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A Lack of Faith in the Invisible Hand – the Governmental Postal System

No, We Don’t Need a Government Post Office

08/22/2020

The US Postal Service has recently made a comeback in the headlines. Not only has the red ink it has long bathed in gotten deeper, but now it has become embroiled in mudslinging over vote-by-mail issues, such as people failing to get the ballots mailed to them and possible delays in processing election results, using that to make “new and improved” monetary bailout requests, with politicians and letter carrier unions attacking any cutbacks in service, even down to dropping underutilizing drop boxes.

With the Postal Service’s massive and unsustainable losses, what is striking is that even with a new reformer in charge, there is virtually no consideration of abandoning the USPS’s monopoly on first-class mail, allowing rivalry from private providers to reveal the services and prices market competition could offer. Not only does competition have a long record of success in countless products and services, but history shows it is not impossible in postal services. As Adam Summers has written,

Several private mail entrepreneurs sprouted up from about 1839–1851. While they were eventually shut down by the government, they proved that private mail delivery was possible. And the competition they provided forced the government to drastically reduce its prices in the process.

Summers brings up an important question: What so blinds us to even the possibility of allowing postal competition? He is not the first to ask that question. Leonard Read, wellspring of the Foundation of Economic Education and tireless advocate of “freedom philosophy,” wrote about the postal monopoly several times, starting more than half a century ago. The current mail meltdown makes it worth revisiting his understanding. Consider his insights from “Pre-Emptors: Agents of Destruction” in Comes the Dawn (1976) and “Causes of Authoritarianism” in Why Not Try Freedom? (1958):

Any time any activity is preempted, all thought as to how it would be conducted by free and self-responsible people is deadened.

An example…mail delivery. Our postal system is a socialistic institution….Its record? As all users know, a dramatic increase in rates, enormous deficits mounting annually, and service deteriorating rather than improving.

Observe the effect of this pre-emption: no intelligent thought of what this type of communication would be like among a free and self-responsible people.

There are many among us…without the slightest idea of what the freedom alternative would be. Why this blindness as to the results of freedom? The answer is: the actions of free men are quite impossible to foresee!

It is one thing to believe that competition affords more efficient service than does a monopoly. Indeed, this very belief is implicit in the arguments of government officials who refuse to permit private delivery of mail: the U.S. Postal Service couldn’t stand the competition; someone else would do it more efficiently and at less cost to the customer.

But as long as the monopoly is coercively maintained, there is no legal way to prove that the cost of performing an identical service would be lower under competition—or how much lower. Nor can it be proved beyond doubt that competitive private enterprise would indeed perform precisely the same services now available through the Postal monopoly.

But this is the whole point of anyone who believes in the blessings of competition as the most efficient way to provide the goods and services customers are willing and able to pay for. Such faith must concede that no one knows or can know in advance just the form in which the postal service would emerge and develop were everyone free to devote his own ingenuity and time and scarce resources toward serving the ever-changing demands of willing customers in a free market.

If all those changing conditions could be foreseen by any one individual, there is no logical reason why he could not make socialism work. But that is the whole case against socialism and for competitive private enterprise: the unknown is not foreseeable or predictable with certainty; conditions change, and freedom affords us the best possible chance to cope with those changes.

If one believes the Postal monopoly should be abolished, it is in part because he has witnessed miraculous market developments in the delivery of items other than mail.

Take voice delivery. How far could the human voice be delivered prior to the beginning of the Bell system…[now] the miracle of the market—around the earth…at the speed of light….Those who find this not particularly amazing are nonetheless reluctant to entrust the delivery of mail to the unhampered and unpredictable ingenuity of a free and self-responsible people!

Why this fear to try—this lack of faith in the potential wonders that might be ours? There are at least two reasons: (1) we cannot foresee the unknown and, thus, we are not attracted to the unimaginable, and (2) the moment a miracle is wrought, we take it as much for granted as the air we breathe….We no longer give it a second thought.

