Tuesday, June 14, 2011

We will Win the Battle

  Lawrence Reed, President of the Foundation for Economic Education, makes a remarkable speech at Americans for Prosperity's 2011 Defending the American Dream Summit in Jasper, GA. The video does not need any other comment except that it is worth your time. Enjoy!

Remeber: The battle is not over. We, Classical Liberals, Free-Markets, and Humanity, will WIN.

Wednesday, April 20, 2011

There is no Doubt: There is Terrorism all over Latin America

 Sadly, for Latin America rumors have become truths. Terrorism exists in Latin America. Reports from different sources validate, the fact, that various suspicions are no longer speculations but reality. Terrorism is in countries like Nicaragua, Honduras, Brazil, Argentina, Paraguay, Bolivia, Ecuador and Venezuela.  

 Jaime Daremblum, of the Hudson Institute, Washington, D.C., and Costa Rica’s former ambassador to the United States, confirms that terrorist cells are working in Brazil, Argentina, and Paraguay. Daremblum says that terrorism has been present in Argentina since the attacks perpetrated by Hezbollah in the 1990’s. The former diplomat also explains that Iran’s influence in Latin America is so powerful that Iranians are not required a Visa to enter Venezuela. In his article that appears in the Hudson Institute website titled “Al Qaeda in Brazil?” Daremblum says:

“Terrorists have long found haven in South America's so-called Triple Frontier, which encompasses the intersection of Brazil, Argentina, and Paraguay. This area is known for being a Wild West of lawlessness, drug trafficking, and organized crime. Argentina is especially sensitive to increased terrorist activity in the region. During the 1990s, it suffered two deadly bombings orchestrated by Hezbollah and Iran. The first (in 1992) destroyed the Israeli embassy in Buenos Aires; the second (in 1994) demolished a Jewish community center in the same city.

 Furthermore, the Ecuadorian newspaper El Comercio reports the existence of terrorist cells in Quito and other cities in the country. Ecuadorian police captured a few people from the Middle East due to their participation in drug trafficking. Six of the detainees were extradited to the United States because their red profiles under the FBI database. The article titled “Celulas del Terrorismo Circulan por el Ecuador,” says:

“El nombre de Ahmed A., uno de los aprehendidos por los agentes, coincide con otro que aparece en los archivos del FBI por vínculos con Osama bin Laden, líder de la organización Al Qaeda.
(The name A. Ahmed, one of those arrested by the agents, similar and matches to another, which is on file with the FBI for ties to Osama bin Laden, leader of Al Qaeda.)    

 Wilson Toainga, a former public prosecutor, who investigated the case of a terrorist cell in Ecuador in 2005, has explicitly acknowledged the presence of cells in Ecuador. Toainga expresses concern not only about terrorism but also organized crime.

 Additionally, Honduras has reinforced security around various foreign embassies. According to a report, Oscar Alvarez, Honduras’ Security Minister, expresses his concern about possible terrorist attacks. Alvarez says that these acts of terrorism would be plotted by Al Qaeda and carried out by Hondurans. Here an excerpt from the article that appears on CBS’ website:

We are facing a state of preventative national alert, because our intelligence services report that al Qaeda foreigners have made offers for Hondurans to carry out sabotage both here and abroad”

 These three reports from various sources show that terrorism is present in Latin America. There is no doubt about it now. Moreover, it is not terrorism a danger to Latin America but also drug trafficking and organized crime. The question should be: When are these cells going to be operational?  And, whether any action can be taken in order to prevent attacks from extremists and fanatics or just wait and deal with the pain of terrorist acts.

More Info: Updates 7/21/11
Is Ecuador Becoming the 'UN of Crime'?

Wednesday, April 6, 2011

Get the Hell Out!

The Ecuadorian government has declared “Persona non grata” to the United States Ambassador, Heather Dodges. Ricardo Patiño, Ecuador’s Foreign Minister, asked Hodges to leave Ecuador as soon as possible due to a WIKILEAKS cable where the Ambassador alleged police corruption, which was known by Ecuador’s government (FOXNEWS)

Patiño requested Hodges to leave after she did not provide the explanation Patiño looked for. Ecuador’s Foreign Minister was unsatisfied with Hodges’ explanation. Hodges said that the information was stolen from the United States Government. Therefore, she had nothing to explain to Ecuadorian authorities. The cable leak first appeared in the Spanish newspaper El País.

Whether Heather Hodges sent a cable or not. Ecuador’s government has no support to base diplomatic decisions of expelling a foreign diplomat on those grounds. Ecuador’s government is not only battling domestic disagreement with Rafael Correa’s administration but also foreign. What is next?

