My colleagues Yaron Brook and Steve Simpson have a timely op-ed at The Daily Caller taking on Utah Sen. Mike Lee, who recently made headlines by saying: “The conservative vision for America is not an Ayn Rand novel. It’s a Norman Rockwell painting, or a Frank Capra movie: a nation ‘of plain, ordinary kindness, and a little looking out for the other fellow, too.’”
How, the op-ed asks, does Lee’s stated vision for the Republican Party differ from President Obama’s program-in-progress for the Democratic Party? As it turns out, not much.
So what is Sen. Lee’s vision? A ringing endorsement of the American spirit of independence and productivity? Hardly.
“The United States did not formally launch our war on poverty in 1964, but in 1776,” the senator said at a recent Heritage Foundation poverty forum. Since then it “has waged the most successful war on poverty in the history of the world” by becoming the wealthiest nation on earth.
Really? American colonists fought the most powerful nation on earth as a precursor to a mid-20th century welfare program? Would it be too much to expect a simple “you did build that” from a senator put in office by the Tea Party? Apparently so.
Sen. Lee no doubt views himself as a champion of America’s founding principles. But how do his views really differ from President Obama’s? They both think America’s defining purpose is its ability to solve big social problems. They both think America’s wealth comes from some group — “community and cooperation” in the senator’s view and “one nation and one people” in the president’s. Their only dispute seems to be about how we should distribute it.
Where, then, do both Lee and Obama go wrong?
So Sen. Lee has it backwards. The true foundation of America is individualism, not “community and cooperation.” And President Obama is equally wrong to claim that only groups are responsible for success because cooperation is often necessary to get things done. Individuals built this nation and created the wealth and prosperity that pulled us out of poverty. Sometimes they worked together, sometimes they worked alone. But individuals built it, and they will keep building it, only if we recognize that individuals — their initiative, their thought, and their work — are the fountainhead of all progress.
Read the whole thing here.
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Apple Inc. has been saddled with a court-appointed antitrust monitor, as a penalty for violating the Sherman Act by creating an effective profit-making strategy for marketing e-books. Get a load of what this professional stool pigeon was up to in his first month, as reported by Roger Parloff of Fortune magazine:
Apple accused the monitor, Michael Bromwich, a partner at the law firm of Goodwin Procter, of charging excessive fees, behaving in an “unfettered and inappropriate manner,” relying on “secret communications with the court,” evincing “incredibly disruptive” mission creep, and acting in ways that threatened to turn him into an “quasi-inquisitional” offshoot of the federal judge who appointed him in violation of the constitutional principle of separation of powers.
Did I mention that Apple is responsible for paying Bromwich’s $1,100 per hour fee—and $1,025 hourly for the lawyer whose job is to make up for Bromwich’s lack of antitrust experience?
The more eye-catching of Apple’s claims were its accusations that Bromwich was already insisting on meeting every member of Apple’s executive team and board, including former U.S. Vice President Al Gore, Jr., and the company’s legendary product designer, Sir Jonathan Ive—neither of whom had anything to do with antitrust compliance issues, according to Apple.
On November 21, Judge Denise Cote proposed that she and Bromwich be allowed to hold private meetings, without Apple’s counsel present—meetings at which Apple feared Bromwich would share everything he observed at Apple, including information from confidential and privileged documents. Apple strenuously opposed the proposal, and Judge Cote backed down.
Fed up, Apple is actually challenging the constitutionality of court-appointed outside monitors, as violating the Due Process Clause and the separation of powers. Notes Alison Frankel of Reuters:
Apple’s argument is two-pronged: Its due process rights are violated because Bromwich has a financial interest in prolonging his investigation of the company; and Judge Cote’s definition of Bromwich’s mandate, which includes ex parte interviews with Apple witnesses and private reports to the judge, violates the separation of powers doctrine because it makes the monitor a special prosecutor, not a special master conducting court activities.
Compliance monitors are commonplace remedies whenever the Department of Justice sinks its teeth into a corporate defendant. Apple is now getting a taste of what Microsoft endured for a decade, in the wake of the Department of Justice’s successful Sherman Act lawsuit against that company (filed in 1998 and finally settled in 2002). Microsoft was saddled with a three-member technical committee to monitor compliance, as well as a compliance officer charged with reporting any evidence of violations.
Can you imagine running your business with an antitrust vulture perched on the whiteboard in every conference room? If not, don’t be surprised if Apple’s cutting-edge innovation slows down to resemble Microsoft’s last decade.
You’ve no doubt heard Obamacare referred to as a train wreck. It’s a good metaphor for a number of reasons, not the least of which is the fact that train wrecks don’t just destroy the train, they cut a swath of destruction through the countryside. Obamacare is wreaking havoc in many more areas than just the health insurance market.