Years ago, I observed that no person knows how to make such a “simple” thing as an ordinary wooden lead pencil. Yet, that year, we made 1,600,000,000 pencils in the U.S.A. Were we to grasp this single miracle of the free market, we would know that there is not a person who knows how to operate a postal service.

Why, then, does the Free Society work its wonders? Why, when no one knows how to make a pencil, do we have such a proliferation of goods and services?…ideas by everyone are free to flow!…Ideas configurate and show forth in everything from billions of pencils to jet planes.

But most people fail to generate ideas on activities that have been pre-empted.

As the belief grows that coercion is the only practical way to get things done…belief in the competence of man acting privately, freely, voluntarily, competitively, cooperatively declines. As the former increases, the latter decreases.

In the U.S.A., for example, government has a monopoly of mail delivery. Ask citizens if government should do this and most…will reply in the affirmative. Why? Simply because government has pre-empted this activity for so many decades that all enterprisers have ceased to think how mail could be delivered were it a private enterprise opportunity. Indeed, most of them have come to believe that private enterprise would be wholly incapable of effective mail service.

Yet, I note that each day we deliver more pounds of milk than mail. Further, milk is more perishable than a love letter, a catalogue, or an appeal for funds…the delivery of milk is more prompt and less costly to us than is the delivery of mail.

I ask myself, then, why shouldn’t private enterprise deliver mail? Private enterprise delivers freight.

But, no; my countrymen have lost faith in man’s ability, acting freely, to deliver letters…men who do such fantastic things have lost faith in themselves to do the simple chore of letter delivery.

Today, even the massive, ongoing failures of the US Postal Service and the new political attention being drawn to it seem unable to overcome a pervasive blindness to the potential of competition to benefit Americans. That vindicates Leonard Read’s insight that not only are the ideas and the benefits that freedom can create often preempted by government, but that people can, as a result, lose the belief that a free society can do those things that have been coercively crowded out. And, in his ominous words, “A decline in faith in free men and what they can accomplish results in a rising faith in disastrous authoritarianism.”

The current postal situation offers a chance to rethink what many have been lulled into taking for granted. Not only is real competition a valid alternative, despite our inability to know in advance precisely what it would look like, but if the history of freedom is any guide, it would be far superior.

From Mises.org, here.

Evil Tsar Abraham Lincoln

Lincoln’s Kind of “Soldier”

By 

August 12, 2020

A neighbor of mine who is unfamiliar with my career and writings recently thought he could stump me with the question of who was Lincoln’s first choice as commanding general of the Union Army in the “Civil War.”  He mistakenly thought he would surprise me with the answer of Robert E. Lee.  Yes, Lincoln did offer the job to Lee on the recommendation of his real first choice, General Winfield Scott (Known to the troops as “Ole Fuss n’ Feathers” because of his penchant for decorating his hat and uniform with colorful bird feathers).  The aged Scott gave way to George McClellan in November of 1861, something that Lincoln would soon regret.

The first major battle of the war, the First Battle of Bull Run, was a spectacular defeat for the U.S. Army, which was sent hysterically fleeing back to D.C. under bombardment.  According to James Robertson’s fascinating biography of Stonewall Jackson (), near the end of the battle Jefferson Davis himself appeared on the battlefield and was approached by a little-known Confederate officer named Thomas Jackson.  Jackson said to his president:  “Give me ten thousand men and I will take Washington.”  At that point Davis knew next to nothing about the man who from that day on would be known to the world as “Stonewall” Jackson, and so he declined.  (Jackson was an eccentric physics professor and artillery instructor at VMI before the war).  Had Davis accepted the offer the war could very well have ended the next day.

The war was all downhill for Lincoln for the next year, at which time he decided that George McClellan had to go.   McClellan was eventually replaced by Major General Ambrose Burnside, who promptly led the Union Army to another catastrophic defeat in the Battle of Fredericksburg in December of 1862.  But Burnside was not Lincoln’s first choice at that point, either.  His first choice was the Italian militarist Giuseppe Garibaldi (See Rory Carroll, “Garibaldi Asked by Lincoln to Run Army”).

