What Policy Makers and Opinion Formers Should Know
There are moral, political, and economic propositions that are fundamental, yet remain misunderstood or unknown.
November 30, 2009
Fred Foldvary, Ph.D.
Economist

Begin a talk by telling your public what the story is about. There are moral, political, and economic propositions that are fundamental, yet remain misunderstood or unknown. Those interested in the logic and evidence can search for fuller explanations; here the aim is to lay them out very briefly, because you are busy personae.

There is an objective morality, a universal ethic by which acts that coercively harm others are evil, acts that are welcomed benefits are morally good, and all other acts are neutral. Each person is properly an equal self-owner, and equality requires an equal benefit from the natural bounty, which in the economy becomes measured as land rent.

Acts which are unwelcome are divided into offenses and harms. If an act is disagreeable merely from the beliefs and values of the person affected, the act, while personally bad to the recipient, is morally neutral by the universal ethic, otherwise there is no freedom. Thus only evil acts, those which coercively harm others, should be prohibited and penalized by government.

It is evil to impose religion by force, beyond what is mandated by the universal ethic, and if you think your religion requires this, then you make yourself a god, but you misunderstand, because man is not god.

Pollution is trespass and invasion into the property of others, and requires restitution for the damage. The most effective policy for pollution and congestion is a direct charge on these, compensating for the effect, rather than restrictions that do not let people respond according to their costs and benefits.

Taxes on income, goods, production, consumption, trade, and value added all impose the waste of not letting resources go to where they are most wanted, and reducing the growth that lifts folks out of poverty. The most efficient and equitable sources of public revenue are land rent, pollution charges, and voluntary user fees. There is no need to make workers poorer by taxing their wages and spending.

We can help resolve territorial ethnic conflicts as in Israel and Palestine and in Kashmir with joint sovereignty in disputed areas and by making those who occupy disputed land pay rent to compensate excluding others.

Politics becomes dirty because a mass of voters elects strangers, and the candidates require money to make themselves known, although they can never be really known to the masses. This can be remedied by voting only in small groups, starting with a neighborhood of about a thousand persons. Neighborhood councils then elect higher level councils in a bottom-up multi-level voting system all the way to the top.

Unemployment is caused by restrictions and imposed costs that prevent workers from accessing resources to produce and trade. The natural economy of humanity is universal prosperity, because natural resources are still abundant, and technology multiplies our power to create. But our economies are instead kleptocracies, the rule by thieves. Stop taking the bread produced by the worker, and he will engage his time to make bread until the value of an extra loaf equals the value of extra leisure.

The natural rate of interest adjusts savings to investment, and the natural price level adjusts income to spending. Governmental control of money does not let these do their jobs, and creates distortions resulting in inflation and depressions. Free-market money and banking provides a stable yet flexible money supply and a rate of interest based on preferences rather than manipulations. The best economic stimulus is economic freedom.

Many children are unschooled, and too many are schooled but not educated. Let parents and students choose the best educations with vouchers good for private and governmental schools. So long as there are poor folks, there is no need for government to take over basic services, since vouchers can enable the poor to use them.

Children have a right to be fed, educated, and cared about, but adults should not be treated like children. There is no adult moral right to food, medical services, housing, and retirement pensions. There is only the right to apply your labor, keep what you earn, and obtain an equal share of nature. Government denies the natural rights, and then compensates for the resulting poverty by making folks dependent on legal entitlements that eventually bankrupt the economy.

I lay it all out because I get irritated by poorly formed policies and opinions, and I want to be able to point here and say, this is what I think you should know. But I expect no miracles.

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Fred Foldvary, Ph.D.
Economist

FRED E. FOLDVARY, Ph.D., is an economist and has been writing weekly editorials for Progress.org since 1997. Foldvary's commentaries are well respected for their currency, sound logic, wit, and consistent devotion to human freedom. He received his B.A. in economics from the University of California at Berkeley, and his M.A. and Ph.D. in economics from George Mason University. He has taught economics at Virginia Tech, John F. Kennedy University, Santa Clara University, and currently teaches at San Jose State University.

Foldvary is the author of The Soul of LibertyPublic Goods and Private Communities, and Dictionary of Free Market Economics. He edited and contributed to Beyond Neoclassical Economics and, with Dan Klein, The Half-Life of Policy Rationales. Foldvary's areas of research include public finance, governance, ethical philosophy, and land economics.

Foldvary is notably known for going on record in the American Journal of Economics and Sociology in 1997 to predict the exact timing of the 2008 economic depression—eleven years before the event occurred. He was able to do so due to his extensive knowledge of the real-estate cycle.