One casualty of this train wreck is the rule of law itself. What counts as proper, objective law is a complex topic. But distilled to its essence, it means that the law must have both a proper end or purpose and proper means for achieving that purpose. The proper purpose of law, as both Ayn Rand and the Founders understood, is the protection of individual rights. As the Declaration of Independence puts it, governments are instituted among men to protect the rights to life, liberty, and the pursuit of happiness. Proper means in the law covers both how law is written or expressed and the various legal processes that government must follow in passing and enforcing it. So, for example, laws must be clear and understandable so that people will know what is prohibited, they cannot change at the whim of government officials, and they must comply with the Constitution, which is the source of the government’s authority to pass laws.
Obamacare fails on every count. Its purpose—forcing people to pay for the health insurance of others—violates rather than protects individual rights. And the law is being implemented and enforced as though the president has the authority to make up its terms as he goes along. First, he suspended the employer mandate when it became clear that many businesses would not be able to comply with it. Most recently, he suspended the provision that requires non-complying insurance policies to be canceled because so many people were complaining about the president’s “promise” that they could keep their policies. Obamacare is not being implemented as a law, but as a set of edicts from on high.
That shouldn’t surprise us because it’s not possible to implement a law like Obamacare in a principled way. The law is not based on any discernible legal principles at all, save “do it our way, or else.” The purpose of the law is to substitute the government’s choices about health insurance for your choices. So you don’t get to keep your policy or decide what coverage you need or whether you need any at all, and your insurer does not get to decide how to make pricing decisions or what to offer at what price or how to cover its costs. The government makes all those choices and many more for everyone. How can it assess all the factors and trade-offs that millions of individuals make in the marketplace and write objective laws to cover those? It can’t. All it can do is issue more edicts as new questions and problems arise.
Ayn Rand once said that if you can’t write an objective law on a given subject then that is a good indication that you shouldn’t write a law on that subject at all. With Obamacare (and many other laws) the government is busy trying to write thousands of non-objective laws that control everything we do. The question is, how much destruction will we allow this train wreck to cause before doing something about it?
Image credit: murengstockphoto/Shutterstock.com
“Metaphysics in Marble,” an article on sculpture by art historian Mary Ann Sures, was published by Ayn Rand in The Objectivist (February–March, 1969) and recommended by Rand in the revised edition of The Romantic Manifesto.
Quoting from the article: “This discussion is a brief historical survey . . . to indicate the means by which sculpture expresses abstractions—and to demonstrate the connection between the dominant philosophy of a given era and its sculpture.” The article was originally published without illustrations.
Now, for the first time, the article is available online, supplemented by footnotes containing links to more than thirty online illustrations selected by the author to enhance appreciation of her text.
“The Ayn Rand Institute thanks Mary Ann Sures,” said ARI executive director Yaron Brook, “for making her article available to a new generation of readers, and for including links to images that create a multimedia experience for everyone.”
To access the article, click here.
Note: This article will be available on the current Ayn Rand Institute website for a limited time. The Institute’s digital strategy calls for the existing site to be replaced in early 2014 with a new site, on which the article will not be immediately available.
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On Thanksgiving Day, I’d like to share two selections from Ayn Rand’s writings. First, her description of the holiday’s significance (from an article called “Cashing In on Hunger” published in the Ayn Rand Letter):
Thanksgiving is a typically American holiday. In spite of its religious form (giving thanks to God for a good harvest), its essential, secular meaning is a celebration of successful production. It is a producers’ holiday. The lavish meal is a symbol of the fact that abundant consumption is the result and reward of production. Abundance is (or was and ought to be) America’s pride—just as it is the pride of American parents that their children need never know starvation.
Turning to Rand’s fiction, here are a few lines from Atlas Shrugged. It’s late in the evening on Thanksgiving, and industrialist Hank Rearden is about to share a drink with railroad executive Dagny Taggart. On a nearby wall hangs a portrait of the railroad’s nineteenth-century founder:
He stood looking at the portrait of Nat Taggart on the wall of her office—the portrait of a young man with a lifted head—until she returned, bringing a bottle of brandy and two glasses. He filled the glasses in silence.
“You know, Dagny, Thanksgiving was a holiday established by productive people to celebrate the success of their work.”
The movement of his arm, as he raised his glass, went from the portrait—to her—to himself—to the buildings of the city beyond the window.
Happy Thanksgiving to all the readers of Voices for Reason!
This is what many Walmart critics detest: the company will not offer higher wages and benefits when it calculates that it will not be good business. According to these critics, every Walmart employee should be paid at least $12-$15 per hour, regardless of the role he fills, regardless of whether he has the skills or experience to justify such a wage, regardless of whether he is a model employee or a slouch, regardless of how many other individuals are willing and able to do his job for less, regardless of whether raising wages will be good for the company’s bottom line. In effect, their premise is that $12+ per hour wages shouldn’t have to be earned or justified; they should be dispensed like handouts.