Lincoln wanted the Italian militarist to command the U.S. Army because he had recently commanded an invasion of Sicily to force it to merge with Northern Italy and be ruled by one king, his boss King Victor Emmanual II.  At the time Sicily was not just an island but all of Southern Italy – Calabria, Lucania, Basilicata, Campania, Puglia, Abruzzi, and Molise.  This “southern kingdom” was the wealthiest of all the Italian regions and one of the wealthiest regions of Europe.

Like Lincoln, Victor Emmanual II wanted to be king of a large empire, and federalism or states’ rights stood in his way.  Garibaldi was his henchman who forced Sicily and the rest of Italy to come under the monopolistic, dictatorial rule of Victor Emanuel II.  According to Italian historian S. Ben Piazza (Garibaldi, Italian Unification, and Sicily), Emmanuel was attracted to Garibaldi because of his reputation as “an international adventurer [i.e., mercenary and pirate] and freebooter, better known for his paramilitary forays and terrorism carried out against civilian populations in South America . . .” (emphasis added).

Garibaldi quickly raised an army that seized the vast gold stores of Sicily, one of the biggest acts of plunder in all of European history.  Much of the loot was shared with Northern Italian politically-connected business supporters of Emmanuel, much as Lincoln’s economic policies were nothing if not a vast expansion of corporate welfare (protectionist tariffs, government-subsidized railroads, government control of the money supply).

Southern Italy was plundered and impoverished, just as the American South was by Lincoln’s invasion.  Late in his life Garibaldi stated that he would never try such a thing again for fear of being “stoned to death” from having caused so much “squalor and hate.”  It was that very performance, however, that earned him the offer of commanding general of the United States Army by Abraham Lincoln.  He was Lincoln’s kind of soldier.

At around the same time (Spring of 1862) another foreign military man with a thick Russian accent was rapidly gaining favor with Lincoln.  Ivan Vasilievitch Turchaninov was from the Cossack region of imperial Russia and was a member of the Czar’s personal protection regiment who had participated in the terroristic crushing of Polish and Hungarian uprisings.  He somehow made it to America in 1856 and, lo and behold, became employed by the Illinois Central Railroad where Abraham Lincoln was the general counsel.  He changed his name to John Basil Turchin, became a Republican, and was given command of the Nineteenth Illinois Infantry in 1861.

“Turchin” became notorious when in early May of 1862 his troops occupied Athens, Alabama after the Confederate cavalry had vacated the area.  He told his men that “I shut my eyes for two hours,” by which he meant that they had a license to loot, rape, and plunder; and so they did.  The “sacking of Athens” stripped all of the shops of their wares, and armed robbery of the population was rampant.  As was the gang rape of black women.

When word of this reached Major General Don Carlos Buell, he relieved “Turchin” of his command and commenced court martial proceedings.  The presiding judge at the court martial was future president, Brigadier General James Garfield, who said he was “horrified” at how Athens, Alabama was “sacked according to Muscovite custom” (Frederick Williams, , p. 121).  The court found “Turchin” guilty and was sentenced to dismissal from the army.

At that point Abraham Lincoln intervened by overturning the conviction and promoted “Turchin” to brigadier general instead, a move that was ratified by a vote of the Republican-controlled U.S. Senate.  This sent the message to all other Union Army officers that this is how the war is to be waged – against civilians, Russian style.  And so it was, for the next three years.  It is little wonder, then, why historian Lee Kennett, in his biography of General Sherman entitled Marching through Georgia, would write that had the Confederates won the war, “they would have found themselves justified . . . in stringing up President Lincoln and the entire Union high command for violation of the laws of war, specifically for waging war against noncombatants.”

From LRC, here.

