salaries
commensurate with their abilities, labor prices for athletes would quickly
rise.

The solution colleges have
agreed on is one diverse groups — from oil-producing nations to grain
producers — have tried at one time or another.

They have formed a cartel.
In this case, the heart of the cartel is an agreement between colleges
never to offer players anything more than a scholarship as compensation.
Since the stakes are so high, though, each school has an incentive to
cheat, as scandal after scandal of players getting paid with money and
other gifts has revealed. The primary job of the NCAA, then, is to enforce
the agreement.

In most industries, this
conduct would be highly illegal. Executives who conspired to artificially
lower the wages of their workers would likely find themselves in court.

To convince people to support
its cartel, the NCAA trots out arbitrary SAT requirements and appeals
to the academic mission of the university. Intercollegiate athletics
long ago passed from the real of normal extracurricular activity to
a huge money-making machine. All the NCAA does by imposing the SAT and
other academic requirements is give kids with few options even fewer
options by denying them a chance to show off their talents.

The sad thing is that the
NCAA cartel doesn’t necessarily save schools money as much as it shifts
that money around. Consider the Division I football champions, the University
of Florida. None of the players for Florida earned anything more (officially,
at least) than their scholarships. Yet Florida head coach Steve Spurrier
earns $1.1 million a year. All the NCAA does in Florida’s case is take
money that would otherwise go to players and instead give part of it
to the coaches, who are allowed to have different universities compete
for their services by offering higher salaries.

This bowl season, games paid
out an astounding $200 million, none of which can be given to any of
the players responsible for the wins without violating NCAA rules.

Some people are concerned
that paying athletes to play would hurt already low graduation rates
among athletes. In fact, according to the NCAA the graduation rate among
athletes is already higer than among the general student population.

The problem wth graduation
rates — fewer than half of the students who enter a four-year university
as freshmen ever receive their degrees — is a probem endemic to the
particular way American higher education is financed and administered.
Paying players is unlikely to affect it either way.

What paying players would
do is free them from a system in which they do most of the work and
assume all of the risk, yet are prevented from sharing in the results
of their labor. The best way to accomplish this goal is to get rid of
the NCAA.

Postscript: in the summer of 1997, University of Florida football
coach Steve Spurrier signed a contract paying him a reported $2 million
a year. His players are still legally forbidden to accept any compensation
aside from their scholarships.

This article originally appeared in the Detroit News.

Vote Libertarian

       Change.

       When the Democratic primary
process began, the Democrats realized they needed to repackage their recycled
big government, tax and spend policies that have changed little from the
reign of Franklin Roosevelt.

       And now all voters hear about
is change. Clinton’s going to change the country by abandoning trickle
down economics in favor of tickle down economics (guaranteed to make you
laugh when you hear the specific proposals).

       Perot’s big change will be
spying on the Republicans instead of having the Republican spy on him.

       And of course George Bush
is going to make the biggest change of all. Practically running against
himself, Bush claims the best thing about his second term is that it would
be nothing like his first term.

       While the three “major”
candidates debate among each other over who deserves the privilege of
running the country’s economy into the ground, the media and voters completely
ignore the only credible candidate who could bring about real change–Andre
Marrou, the candidate of the Libertarian Party.

       If anyone still wants to claim
there’s a media conspiracy to perpetuate the two-party system, Marrou’s
candidacy might be offered as the smoking gun.

       Marrou is on all fifty state
ballots, and unlike Perot he didn’t have millions of dollars to bankroll
a “volunteer” organization.

       The Libertarian Party is the
third largest political party in the United States, and while it has never
been competitive on a national level, occasionally it scores victories
on a local level. Alaskan voters elected Marrou to their state’s legislaturebefore
he ran for President.

       Now if Nicaragua had a presidential
election where a candidate from the third largest party was shut out of
the system despite being on the ballot everywhere, it would be decried
as undemocratic. In the United States, it’s simply business as usual.

       For example, though the Libertarian
Party is larger than Perot’s United We Stand organization, no one thought
to ask Marrou to any of the debates, and few commentators pondered what
his absence meant. In other years, the argument that Marrou could not
be elected might have sufficed, but since Perot shows little chance of
winning even a single state his presence seems mystifying.