Monday, April 4, 2011

Is Hugo Chavez a Terrorist?

Hugo Chavez, Venezuela’s President, has established an anti-American agenda since he became president. It is not a surprise to some people to read articles like the ones posted on America’s Forum web site. However, the implications for Latin America exposed in the articles linked bellow are real and dangerous.

According to the articles, Hugo Chavez hosted a terrorist summit in Venezuela’s Military Intelligence Fort Tiuna in Caracas back in August 2010. The meeting had representatives from Hamas, Hezbollah, and Palestinian Islamic Jihad. Chavez has become the perfect seed that terrorism needs to spread its radical ideas.

Chavez’ influence in countries like Bolivia, Nicaragua, Ecuador, etc., is an asset to terrorists’ cells. In Ecuador, terrorists have a different incentive to promote their fight against the western hemisphere. Ecuador uses the United States Dollar as currency. Money laundering in dollars is an advantageous tool for terrorism to finance its operations. The Financial Action Task Force’s (FATF) 2010 report shows that in Ecuador money laundering takes place at an alarming rate. 

As America’s Forum article, “Chavez Hosts Terrorist Summit in Venezuela” reads the following:

"We assume that they are virtually present in all Latin American countries, and these people have the determination to attack America… We believe this is the kind of things that would be discussed at the summit, their ability to take their fight to the Western Hemisphere.''

Two questions come to mind:

1)How far will Chavez go to execute his anti-American agenda?

2)Which countries in Latin America are following Venezuela’s lead and opening up their borders to terrorists?


Wednesday, November 10, 2010

The Failure of the “Market Failure” Argument

Dr. John Hasnas, Law professor at Georgetown University, gave a lecture to the Students for Liberty (Webminar Series) on November 8, 2010. Hasnas lecture was not on the Market Failure (MF) but rather the FAILURE of the Market Failure argument. Hasnas exposed his arguments against the MF from his knowledge in law and ethics. Hasnas could not being more eloquent in establishing the distinction of what constitutes for him the disappointment in the argumentation of the defenders of the subject in question.

I will now share my notes from Hasnas’ lecture:

The Market Failure (Definition according to Hasnas):
The market is full with transactions that happen simultaneously. There are unregulated voluntary as well as regulated voluntary transactions. However, the market failure occurs when the good outcome(s) of these transactions affect negatively third parties. Advocates of the MF often mention the following examples when the “market fails;” air pollution, deforestation, water contamination to name a few. Economists call these consequences of market forces “negative externalities”; while lawyers call them “negative social transactions.” Therefore, MF happens when:

Negative Social Transactions or Negative Externalities > Benefits produced by market transactions.
The Law:

According to Hasnas, the US’ Law System has two forms: the Statutory Law and Common Law.

Statutory Law: Governments create the general rules and the citizens must follow the statutory law. Hence, legislators write statutory laws; it reflects the political interest. It does not represent individual interest.

Common Law: It settles disputes. Property Law, Tort Law, Contract Law are parts of the Common Law. Common Law implies that there is a victim.

The Real World Conception (Market + Law):

Hasnas expresses that in the real world market and law meet in one place. This place should be the Common Law rather than Statutory Law. Hasnas proceeds to explain in detail his interpretations of market and law as follows:
Market: Voluntary transactions regulated by customs, ethics plus common law.
Law: Legislation is the regulation of voluntary transactions by the state to serve the politically dominant interest plus the common law.

John Hasnas describes the need for a self-correction of the market through the Common Law Regulatory Process (CLRP). Professor Hasnas describes the CLRP in this way:

“Exercise the degree of care that a reasonable person would use to avoid causing harm to others by his/hers actions.” (Hasnas’ Lecture PP Slide)

According to Hasnas, if you deny the claim listed above you deny Common Law. Its denial constitutes an abuse on others. People can an always will be able to regulate themselves without the intervention of the government.

----------------------------------------End of Notes----------------------------------------
I believe that Hasnas insights on the MF and its invalidity give us a different approach to the subject. The law approach is a fascinating tool to analyze policies. The understanding of the significance of Common Law and its use constitutes a strong tool to demonstrate the Failure of the MF argument. During, Hasnas lecture I could not help myself but to think in the words of Israel Kirzner.