Swedish ‘Herd Immunity’ Victorious – Politicians Don’t Care…

How bad is covid really? (A Swedish doctor’s perspective)

Ok, I want to preface this article by stating that it is entirely anecdotal and based on my experience working as a doctor in the emergency room of one of the big hospitals in Stockholm, Sweden, and of living as a citizen in Sweden. As many people know, Sweden is perhaps the country that has taken the most relaxed attitude of any towards the covid pandemic. Unlike other countries, Sweden never went in to complete lockdown. Non-essential businesses have remained open, people have continued to go to cafés and restaurants, children have remained in school, and very few people have bothered with face masks in public.

Covid hit Stockholm like a storm in mid-March. One day I was seeing people with appendicitis and kidney stones, the usual things you see in the emergency room. The next day all those patients were gone and the only thing coming in to the hospital was covid. Practically everyone who was tested had covid, regardless of what the presenting symtom was. People came in with a nose bleed and they had covid. They came in with stomach pain and they had covid.

Then, after a few months, all the covid patients disappeared. It is now four months since the start of the pandemic, and I haven’t seen a single covid patient in over a month. When I do test someone because they have a cough or a fever, the test invariably comes back negative. At the peak three months back, a hundred people were dying a day of covid in Sweden, a country with a population of ten million. We are now down to around five people dying per day in the whole country, and that number continues to drop. Since people generally die around three weeks after infection, that means virtually no-one is getting infected any more. If we assume around 0.5 percent of those infected die (which I think is very generous, more on that later), then that means that three weeks back 1,000 people were getting infected per day in the whole country, which works out to a daily risk per person of getting infected of 1 in 10,000, which is miniscule. And remember, the risk of dying is at the very most 1 in 200 if you actually do get infected. And that was three weeks ago. Basically, covid is in all practical senses over and done with in Sweden. After four months.

In total covid has killed under 6,000 people in a country of ten million. A country with an annual death rate of around 100,000 people. Considering that 70% of those who have died of covid are over 80 years old, quite a few of those 6,000 would have died this year anyway. That makes covid a mere blip in terms of its effect on mortality.

That is why it is nonsensical to compare covid to other major pandemics, like the 1918 pandemic that killed tens of millions of people. Covid will never even come close to those numbers. And yet many countries have shut down their entire economies, stopped children going to school, and made large portions of their population unemployed in order to deal with this disease.

The media have been proclaiming that only a small percentage of the population have antibodies, and therefore it is impossible that herd immunity has developed. Well, if herd immunity hasn’t developed, where are all the sick people? Why has the rate of infection dropped so precipitously? Considering that most people in Sweden are leading their lives normally now, not socially distancing, not wearing masks, there should still be high rates of infection.

The reason we test for antibodies is because it is easy and cheap. Antibodies are in fact not the body’s main defence against virus infections. T-cells are. But T-cells are harder to measure than antibodies, so we don’t really do it clinically. It is quite possible to have T-cells that are specific for covid and thereby make you immune to the disease, without having any antibodies. Personally, I think this is what has happened. Everybody who works in the emergency room where I work has had the antibody test. Very few actually have antibodies. This is in spite of being exposed to huge numbers of infected people, including at the beginning of the pandemic, before we realized how widespread covid was, when no-one was wearing protective equipment.

I am not denying that covid is awful for the people who do get really sick or for the families of the people who die, just as it is awful for the families of people who die of cancer, or influenza, or an opioid overdose. But the size of the response in most of the world (not including Sweden) has been totally disproportionate to the size of the threat.

Sweden ripped the metaphorical band-aid off quickly and got the epidemic over and done with in a short amount of time, while the rest of the world has chosen to try to peel the band-aid off slowly. At present that means Sweden has one of the highest total death rates in the world. But covid is over in Sweden. People have gone back to their normal lives and barely anyone is getting infected any more. I am willing to bet that the countries that have shut down completely will see rates spike when they open up. If that is the case, then there won’t have been any point in shutting down in the first place, because all those countries are going to end up with the same number of dead at the end of the day anyway. Shutting down completely in order to decrease the total number of deaths only makes sense if you are willing to stay shut down until a vaccine is available. That could take years. No country is willing to wait that long.

