Category Archives: Economics (Competition)

The Coronavirus Panic: Pure Waste or Midwife of Progress?


The Coronavirus Panic:
Pure Waste or Midwife of Progress?
Sean Gabb
15th April 2020
(Published in The Libertarian Enterprise)

One of my Books
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I remain sceptical about the dangers of the Coronavirus. Of course, it is an unpleasant illness, and no one should go out of his way to catch it. At the same time, we are into the fifth month of the panic, and the predicted mountain of corpses has still not appeared. Whether in countries that have imposed a lockdown, or those that have not, rates of infection and of death seem to be reaching the peak of their distribution curves. It may be that the final impact on the health of mankind will be no worse, or not much worse, than that of a severe seasonal flu. Even if, minus the lockdown, the potential impact might have been three or four or five times greater, it may still be worth asking if, on any reasonable calculus of cost and benefit, the resulting slump was worth the small saving of lives. Read more

Why Tax Breaks Won’t Stop High-Tech, H-1B Human Trafficking


By ilana mercer

“If the tax reform bill goes through, do you plan to increase your company’s capital investment?”

The question was posed to a sizeable group of CEOs at The Wall Street Journal’s CEO Council, in the presence of White House economic adviser Gary Cohn.

A pitiful show of hands failed to wipe the smirk off Mr. Cohn’s face. But at least the knaves were candid. Tax cuts for American big businesses are unlikely to move corporations to deploy that capital to raise the wages of the little guy, the worker.

The repatriation deal planned for fat-cat multinationals is particularly sweet. But don’t expect the “one-time tax rate of 12 percent on cash returns and five percent on non-cash for corporate money repatriated from overseas” to spur investment in the U.S.

Ideally, policymakers would prefer, as Business Insider quips, for companies to “reinvest in their core businesses, as this holds the most direct bearing on economic expansion.” All the president’s men certainly preach it.

But President Trump’s plan to grant the multinationals, tech titans included, a tax holiday, is more likely to see capital used to tinker with share prices. Repurchasing shares, a share buyback, will boost stock prices and benefit large shareholders.

Where a multinational also traffics in human labor, globally—as do the likes of Apple, Cisco, Microsoft, Oracle, Qualcomm, etc.—a lower tax rate on their repatriated earnings is unlikely to redound to American computer programmers and engineers.

In the event these tax holidays encourage American high-tech to “reinvest in their core businesses”—it will not be an investment in employing American talent, which will continue to be replaced apace with foreign workers.

For accretion in employment among Americans to occur, the president would have to turn off the H-1B (and other visa) spigots. He has not.

Multinationals consider the world their labor market. High-tech traitors will continue to replace the worker bees of American STEM—science, technology, engineering and mathematics—with reliably mediocre, culturally aggressive, foreign workers.

And not necessarily because foreign workers are cheaper. Importing workers from India calls for enormous in-house bureaucracies to handle immigration applications and renewals, attendant litigation, and family importation and resettlement packages for tribes of new arrivals (also known as chain migrants). This isn’t necessarily cheaper than employing your local lass or lad.

The H-1B visa racket is, however, a taxpayer-subsidized, grant of government privilege. Duly, profits remain private property.  The costs of accommodating an annual human influx are socialized, borne by the bewildered community.

Moreover, with the exception of Indian companies, such as notorious H-1B hogs Infosys and Tata, visa holders in “marquee high-tech firms like Google and Microsoft” are not paid inferior wages. That’s against American labor and anti-discrimination law.

From the fact that an oversupply of high-tech workers has lowered wages for all techies, it does not follow that the (average) men and women imported are being exploited. Rather, it is the glut of average worker bees—their abundance—that has depressed wages for this particular, high-tech cohort.

So, please conservatives, quit crying croc over alleged exploitation, in the high-tech industry, of poor, foreign-born, “indentured slave-labor.” Misplacing compassion does not add force to the argument, for these are the facts:

Again, H-1B visa holders are not paid inferior wages; they’re getting a fabulous deal. Remember: Voluntary exchanges are by definition advantageous to their participants. They involve giving up something one values less (life in Calcutta) for something one values more (life in Seattle), and finding someone else with “opposite valuations”: An Amazon or Microsoft CEO who values people from Calculate more than kids from Kent.

Humor aside, ceteris paribus (all other things being equal), the H-1B visa holder forfeits his (unexceptional) labor for a salary many times the salary he’d get in India or China or Pakistan. If he were not incalculably better off than he was in his previous life, he would not have taken a calculated risk … in a plush American office or a well-capitalized US laboratory.