Read the whole thing here.
Adam Mossoff, professor of law at George Mason University, is featured in a three-page interview in the current issue of The Federalist Paper, the official magazine of the Federalist Society. The society is the nation’s foremost association of conservative and libertarian legal professionals, with a membership of some 30,000 lawyers, judges, and law professors, plus more than 10,000 law students.
In the interview, Mossoff recounts his personal journey, from graduate studies in philosophy to law school and a professorship, and offers practical advice to law students. In answer to a question about who has had “the greatest influence on your own philosophy and in political theory specially,” his answer includes the following comments:
Of the many influences on me in my life, the most profound has been Ayn Rand. I first read her books in high school, and they awakened in me my interest in philosophy, as well as a recognition that ideas matter because they are what drive the decisions that one makes in one’s own life and what ultimately drive social and political leaders in making the choices that can define the course of an entire country. This made me passionate about philosophy generally, leading me to other great philosophical influences, such as Aristotle and John Locke. . . . But even more important is Rand’s idea that philosophy is ideally a guide for living and for being happy. As I tell people, philosophy is just an intellectual tool kit for figuring out what are one’s values and how best to achieve them so that one lives a flourishing life.
Unfortunately, this interview is not yet available online. However, it is encouraging that tens of thousands of active minds in the legal profession have been delivered a print version of Mossoff’s interview and its highly favorable presentation of Ayn Rand’s value in the modern world.
Mossoff’s 2010 OCON lecture, “Why Should Business Leaders Care about Intellectual Property?—Ayn Rand’s Radical Argument,” is available free (including video, audio, and Q&A) here. Also, don’t miss his excellent course, “Topics in Intellectual Property: The Computer and Biotech Revolutions,” ready for audio download at the Ayn Rand Institute eStore.
Like most Americans, I have been following the news on the rollout of the latest health care law: The Affordable Care Act, otherwise known as Obamacare. First there were the website issues, then the advertisements targeting young people, then the millions of Americans who had their insurance policies canceled, and then Obama kind of apologized, then he “let insurers restore canceled plans” according to a recent headline. I’d say it’s been a roller coaster, but that implies ups and downs. It feels more like careening deeper into an ever-widening black hole.
Having spent years focusing on science and research, I have to admit that I felt a bit blindsided by the new law. Unlike the typical slow, baby-step-march toward more and more laws, rules and regulations, Obamacare seemed like a new, radical, big-boy-leap into a lot more government controls on health care. But while browsing Obamacare news stories this week, I happened upon a slide show that showed me just how many and how long American presidents have been leaping down the road to government controlled healthcare. It was a real eye-opener.
The slide show is titled Health Care Reform Efforts throughout History, and it contains pictures and captions of American presidents who have pushed to expand government intervention in health care. The first photo features Roosevelt (the first Roosevelt).
It’s from 1912.
Here are some highlights: The second Roosevelt (FDR) wanted government health insurance but decided to “push for Social Security first.” Lyndon B. Johnson “arm-twisted” to have Medicare and Medicaid signed into law. Both Nixon and Carter pressed for health care subsidies and national health care, but other things intervened. George W. Bush was responsible for the biggest government expansion into health care this century (before the latest law, of course).
I guess I should’ve seen this Obamacare thing coming.
Obamacare is just the latest in a long line of laws aimed at eroding freedom, tying the hands of doctors, and crushing the private health care market for the sake of a supposed public good. Standing behind a podium at his latest press conference, Obama spoke about not wanting to return to the “old individual market,” but the truth is there hasn’t been much individualism in health care for a long time.
Obama also said that none of the problems with the rollout should be used as an excuse to go back to the way things were, back into a “broken system.”
On that theory, it’s worth noting the many people, primarily on the left, who are criticizing Ayn Rand these days. In the last week or so, an article appeared in Business Insider called “’Atlas Shrugged’ Is Full of Terrible Business Advice.” I responded to that in Forbes.com. And former regulatory czar Cass Sunstein wrote an article for Bloomberg applauding Whitaker Chambers’s infamous review of Atlas Shrugged. My colleague Don Watkins responded to that one on the LaissezFaire blog.
Most recently, Andrew Leonard wrote a short piece for Salon called “Silicon Valley throws Ayn Rand under the bus.” What does that mean? Well, it turns out it wasn’t all of Silicon Valley, but only Travis Kalanick, the founder of Uber cab, and he didn’t throw Ayn Rand under the bus even figuratively, he only changed his Twitter avatar from the cover of The Fountainhead to a picture of Alexander Hamilton.
So . . . yeah.