Covid has at present killed less than 6000 in Sweden. It is very unlikely that the number of dead will go above 7,000. An average influenza year in Sweden, 700 people die of influenza. Does that mean covid is ten times worse than influenza? No, because influenza has been around for centuries while covid is completely new. In an average influenza year most people already have some level of immunity because they’ve been infected with a similar strain previously, or because they’re vaccinated. So it is quite possible, in fact likely, that the case fatality rate for covid is the same as for influenza, or only slightly higher, and the entire difference we have seen is due to the complete lack of any immunity in the population at the start of this pandemic.

Continue reading…

From Sebastian Rushworth, here.

Hey Jews, New York Is FINISHED. OVER! What Now?

When Half Of NYC’s Tax Base Leaves And Never Comes Back

Without anyone left to pay for the city, the Big Apple is headed for a failed state.

AUGUST 18, 2020 | 4:38 PM

PETER VAN BUREN

The separateness in New York, and by extension much of the nation curled around it from America’s eastern edge, stands out. There are the hyper-wealthy and there are the multi-generational poor. They depend on each other, but with COVID who needs who more has changed.

It’s easy to stress how far apart the rich and the poor live, even though the mansions of the Upper West Side are less than a mile from the crack dealers uptown. The rich don’t ride public transportation, they don’t send their kids to public schools, they shop and dine in very different places with private security to ensure everything stays far enough apart to keep it all together.

But that misses the dependencies which until now have simply been a given in the ecosystem. The traditional view has been the rich need the poor to exploit as cheap labor—textbook economic inequality. But with COVID as the spark, the ticking bomb of economic inequality may soon go off in America’s greatest city. Things are changing and New York, and by extension America, needs to ask itself what it wants to be when it grows up.

It’s snapshot simple. The wealthy and the companies they work for pay most of the taxes. The poor consume most of the taxes through social programs. COVID is driving the wealthy and their offices out of the city. No one will be left to pay for the poor, who are stuck here, and the city will collapse in the transition. A classic failed state scenario.

New York City is home to 118 billionaires, more than any other American city. New York City is also home to nearly one million millionaires, more than any other city in the world. Among those millionaires some 8,865 are classified as “high net worth,” with more than $30 million each.

They pay the taxes. The top one percent of NYC taxpayers pay nearly 50 percent of all personal income taxes collected in New York. Personal income tax in the New York area accounts for 59 percent of all revenues. Property taxes add in more than a billion dollars a year in revenue, about half of that generated by office space.

Now for how the other half lives. Below those wealthy people in every sense of the word the city has the largest homeless population of any American metropolis, which includes 114,000 children. The number of New Yorkers living below the poverty line is larger than the population of Philadelphia, and would be the country’s 7th largest city. More than 400,000 New Yorkers reside in public housing. Another 235,000 receive rent assistance.

That all costs a lot of money. The New York City Housing Authority needs $24 billion over the next decade just for vital repairs. That’s on top of a yearly standard operating cost approaching four billion dollars. A lot of the money used to come from Washington before a multibillion-dollar decline in federal Section 9 funds. So today there is a shortfall and repairs, including lead removal, are being put off. NYC also has a $34 billion budget for public schools, many of which function as distribution points for child food aid, medical care, day care, and a range of social services.

The budget for a city as complex as New York is a mess of federal, state, and local funding sources. It can be sliced and diced many ways, but the one that matters is the starkest: the people and companies who pay for New York’s poor are leaving even as the city is already facing a $7.4 billion tax revenue hit from the initial effects of the coronavirus. The money is there; New York’s wealthiest individuals have increased their net worth by $44.9 billion during the pandemic. It’s just not here.

New York’s Governor Andrew Cuomo has seen a bit of the iceberg in the distance. He recently took to MSNBC to beg the city’s wealthy, who fled the coronavirus outbreak, to return. Cuomo said he was extremely worried about New York City if too many of the well-heeled taxpayers who fled COVID decide there is no need to move back. “They are in their Hamptons homes, or Hudson Valley or Connecticut. I talk to them literally every day. I say. ‘When are you coming back? I’ll buy you a drink. I’ll cook. But they’re not coming back right now. And you know what else they’re thinking, if I stay there, they pay a lower income tax because they don’t pay the New York City surcharge. So, that would be a bad place if we had to go there.”