Kirzner says the following:
“Efficiency for a social system means the efficiency with which it permits its individual members to achieve their individual goals.” (Kirzner 1963)

Kirzner expresses that inefficiencies may occur when the means of achieving a goal it is inconsistent with the goal itself. So the question, is the Market Failure a valid argument? I agree with Kirzner and Hasnas the Market Failure argument FAILS to demonstrate itself.

Friday, October 1, 2010

Was it a Coup d'etat?

On September 30th, 2010, Quito the capital of Ecuador was in shock by the police riots that took place at the Regimiento Quito 1 (Police Headquarters in the North side of the city). The police was (and still might be) unhappy with a new law for the public sector. This law, the police thought, would cut their bonuses and promotions. However, in reality the benefits still there but paid differently. The controversy and conflict took place when President Correa tried, mistakenly and wildly, to confront the crowd.

Police men gathered at the Regimiento Quito 1 Thursday morning, they burned tires and declared themselves on strike. President Rafael Correa went to the Police Headquarters hoping he could calm the police force and get them back to work. However, things were about to take a wrong turn. As Correa, from a window, tried to convince the police that this law will not take away their labor benefits; police men chanted in favor of Lucio Guitirrez, Ecuador's former President and Correa's opponent. Correa could not take the pressure from the police and he lost it. He removed his necktie and unbuttoned his shirt Superman style. Correa told the crowd "if you want me, here I am," implying he did not fear for his life. The situation went from unsafe to unsafer.

Correa's security crew tried to get the President away from harms way. But any effort was in vain, a tear-gas bomb exploded right next to Correa's face. Correa walked, wearing a gas-mask and using a cane, to the Police Hospital located right next to the Headquarters. He was treated for a swollen knee that went under surgery last week and breathing problems due to the tear-gas used by police. While Correa was in the hospital he never stopped giving orders to his ministers, government, and military. On the streets the mood was different. Businesses, shopping centers, banks, schools got closed to prevent looting due to the lack of police force on the streets.

Around 2 PM the nation went under state of siege or emergency. According to article 165 of Ecuador's Constitution;

"165. The President can suspend or limit citizens rights of inviolability of residence, inviolability of correspondence, property, freedom of information, freedom social gathering, freedom of transit, in terms in which the Constitution points out."

Following the declaration of state of emergency, all TV and Radio channels had to broadcast the signal produced by Ecuador TV (ECTV) a state-run entity. Ecuador's citizens and the international community were at the expense of the information given by Correa's government. All information given by ECTV, not surprisingly, came onto the broadcast one-sided. It was Correa and his government in charged of orchestrating the information. Information that made it look like a coup d'etat was on its way.

Correa went public from the Police Hospital using Ecuador TV a couple hours after he checked in. He told reporters that he was a victim of a "cowardly attack." He sent a message to everybody by saying "this is a coup attempt" and "they (police men) are trying to get to my room and attack me...But, forget it. I won't relent. If something happens to me, remember my infinite love for my country, and to my family I say that I will love them anywhere I end up." (CNN)

So, was it a coup d'etat?

Doris Solis, who is a president's policy coordination minister, said "this is not a coup." Solis mentioned that the military supported Correa and he was their commander in chief. (FOXNEWS).

A coup d'etat implies that there is a declaration to oust the president and to replace him/her with someone else. However, it never happened in Ecuador. In history most coups, the people who want to overthrow a government are supported by the military, or it is the army the rebel group. Yesterday, the military expressed his support to Correa and his government. (It is important to mention that Correa has always been in good terms with the military. Unlike the police, Correa has increased the salaries of high ranked army officials.) What took place in Ecuador, it was a illegitimate strike by police forces that thought that their bonuses and promotions were taken away by the new law. Also what happened on September 30th was an act of reckless committed by Correa when he decided to confront the police.

Correa never stopped governing Ecuador. Even though, he was "practically captive," as he mentioned to reporters. He kept on commanding the military, leading his ministers and secretaries, and no one stopped him, not even the police.

Yesterday was a horrendous day in Ecuador's history. It was the straw that broke the camel's back. It was the consequence of how Correa governs Ecuador. Correa has been in power since 2007 and he has never stopped being arrogant and despot. He has applied an abuse of power at all levels without taking into account the comments and suggestions from opposition.

After Correa was rescued from the Police Hospital; he went to Palacio de Carodelet, President's home. There, he was received by his supporters in the Plaza de la Independencia. While Correa spoke to his supporters back in the hospital a bloodshed took place. The armed fight between army and police lasted about a hour. The bloodshed's outcome was 6 dead and 193 wounded. It was a fight among Ecuadorean citizens, and Correa was celebrating with his supporters. This is by far Correa's regime worst event, yet.