But leave aside the inherent silliness of this article’s title and let’s see what significance Leonard gives to this momentous development. He speculates that
Uber has discovered that disrupting the existing taxi monopolies in the world’s great cities is easier said than done. Safety and health regulations, insurance issues — there are all kinds of nasty hoops to jump through if you want to make a big business of transporting citizens around urban metropolises. Like it or not, Silicon Valley’s most ambitious startups will be forced to work with government, instead of blowing it up.
Ayn Rand, he claims, “is simply not a useful guide to operating in a modern economy. Alexander Hamilton is where it’s at.”
Let’s put this in perspective. Uber has faced protectionist laws in local markets all across the country. Among other things, the laws prevent Uber’s cars from picking up customers within an hour of when they are called, they impose minimum fares, and they prohibit Uber’s vehicles from coming within 200 feet of a restaurant, hotel, or bar. Uber is trying to get around all these idiotic laws and to give customers a better service for their taxi buck. The company doesn’t oppose having insurance or safe business practices, and it isn’t trying to “blow up” the government. It opposes laws that force it out of local markets so the gang at city hall can hand a monopoly over to existing taxi businesses—businesses that have remained essentially the same for about century.
Leonard’s response is to say, in essence: deal with it, Kalanick. That’s life. To hell with innovation. To hell with customers who want transportation better suited to the 21st century than the 19th. To hell with the many drivers whose businesses will boom because of Uber. Don’t fight; accept. And above all, ignore the one thinker who made clear that the battle against laws like these is primarily a moral battle and that people who fight these battles are heroic.
Funny, I thought people on the left fancied themselves champions of morality, justice, and progress.
Here’s a little speculation of my own. Ayn Rand’s critics understand that if you want to defeat capitalism, you need to defeat its best defender. Ayn Rand is certainly that. At least they know where to aim their slings and arrows.
Researchers at the University of California at Berkeley recently came out with a study arguing that the low wages of the fast-food industry are a burden on society, since, apparently, more than 50% of fast-food workers rely on public assistance. “A very easy policy fix here would [be] to raise the minimum wage,” says co-author Sylvia Allegretto. That way the fast-food industry would compensate for the “public cost” of their low-wages.
The impression the minimum wage lobbyists want you to get is that the fast-food industry is forcing unjustifiably low-pay on to workers who are powerless to refuse. But the industry is not in any position to set wages arbitrarily. It has to compete for workers by offering wages that reflect the market value of their work. If a business offers people more than they are worth, it will lose money. If it offers people less than they are worth, they will work elsewhere. The cause of low pay in the fast food sector is not industry stinginess, but the fact that these are low-skill, low-experience jobs.
The fast-food industry is not forcing anyone to accept the wages they offer. On the contrary, people accept these wages voluntarily. But by taking entry-level jobs such as these, people can gain the skills and experience needed to land better jobs in the future. It is unjust to insinuate that the fast-food industry makes people dependent on public assistance when it actually gives people a chance of getting out of poverty.
If the government raises the minimum wage, the actual wage for some people will not be $15 or even $8 per hour; it will be $0, since the minimum wage causes some workers to be priced out of the market.
The fast-food industry is not imposing costs on society. The only real “public cost” to the taxpayers is the welfare system itself. If the minimum wage lobbyists are opposed to “public costs” it’s the welfare state they should oppose.
On October 8, the Ayn Rand Institute hosted a panel discussion featuring scholars from the Heartland Institute, who emphasized the need to put the climate change debate into context.
Every five years or so, the Intergovernmental Panel on Climate Change (IPCC) releases a report with a detailed assessment of the current state of the climate. These reports, and the analysis of computer models they contain, predict a bleak future. Dr. Keith Lockitch, fellow at the Ayn Rand Institute and moderator of the panel, points out that the climate change debate “tends to be dominated by the reports of the IPCC.” He adds that these reports declare, “in ever more shrill terms that because we drive cars and use electricity, we are destroying ourselves and the planet.”
It is these claims of global catastrophe that have become the foundation for a public policy geared toward severely limiting and politically controlling the world’s use of energy. But is it good science?
The IPCC “represents itself as the consensus on climate change,” said panelist Joe Bast, President and CEO of The Heartland Institute. But according to Bast, other scientists have pointed out serious flaws in the IPCC reports, raising questions as to the veracity of some of the IPCC’s claims. Bast decided to rally a team of scientists willing to impartially examine the evidence and findings of climate scientists across the peer-reviewed literature. They called it the Nongovernmental International Panel on Climate Change (NIPCC), and it brought together some of the world’s most respected climate scientists, such as panelists Dr. S. Fred Singer and Dr. Robert M. Carter.
Both Carter and Singer were present at the panel to discuss the NIPCC’s fourth and latest report: Climate Change Reconsidered II: Physical Science. At over 1000 pages, put together by 47 geologists, astrophysicists and climate scientists in over 15 countries, with 4,000 references to peer-reviewed literature, the NIPCC report and most recent IPCC report may look similar on the surface, but they have one important difference.