Included in the surcharge are not only NYC’s notoriously high taxes. The recent repeal of the federal allowance for state and local tax deductions (SALT) costs New York’s high earners some $15 billion in additional federal taxes annually.

“They don’t want to come back to the city,” Partnership for NYC President Kathryn Wylde warned. “It’s hard to move a company… but it’s much easier for individuals to move,” she said, noting that most offices plan to allow remote work indefinitely. “It’s a big concern that we’re going to lose more of our tax base then we’ve already lost.”

While overall only five percent of residents left as of May, in the city’s very wealthiest blocks residential population decreased by 40 percent or more. The higher-earning a neighborhood is, the more likely it is to have emptied out. Even the amount of trash collected in wealthy neighborhoods has dropped, a tell-tale sign no one is home. A real estate agent told me she estimates about a third of the apartments even in my mid-range 300 unit building are empty. The ones for sale or rent attract few customers. She says it’s worse than post-9/11 because at least then the mood was “How do we get NYC back on its feet?” instead of now, when we just stand over the body and tsk tsk through our masks.

Enough New Yorkers are running toward the exits that it has shaken up the greater area’s housing market. Another real estate agent describes the frantic bidding in the nearby New Jersey suburbs as a “blood sport.” “We are seeing 20 offers on houses. We are seeing things going 30 percent over the asking price. It’s kind of insane.”

Fewer than one-tenth of Manhattan office workers came back to the workplace a month after New York gave businesses the green light to return to the buildings they ran from in March. Having had several months to notice what not paying Manhattan office rents might do for their bottom line, large companies are leaving. Conde Nast, the publishing company and majority client in the signature new World Trade Center, is moving out. Even the iconic paper The Daily News (which published the famous headline “Ford to City: Drop Dead” when New York collapsed in 1975 without a federal bailout) closed its physical newsroom to go virtual. Despite the folksy image of New York as a paradise of Mom and Pop restaurants and quaint shops, about 50 percent of those who pay most of the taxes work for large firms.

Progressive pin-up Mayor De Blasio has lost touch with his city. After years of failing to address economic inequality by simply throwing free money to the poor and limiting the ability of the police to protect them, and us, from rising crime, his COVID focus has been on shutting down schools and converting139 luxury hotels to filthy homeless shelters. Alongside AOC, he has called for higher taxes on fewer people and demanded more federal funds. As for the wealthy who have paid for his failed social justice experiments to date, he says “We don’t make decisions based on a wealthy few. Some may be fair-weathered friends, but they will be replaced by others.”

What others? The concentration of major corporations once pulled talent to the city from across the globe; if you wanted to work for JP Morgan on Wall Street, you had to live here. That’s why NYC has skyscrapers; a lot of people once needed to live and especially work in the same place. Not any more. Technology and work-at-home changes have eliminated geography.

For the super wealthy, New York once topped the global list of desirable places to live based on four factors: wealth, investment, lifestyle and future. The first meant a desire to live among other wealthy people (we know where that’s headed), investment returns on real estate (not looking great, if you can even find a buyer), lifestyle (now destroyed with bars, restaurants, shopping, museums, and theaters closed indefinitely, coupled with rising crime) and…

The future. New York pre-COVID had the highest projected GDP growth of any city. Now we’re left with the question if COVID continues to hollow out the city, who will be left to pay for New York? As one commentator said, NYC risks leading America into becoming “Brazil with Nukes,” a future of constant political and social chaos, with a ruling class content to wall itself off from the greater society’s problems.

Peter Van Buren, a 24-year State Department veteran, is the author of We Meant Well: How I Helped Lose the Battle for the Hearts and Minds of the Iraqi People, Hooper’s War: A Novel of WWII Japan, and Ghosts of Tom Joad: A Story of the 99 Percent.

From The American Conservative, here.