Finally, here is Juan Fernando Carpio, Economics Professor at Universidad San Francisco de Quito, gives a great yet sarcastic example of the conflict between the police and Correa's government;

"My plan for today: I want to raise my popularity in the building so I'm going to ask them to lower the salaries of guards. If they complaint, I am going to stand by their post guards and provoke them. Then when they retain me until my mom to comes get me, I will ask for solidarity from other neighborhoods. When i leave them ... I will get the guards from the next door building to fight the guards in my building. Then I will throw a party with friends to recognize my courage."

Wednesday, June 3, 2009

Subjective Value through Non-Austrians

James Buchanan in his book The Reason of Rules(10.2.9) states:
The individual is the unique unit of consciousness from which all evaluation begins. Note that this conception does not in any way reject the influence of community or society on the individual. The value structure of an isolated human being may be totally divergent from that of such a person described by membership in one or many social relationships. The presupposition requires only that societal or communitarian influences enter through modifications in the values that are potentially expressed by the individual and not externally.
Armen Alchian and William Allen in Exchange and Production: Competition, Coordination, and Control:
Groups, organizations, communities, nations, and societies are best understood by focusing on the incentives and actions of their members. A business, union, or family may be formed to further some common interest of its members, but group actions are still the results of decisions of individuals. Therefore, do not ask, "Why does the U.S. government, or General Motors, or some union behave as it does?" Ask instead, "Why does the decision-maker decide as he does?"
It is followed with some postulates that I list below:
  1. For each person, some goods are scarce
  2. Each person desires many goods and goals
  3. Each person is willing to forsake some of an economic good to get more of other economic goods
  4. The more one has of any good, the lower its personal marginal valuation
  5. Not all people have identical tastes and preferences
  6. People are innovative and rational
Value must be subjective otherwise a planned economy would be the easiest solution, but as Postulate 5 shows, tastes and preferences differ b/w individuals even b/w identical twins.

Monday, June 1, 2009

Value: Subjective or Objective

Is value objective or subjective?

I am not sure this is much debated today as most economists agree that value is subjective.

Objective value dictates that value is taken from the object. This would mean even if there were no one to purchase the apple; the apple still holds a certain value.

Subjective value, on the other hand, is taken from man's use of the object. Using the apple as a reference, the apple holds a value only because it is scarce and someone can use it. It is therefore from the individual that the value is taken and not from the apple itself. The cost of producing the apple does not influence it's value except to the person who went through the action of producing the apple.

There is then multiple amount of subjective values placed on an object as their could be numerous individuals who have use for it. Their value will allow them to bid on the item allowing those who value the object higher to be willing to give up more for it. If the producer values the object more than what others are willing to give, then he would not sell it.

Thursday, March 19, 2009

The Empiricist Claim

Last night, I was fortunate to lead the discussion.
I had tried to tackle the question, why we are the Austrian Knights and not the Smithian Souls.

The debate Austrians find themselves with mainstream economists is not over economics persay but a philosophical debate.

I am curious if when reading blog posts such as this one that claim Austrians don't like empirical data, do you get the same sense as I do? That this is not a debate over economics but of a philosophical nature that has long been in discussions.
Found an easy to follow Philosophy Forum on Kant vs Hume.

How can we best argue in this debate?

Wednesday, March 4, 2009

Austrian Knights to Smithian Souls

Tonight, Dan Klein had lead the discussion at the weekly Austrian Knights event.

The main point, at least as I took it, is the need for students to study Adam Smith.
Adam Smith had begun with the Theory of Moral Sentiments. It is important to note that it is the questions of morality that Adam Smith begin with, but to say that if other economists do not begin with such questions, they are not doing economics is rather short.

Economics is not the study of morals. We can not measure morals. It is only individual's making choices according to their preferences that help reveal the morality of the individual. This is not something that should be taken lightly. Morality and the study of ethics is a great assistance in learning about liberty, but they are not able to discuss economics. Economics defined famously by Lionel Robbins is "the science which studies human behaviour as a relationship between ends and scarce means which have alternative uses." This is not the study of morals on society. Only value that an economist can use in their studies is that of price which unveils a load of information for that period of time.

In the study of liberty, morality is essential as it answers many questions allowing each of us to comprehend why we strive so hard towards it. Communism attacks religion for the very reason that morality denies that government intervention is a worthwhile policy.

Let us take from this event that we can not use morality to argue on economics, but we can and should study morality to discuss liberty. Read your SMITH!