Both reports rely on the same corpus of peer-reviewed literature, but the NIPCC, according to Bast, “comes to just the opposite conclusion . . . specifically, that the human impact [on the climate] is very small [and] that future warming is probably very modest and very hard to tell from background variations.” He added that based on the science, “there really is no justification for governments’ attempting to reduce energy consumption and emissions.”
Carter, a marine geologist and one of three lead authors on the NIPCC report, was the first panelist to dive into the science. What’s missing from the public debate on climate science? According to Carter, it is captured in a single word: context. Carter sheds light on this missing context by first making clear the difference between weather and climate. Whereas weather is the changes in Earth’s surface conditions that occur on a day-to-day or month-to-month basis, climate is the thirty-year-average of weather. Over the past 150 years of accurate weather station data, that means that we have just five of these 30-year climate data points.
“Frankly, for me,” Carter said, “it is utterly astonishing that on the basis of five data points the world has been talked into revolutionizing its energy economy . . . .”
Showing the same graphs that are shown to first-year geology students, Carter puts those last five data points into context with the last 6 million years of climate data. Looking over these millennia, he says he has come to the conclusion that today’s temperature is not unusually warm—despite what is often heard on the news.
Another lead author on the NIPCC report, Singer, who at 89 is still a prolific writer, concentrated his remarks on what he considers to be an issue of greater importance to most people than fluctuating temperatures: sea-level rise.
Sea level rise is important—during the last ice age, 18,000 years ago, sea level was about 400 feet lower. You could walk from England to France. There was no North Sea. Sea level has been rising about 7 inches a century and will continue to rise until the next ice age.
After examining the data, Singer has come to the conclusion that sea-level rise is not accelerating (as is claimed in the IPCC report) and “like the tides, there is nothing we can do about it, we just have to adjust to it.”
During the audience Q&A, panelists observed that past periods of relative warmth, like the one we appear to be entering, have been a boon for agriculture and society in general. Regardless of which way the temperature goes, people have been adapting to the climate for thousands of years—even without the buildings, machinery, automobiles, technology, and indoor heating and air conditioning that make it relatively easy to adjust today.
Listening to the panel, it struck me that this “ability to adjust” is exactly what is at stake in the climate change debate. The one thing that gives people the best chance of adapting to changes in climate is the one thing that environmentalists want to see taken away: access to plentiful and reliable energy, whether that be coal, oil or nuclear. It is this energy, combined with the wealth it enables us to produce, that keeps us safest from changes in weather, temperature, climate and changing sea levels. Considering that the changes, as well as the impact of human CO2 emissions on the climate, have so far been modest, there seems to be no justification for plans to starve the world of this life-saving energy—especially if the climate change debate is put into its proper context.
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Newspaper editorial writers in New York, Washington, D.C., and Dallas are playing Monday morning quarterback, assessing this week’s antitrust litigation settlement that will allow American Airlines to merge with US Airways. The debate centers on which side “won.”
Some say it was a victory for the government, because lower cost airlines like Southwest and JetBlue will now have more flights to and from major airports—flights that the merging airlines were forced to surrender under the DOJ’s threat of an injunction forbidding the merger altogether. Others say it was an embarrassing defeat for the government, because the airlines got away with relatively minor concessions for the privilege of raking in an estimated billion dollars in “annual net synergies.”
These discussions, while interesting, miss an important point. As things stand, all sides take for granted the validity of antitrust law. Although opinions diverge when it comes to individual cases, the consensus view is that antitrust provides needed remedies for actual legal wrongs. But when we stop to look closely at the facts, and then look again, it turns out there are no actual violations of rights on which a lawsuit could properly be based.
Consider the airline merger: When the two companies proposed earlier this year to merge their businesses, they did not violate other airlines’ right to stop competitors from growing—there is no such right. The companies did not violate airline passengers’ right to dictate prices and routes at airports around the country—there is no such right. The airlines certainly did not violate politicians’ right to influence what flights will be available at their favorite airports—there is no such right. The proposed merger did not violate any contracts, did not perpetrate any fraud, did not trespass on anyone’s property or steal anyone’s money. So where’s the basis in reality for the DOJ’s lawsuit?
I would like to see the antitrust establishment try to make the case that anyone’s actual rights were violated by the airline merger proposal. I would like to see them name the right, validate it from the ground up, and defend its logical consequences. If they can do it, let’s debate the strength of their case. But if they can’t, then let’s debate whether the antitrust laws deserve to survive.
In discussions on Facebook and Twitter, I often see people say something like “People who support raising the minimum wage don’t understand economics.” By this, they are insinuating that supporters fail to grasp that raising the minimum wage will put some people out of work, and that those supporters would oppose the minimum wage if only they understood this. But this issue is far more complex than understanding this one economic truth.