No, it’s the American STEM worker who is stiffed.

Perversely, companies such as Qualcomm, Hewlett-Packard and Microsoft pair aggressive demands for more H-1B visas (those shortages, you know) with a ruthless downsizing of domestic workers—this worker deserves your tears, not his imported replacement.

The price of labor in the high-tech labor market is a function of a political, artificially created, ceaseless supply of immigrants. Prattle about the price at which American workers will do certain work is meaningless without a reference to borders and to the thing they bound—communities. Render asunder the quaint idea of borders—and the world is your labor market; communities be damned.

Realize that this ceaseless supply of labor is maintained not through peaceful market forces, but through the use of political power, wielded by wealthy men and women with access. At work here is their Brave New Borderless World, not the invisible hand we love.

Look deeper before maligning the Profit Motive, as the Left wants you to do. Power, more than profits, is what animates high-tech. Just imagine the thrill of seeing your idea of virtue turned into policy that affects the greatest economy in the world.

For tech superstars are true believers in the borderless multicultural state. These arrogant CEOs and their minions are social-justice warriors, first; giants of industry, second.

Already billionaires, tech execs derive greater pleasure from signaling their virtue (via immigration) than from turning a profit. They aim for stardom in Davos, Switzerland, not Des Moines, Iowa.

 

Ilana Mercer has been writing a paleolibertarian column since 1999, and is the author of The Trump Revolution: The Donald’s Creative Destruction Deconstructed (June, 2016) & Into the Cannibal’s Pot: Lessons for America From Post-Apartheid South Africa (2011). Follow her on Twitter, Facebook, Gab & YouTube.

What about the Workers? A Libertarian Answer


What about the Workers? A Libertarian Answer
by Sean Gabb
(22nd July 2016)

I was called this morning by the BBC. It wanted me to comment on the claims that Sports direct, a chain of sports clothing shops, mistreats its workers – keeping them on zero-hours contracts, sometimes not paying them even the minimum wage, scaring them out of going sick, generally treating them like dirt. Would I care to go on air to defend the right of employers to behave in this way? I am increasingly turning down invitations to go on radio and television, and this was an invitation I declined. I suggested the researcher should call the Adam Smith Institute. This would almost certainly provide a young man to rhapsodise about the wonders of the free market. My own answer would be too complex for the average BBC presenter to understand, and I might be cut off in mid-sentence. Read more

Workers of the World Unite for a Free Market


Sheldon Richman
Workers of the World Unite for a Free Market

Protected firms can get away with abusing workers.

By way of Roderick Long I’ve learned that Amazon.com has some pretty rough rules for its employees. (Long draws on the Huffington Post and the Times Online.) According to the Times, employees at the Bedfordshire (UK) warehouse were: Read more

Godfrey Bloom, Speech to the Swinton Circle, April 2015


Godfrey Bloom

It is always a pleasure to come and speak to the Swinton Circle, although not the easiest of tasks, like the Cambridge University Conservative Association or Mises Institute the audiences are some of the most informed in the world, the same problem when writing for Breibart or Libertarian Alliance. An expert audience makes it difficult to add value; you risk people going home thinking ‘I knew all that’. So it is often a case of emphasis or revision or simply a new angle. It is inevitable that many of our views are subjective. I remember in Cambridge giving an opinion on same-sex marriage. A post graduate suggested that Nozick would not have agreed with me, well as Bogart said in The Big Sleep when criticised over his manners, ‘I sit up at night grieving over them’. Who knows whether he would agree with me or not? Read more

A Freed Society Would Not Be Problem-Free


Sheldon Richman

In 1970 country singer Lynn Anderson had a hit recording of a Joe South song that opened with the line:

I beg your pardon. I never promised you a rose garden.

I often think of that song in connection with the libertarian philosophy. You may be asking: for heaven’s sake, why?

Because it’s what I want to say to people who seem annoyed that freedom would neither cure all existing social ills immediately nor prevent new ones from arising. It’s a strange demand to make on a political philosophy — that it instantly fix everything that the opposing philosophy has broken. Moreover, I’m concerned that some libertarians, in their justifiable enthusiasm for “the market,” inadvertently lead nonlibertarians to think that this unrealistic expectation is part of their philosophy. Of course, that is not good because nonlibertarians won’t believe that the market would make all things right overnight, and so they’ll write off all libertarians as dogmatists. Read more

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