       The reason you probably haven’t
heard about Marrou is that his ideas are so far out of what the media
considers “mainstream” that it has difficulty even reporting
on him.

       In a nutshell, libertarians
believe in minimal government. Marrou wants the U.S. government to maintain
a basic level of defense to ward off threats, but otherwise he’d gut most
government programs. He’d abolish the income tax, legalize drugs, and
get rid of government agencies such as the Internal Revenue Service and
the Environmental Protection Agency.

       Many commentators find these
ideas “kooky,” and William Safire, writing for the New York
Times, argued that if people wanted to register a protest vote they should
vote for Marrou and not Perot because the Libertarians aren’t really serious
about their strange ideas.

       It is the major parties, however,
whose ideas are kooky. The beauty of libertarianism is that it points
to the logical inconsistencies of both contemporary liberalism and conservatism.

       Contemporary liberals argue
for almost no restrictions on private behavior (they favor homosexual
rights and abortion for example), but they want to impose a whole series
of rigid restrictions on businesses and the economy. Liberals don’t mind
if you have an abortion as long as they can tax you for it.

       Conservatives take the opposite
tact. They argue for as little government intervention in the economy
as possible, but consistently support massive intervention into the private
lives of citizens (usually by opposing things like abortion, homosexual
rights, and pornography). Conservatives will pass laws about whom you
can sleep with, but you won’t have to pay any tax on the condom.

       Libertarians are the only
consistent group of the lot. They believe that government should stay
out of the economy and the private lives of individuals. As one of their
slogans argues, libertarians believe in “free minds AND free markets.”

       These views derive from the
Libertarian belief that human freedom and liberty are the greatest assets
a people can have. Currently the U.S. government unnecessarily restricts
both economic and intellectual freedom.

       If you really want change,
go into the voting booth tomorrow and vote Libertarian.

The FEC’s War on Free Speech and the Coming Battle for the Web

“Congress shall make no law … prohibiting the free exercise thereof;
or abridging the freedom of speech, or of the press; or the right of the
people peaceably to assemble, and to petition the Government for a redress
of grievances.”
������-First Amendment, Constitution of
the United States

�������Both the current scheme and
alternatives proposed by candidates this election cycle to “reform”
campaign finance violate the rights spelled out in the First Amendment.
The Federal Elections Commission should be abolished and political freedom
restored to U.S. elections.

�������Unfortunately, the FEC appears
to be headed toward regulating the web with its brand of censorship.

Campaign Finance Myths

�������Much of the hype surrounding
campaign finance reform rests on ignorance of how much is spent on political
campaigns and how campaign finance regulations effect such spending.

�������The first myth is that obscenely
large sums are spent on elections. In fact total political campaign spending
during elections works out to a mere $10 per voter every two years. If
anything, that’s a steeply discounted sum considering the economic, political
and military might of the United States; a vote for a U.S. politician
has much more worldwide impact than a vote in, say, Italy’s elections.

�������The second myth is that campaign
finance reform keeps big money donors such as corporations, unions and
other special interest groups from influencing elections, while “empowering”
the average voter.

�������In fact, donation limits do
just the opposite. Because of the massive amount of paper work required
by the FEC, lots of small donations can nickel and dime a campaign to
death. It becomes much more cost effective to seek large donations from
big donors than bother with the little people who might only be able to
give $20 or $50 at a pop.

�������In addition, because the Supreme
Court has ruled restrictions on spending independent of campaign organizations
violates Constitutional guarantees of free speech, large donors can and
do bankroll independent organizations to get their views across. Groups
such as labor unions and the Christian Coalition have done this most visibly
this year, garnering the wrath of those opposed to their respective political
goals.

Real Effect of Campaign Finance Laws

�������The main effect, then, of the
FEC has not been to freeze out large corporations or special interests
groups such as unions, but instead to lower competition from challengers
and third parties and punish genuinely grassroots organizations.

�������Passed in 1971 and revised
several times since, the Federal Election Campaign Act has clearly been
used to prevent third party challenges to the Republican/Democrat hegemony.
When the FEC was established in 1974, Representative David R. Obey (D-Wis.),
put it bluntly when he testified, “We should not be in the business
of encouraging minority parties. The two-party system has been the basic
strength of American democracy.”