What happens when the government raises the minimum wage? Suppose a fast food franchisee—let’s call him Hamburger Bob—has 20 employees, all of whom make $8 per hour. If the government forces Bob to instead pay a minimum wage of $10 per hour, then one possible outcome is that Bob might resignedly let 4 employees go, raise the pay of the other 16 to $10 per hour, and then struggle to maintain his restaurant with fewer hands on deck.
This is what generally happens when the minimum wage is raised: some individuals lose their jobs or see their hours cut. Many others see a small boost in income. More sophisticated supporters of raising the minimum wage understand this, and they see it as a desirable outcome, often arguing that these “costs” are outweighed by the “benefits.”
Now, we could debate numbers, and argue that the unemployment created by the minimum wage is far worse than its supporters realize. But, rather than limit a discussion of people’s livelihoods to cost-benefit analysis, I think we should be asking more basic moral questions. If Bob created his business, and he has a team of employees who are willing to work for him for around $8 per hour, then shouldn’t he rightfully be free to employ them at this wage? Is it right to saddle a small business owner like Bob with thousands of dollars in additional monthly labor costs because there are some individuals who currently don’t have the resume to earn a $9+ per hour wage? Is it right to put people like Frank—a young man working for Bob—out of work so that others can get slightly higher pay?
Questions like these must be addressed.
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Microbes have been assisting mankind for centuries. Yeast and bacteria help us with many tasks, such as fermenting beer and producing yogurt. Each of these microorganisms acts as a tiny chemical factory—one substance goes in as food for the organism, and another is secreted as waste. Take yeast, for example: They take in sugar as food and produce alcohol and carbon dioxide as waste products, which make them ideal for brewing beer. Mankind has been using microorganisms for ages to make cheese, bread and even assist in copper mining, but up until recently, the products they could produce were limited. Last week I wrote about how scientists are using the technology of genetic engineering to custom-build microbes, thereby determining the substances these tiny chemical factories produce.
In the 1970s, scientists discovered how to insert genetic instructions into yeast and bacteria, directing them to produce virtually any compound, from medicines to jet fuel to cheese-making enzymes. Now these genetically modified organisms (GMOs) are on the forefront of biotechnology and are poised to start a “third industrial revolution,” according to a recent article in the Washington Post.
Hundreds of new bio-synthesized compounds are in the development pipeline. A Swiss company is expecting to soon roll out a bio-synthesized vanilla, produced by yeast that have been genetically engineered to generate the flavoring as a by-product when fed sugar. Real vanilla beans are expensive, harvested from the seeds of a finicky orchid that grows in rainforest climates. It takes five hundred pounds of these seeds to produce a single pound of vanilla. Synthetic vanilla flavorings on the market today have failed to capture the complexity of genuine vanilla beans. But the Swiss company, Evolva, claims that its bio-synthesized vanilla comes much closer to the original and will be much cheaper to harvest.
These genetically engineered “biofactories” are not just used in food production, they are also used to make a slew of life-saving medicines, needed vaccines and rare human hormones.
Each year, millions suffer from malaria, and hundreds of thousands die—hardest hit are African children under the age of five. Artemisinin, a medicine derived from the leaves of a wormwood plant native to China, has shown itself to be highly effective in treating malaria (even more effective, it seems, than quinine, a popular anti-malarial drug). Like vanilla beans, the wormwood plant from which the medicine is traditionally harvested is problematic to grow in the needed quantities, which has caused the price to fluctuate wildly.
Amyris, a California-based biotech company, has attacked this problem by using genetically engineered yeast to synthesize artemisinin. Using a computer to insert the sequence of genes needed to make yeast produce the medicine as a byproduct, the company has found a way to synthesize large quantities of the medication, without the need to harvest any wormwood plants. This year, Amyris produced 35 tons of the stuff. Enough for 70 million treatments.
Not surprisingly, environmentalists have come up with excuses to oppose these biofactories. I’ll talk about them in a future post.
The post The benefits of custom-built microbes (#GMOMonday) appeared first on VOICES for REASON.
Steve Simpson, ARI’s new Director of Legal Studies, has just published a dynamite op-ed on Forbes.com. The title is “Atlas Shrugged Is A Book About Pride In One’s Work, And The Success That Results.” It’s a response to a piece published recently in Business Insider called “‘Atlas Shrugged’ Is Full Of Terrible Business Advice,” by a writer named Max Nisen.
From Steve’s article:
In Atlas Shrugged, Ayn Rand presents a vision of man that is unlike anything ever written. Rand’s ideal man is the visionary, the genius, the producer. Her foremost representatives of this ideal are businessmen, whom she portrays, at their best, as heroes, not villains; creators, not parasites.