�������Historically, new and innovative
political ideas have benefited from wealthy benefactors willing to underwrite
various causes. One can easily imagine a wealthy individual concerned
about the environment donating millions of dollars to give a party advocating
pro-environmental ideas a competitive shot in elections. Current FEC guidelines
outlaw such donations, ensuring the Democrats and Republicans have no
real challengers.

�������FEC regulations and investigations
also hurt grassroots campaigns tremendously, chilling free speech. It
is currently legal for groups to independently distribute information
about their views, but it is illegal for them to do so in coordinate with
a political campaign.

�������Unfortunately, the line distinguishing
between what is and is not a campaign effort is a hard one to draw. The
current complaints against the Christian Coalition and various unions
is that they illegally coordinated their publications with the Republican
and Democrat parties respectively.

�������Large organizations such as
these can generally afford the risk of retaining lawyers for yet another
FEC inquisition, but small groups cannot. So rather than risk the wrath
of the FEC, many of these instead simply curtail what they say and how
they say it around election time. The cost for those who don’t can be
prohibitive.

FEC’s Inquistions

�������The October issue of Reason
magazine highlighted the vindictive investigation by the FEC into two
ACT-UP chapter which spent more than $5,000 organizing a 1990 boycott
of Phillip Morris for its support of Sen. Jesse Helms (R-North Carolina).
Helmes claimed the boycott was an illegal contribution to his opponent’s
campaign.

�������According to Reason, the FEC
spent more than two years investigating the ACT-UP chapters, finally pulling
the plug in 1994 after the groups had already went out of business.

�������The Cato Institute documented
similar instances of investigations and fines of grassroots organizations
involved in politically unpopular causes in the early and mid-1980s.

Today the Nation, Tomorrow the Web

�������Now thee first rumbles are
being heard of extending the FEC’s war on free speech to the web. Both
the San Jose Mercury News and Mother Jones recently published articles
raising the specter of FEC regulation of the net.

�������The current debate centers
around California’s Proposition 211, a ballot initiative which would make
it easier for investors to sue companies for securities fraud. The Mercury
news wonders whether or not it is legal for popular web sites such as
Netscape and Yahoo! to refuse to run ads in favor of Proposition 211,
which both companies oppose.

�������Yahoo! finally agreed to run
a pro-211 ad, while Netscape claims it was never asked to run such an
ad.

�������Kevin Lee Thomason, who created
the pro-211 Internet site, seems to believe that popular web sites might
eventually face the same regulations that television stations do. Thomason
told the Mercury News, “When certain companies have a large market
share, they create an obligation to exhibit fairness when it comes to
political issues.”

�������Mother Jones writer Eric Umansky
outlines the more important, and potentially more volatile, issue of whether
or not the small icons on Microsoft, Netscape and other sites which link
to anti-211 sites aren’t actually contributions which must be reported
as such.

�������There is some precedent for
thinking they might be. Earlier this year Compuserve offered to give free
web space to political candidates, but was forced to withdraw the offer
after the FEC ruled it constituted an in-kind donation which is illegal.

�������This incident clearly illustrates
just how much FEC actions can diminish rather than enhance the level and
quality of political discourse. Although much of the concern about censorship
on the net has been reserved for the most blatant attempt at censorship,
such as the Communications Decency Act, little activity has focused on
how agencies such as the FEC might impact free speech on the net. Unlike
the CDA, the Supreme Court has upheld the FEC’s right to tinker with free
speech, and if it decides to start going after political speech on the
net it is much more likely to be successful than laws like the CDA.

�������Any political site which mentions
candidates, positively or negatively, could face a series of increasingly
stringent regulations, restrictions and filing requirements to meet the
FEC’s Byzantine rules.

Time to Get Rid of the FEC

�������After a series of investigations
of both parties in the early and mid-1980s, the Republican platform in
1984 included a plank to get rid of the FEC. Now it is imperative that
the FEC either be abolished or restrained before it starts limiting political
discourse on the web. The problem with the FEC is it fundamentally limits
the range and extent of political discussion, favoring entrenched political
interests at the expense of outsiders and challengers.