Rand’s vision has inspired successful people from all walks of life for generations. They love the book, not because it tells them how to make better yoga clothing or run a better taxi service, but because it offers profound insights about the principles that lead to success (or failure) in any field, and it shows those principles playing out in the lives of the novel’s characters.
The book has been criticized often in the five decades since it was published. Most frustrating for those of us who love it are critiques that misunderstand its essential points and end up attacking straw men.
Instead of dwelling on the errors and misrepresentations in Nisen’s article, Steve concentrates on summarizing the valuable advice actually contained in Atlas Shrugged. Here are the headings under which his discussions fall:
Take pride in your success.
Pursue your own happiness and achieve it.
Money is the product of virtue.
Trade is a virtue, but sacrifice is not.
Government is a necessary good.
Read the whole article here.
Back in 1997, a federal court blocked the proposed merger of Staples and Office Depot. But just last week, the Federal Trade Commission decided to end a seven-month investigation and allow a similar merger, one between Office Depot and OfficeMax.
What accounts for the difference in results between sixteen years ago and today? Has there been a sea change in antitrust law? Not at all.
Back then, the “big box” retail revolution was in its infancy. Staples and Office Depot had created a new retail experience: the office superstore. By virtue of their innovation, customers were becoming accustomed to paying significantly lower prices for all sorts of consumable office supplies.
In 1997, the proposed merger excited fear and resentment at the prospect of prices rising in locations without a competing OfficeMax superstore. Consumers were feeling entitled to the prices of their choice — prices they would never have enjoyed but for the innovative genius displayed by the merging companies — and antitrust law accorded their resentments the status of legal injuries.
In response the Federal Trade Commission filed suit, and Judge Thomas Hogan issued an injunction killing the planned merger, admitting in his decision that, to some extent, “the defendants are being punished for their own successes, and for the benefits that they have brought to consumers.”
That was 1997. Why the different result in 2013? In a press release, the FTC said that the “market for the sale of consumable office supplies has changed significantly in the intervening years.” It seems that today’s merged company will face national pricing pressures from a variety of competitors including Amazon.com and other online retailers, plus brick-and-mortar stores like Costco, Wal-mart, Target, and of course, Staples. As a result, the FTC detected insufficient antipathy from competitors and customers to support an antitrust action blocking the Office Depot-OfficeMax merger.
So even though the result was different this time than in 1997, that doesn’t signal any fundamental changes. Antitrust remains what it has always been, a pernicious doctrine that transmutes economic bitterness into legal claims, condemning the nation’s best, most innovative companies to be “punished for their own successes.”
Why do we need Obamacare, the greatest expansion of government in almost fifty years? According to New York Times columnist Nicholas Kristof, tales like that of Richard Streeter, a 47-year-old truck driver, illustrate why. Kristof writes:
[Streeter’s] problem isn’t Obamacare, but a tumor in his colon that may kill him because Obamacare didn’t come quite soon enough.
Streeter had health insurance for decades, but beginning in 2008 his employer no longer offered it as an option. He says he tried to buy individual health insurance but, as a lifelong smoker in his late 40s, couldn’t find anything affordable — so he took a terrible chance and did without.
At the beginning of this year, Streeter began to notice blood in his bowel movements and discomfort in his rectum. Because he didn’t have health insurance, he put off going to the doctor and reassured himself it was just irritation from sitting too many hours.
This September, Streeter was finally diagnosed with advanced colon cancer. According to Kristof, there is “just one bright spot” for Streeter, who “is bracing for an arduous and impoverishing battle with the cancer”: Obamacare forbids insurers from turning him away and requires them to charge him no more than they would a healthy person.
My takeaway is the opposite of Kristof’s. Streeter’s tale of his health insurance nightmare speaks to why we need to remove government intervention in health care, not introduce more of it (in the form of Obamacare). I can think of at least two reasons why Streeter would have been better off had government not already been so entrenched in our health care system.
First, if the government were not manipulating his choices via tax policy, Streeter could have chosen to buy an individual health insurance policy all along, versus getting coverage through his employer. His employer’s decisions would then have had no impact on his coverage status, and he wouldn’t have suddenly found himself uninsured, needing to apply for individual coverage in his higher-risk (i.e., higher premium) state (given his age and lifestyle choices).
Second, if the government were not distorting actuarial practices and regulating the business of insurance more broadly, insurers would no doubt be able to offer policies at a range of price points, including lower-priced policies than they do today. People would no longer be required to subsidize the coverage of others, be it by forcing them to buy coverage for every service under the sun or by requiring insurers to price a customer’s policy higher than his risk profile justifies.
Obamacare doesn’t fix these problems. It only hides the destructive effects of previous regulation by forcing others to shoulder the burdens of the sick (this is the function, for example, of the individual mandate). The law will also create further problems for someone like Streeter. For example, by requiring insurers to accept less healthy customers at the same premium as healthier ones, Obamacare incentivizes insurers to avoid the former.
The proper solution is to undo the government controls that are causing the very real problems Streeter and many others face. This means freeing the health care market.
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I’ve written previously about the difference between health insurance coverage that is purchased through an employer and that which is bought on your own on the individual market. The primary difference is that if you get insurance through your workplace, you don’t have to pay taxes on those premiums, whereas if you buy coverage on your own, you do.
A common conception of this government-instigated arrangement is that those who have employer-sponsored coverage are receiving a subsidy from the government by not having to pay taxes on their insurance premiums.
For example, Josh Barro of Business Insider writes:
Take a look…at Sen. Ted Cruz (R-Texas). Cruz has frequently noted that he declines the health plan that is offered to him as a member of Congress. Instead, he is covered through insurance that his wife gets as a Managing Director at Goldman Sachs.
Health care economist Austin Frakt ran the numbers on that Goldman plan. As of 2009, Goldman’s health insurance coverage for employees at the managing director level and higher cost a stunning $40,000 per family….
Health insurance benefits are not taxable income, so Cruz and his wife get a big tax break on that plan. The break cut their tax bill by about $15,000 as of 2009, the last year for which we know the plan’s value. The Cruzes aren’t alone; every American who gets health insurance coverage through work gets this tax break…
Cruz is getting a tax break…even though he is a Senator and his wife is a highly paid investment banker and they have no need for subsidies to obtain health coverage.
Conceiving the act of not paying taxes as getting a subsidy implies that your income belongs to the government. The government then supposedly does you a favor by letting you keep some of the money it’s entitled to seize. Your take-home pay, on this view, is a social subsidy that government can adjust downward with impunity.
But that is the wrong way to conceive the issue. Your income properly belongs to you. When the government decides not to tax a portion of it, it isn’t giving you anything—it is recognizing, at least implicitly, your moral right to keep what you earn (a right the government violates when it taxes the premiums of those buying coverage on their own).
Why is it crucial to properly conceptualize the tax exclusion for employer-sponsored coverage? I’ll address this question in a future post.
The post The government does you no favors by not seizing your income appeared first on VOICES for REASON.
The U.S. Institute for Science and International Security has found that Iran could “break out” and produce a nuclear bomb with its existing centrifuges and uranium stockpiles in as little as one month. Talks between Iran and the six Western powers continue, while centrifuges continue to whirl.
What should the U.S. do now? What should Israel do now?
Join us as three Children of Jewish Holocaust Survivors panelists discuss these issues. J.E. Dyer discusses the strategic considerations in the Middle East. Elan Journo discusses the issues from the U.S. perspective. Rick Richman discusses the issues from the Israeli perspective.
The Q&A promises to be lively. Further information and registration here.
The post Iran Closes In On a Bomb: What Should We Do Now? [event] appeared first on VOICES for REASON.
Yeast and bacteria may be small, but they are mighty. Mankind has been harnessing the power of these tiny microorganisms for centuries. Bacteria transform milk into yogurt, are used in the mining of copper and remove waste from water. If you feed sugar to yeast, in a mixture of water and hops, it will reward you by producing carbonated beer. If there is one thing that these microbes are good at, it is taking in one substance as food and turning it into another as waste. And what is one organism’s trash could be another’s treasure.
In the 1970s, genetic engineers discovered the technology to custom-build these tiny “factories.” By inserting genetic instructions into bacteria or yeast—thereby modifying their genetic code—scientists have used microbes to create all sorts of substances, from vaccines and medicines to enzymes that help with the manufacture of cheese.
Take rennin, for example, an enzyme that is used to make cheese. Rennin is found naturally in the lining of a calf’s stomach—this enzyme helps the calf to break down and curdle its mother’s milk for better digestion. The best cheeses are made using genuine calf rennin, but it is problematic to harvest in quantity. Since the late 1990s, cheese makers have been using rennin that has been synthesized by genetically engineered bacteria. Knowing the genetic code that produces the enzyme within the lining of the calf’s stomach, genetic engineers inserted that gene into bacteria. Much like the process of brewing beer, if you feed these bacteria the nutrients they need, the “waste product” they produce is the valuable rennin enzyme. It is estimated that 80% of the global cheese market relies on this bio-synthesized rennin.
But the capabilities of microbes go way beyond cheese making. Genetic engineering of these tiny helpers has taken leaps and bounds forward in the last few years. Using a computer to program and insert the correct gene sequence into yeast, scientists can quickly create the microorganism they need to make virtually any desired compound. The stories are nothing short of amazing. On the list of substances that these “biofactories” are producing are jet fuel, fragrances, cosmetics, flavorings and medicines.
The technology is especially useful when the needed substance is rare, expensive or difficult to synthesize using chemistry alone. I’ll fill you in on a few of these breakthroughs next week.
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