Libertarian Book Reviews

Policy Analysis

The Inclusive Economy

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If you are like me you already have some strong opinions about poverty. And by “strong” I don’t mean your opinions are particularly loud or obnoxious, but that they are deeply-seated and fundamental to how you see the world. You might think of poverty as being a structural problem, stemming from from systemic racism and sexism. You might think it is a cultural problem, caused, in part, from fatherless homes and substance abuse. You might see it as a moral failing. You might see it as a predictable outcome of a process of globalization and consolidation in industry. These, and several other theories of poverty, arise repeatedly in contemporary debate.

Michael Tanner, Senior Fellow at the Cato Institute, does us a great service by dedicating the first half of his book, The Inclusive Economy: How to Bring Wealth to America’s Poor, to a deep dive into the various historical and contemporary views on poverty. He brings data to bear on the question and essentially demonstrates that each of the various theories are incomplete or ineffective from a policy perspective. He certainly challenged some deep-seated views I’ve held on the subject, and for that I am grateful.

The second half of the book is a detailed articulation of Tanner’s policy recommendations. Tanner rejects the pessimistic view that poverty is inescapable, that the only policy discussion worth having is how to design an efficient program for redistribution. Observing that, “The best thing that government can do now, therefore, is to stop doing all the bad things it currently does,” he proposes libertarian reforms in five basic areas: criminal justice, education, zoning and land use, impediments to savings, and taxes/regulations, showing how each one would help the poor. It is a compelling argument.

As mentioned before, this is not an breezy read. If you are like me, you’ll put it down and ponder what you’ve read for a while, as your preconceptions are challenged. But it is an important book, one worth reading, and one I hope more policy-makers read as well.

The Case Against Socialism

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There are several classic books that make the case for individual freedom over the collectivist state. Friedman’s Capitalism and Freedom, Hayek’s The Road to Serfdom, and Mises’s Liberalism come to mind. But for all the virtues they have, with the commanding sweep of their vision and their penetrating social analysis, the reader of today often struggles in understanding the argument due to the reliance on examples that today are dated, even obscure. The reader of 2019 reads these classics for their evergreen ideas, but often ends up baffled by discussions of 19th century English politicians, New Deal legislation, the Bretton Woods currency system, or Nixon-era price controls.

Against this background, Rand Paul’s new book, The Case Against Socialism, is a most welcome addition to the literature of freedom. He does not innovate—not need he—on the fundamental arguments in favor of liberty. Instead, Sen. Paul does an admirable job refreshing the argument for a reader of today, with 39 short, conversational chapters discussing topics such as Venezuela, Scandinavia, authoritarianism, economic inequality, climate alarmism and fake news.

The text is organized into six parts, containing 39 short, conversational chapters. The text is well-documented, with hundreds of footnotes citing sources, many of which I’ve copied down for further exploration.

This is a good, easy read, one I recommend heartily. It is the right argument, at the right time.

Overcharged: Why Americans Pay Too Much for Health Care

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I must confess.  I’m not a frequent reader of Cato Institute publications.  Many of them come off as overly-wonkish, Chamber of Commerce-approved reports.   But I had heard good things about Charles Silver’s and David A. Hyman’s new book, Overcharged: Why Americans Pay Too Much for Health Care, and decided to give it a good cover-to-cover read.   I’m glad I did.

It is easy to get angry reading this book.  I’m sure my blood pressure increased a few points as they went through their litany of examples of fraud, waste and abuse, across both public (Medicare, Medicaid ) and private insurance systems.  But it is an argument that must be made and that everyone should hear: Our system of 3rd party payers desensitizes healthcare consumers to costs and encourages over-consumption.  This is encouraged by political control over the public programs, which is captured by the healthcare industry, to maximize the amount of taxpayers dollars transferred to this sector.  The end result is the overly-costly system we have today.  It is working by design.

The solution?  The authors propose a range of approaches, from the Singaporean model of mandatory personal health savings accounts topped of by government contributions for the poor, a system of “prizes” for new drug development instead of patents, spurring market-based competition from private hospitals and clinics , domestic and international (the Surgery Center of Oklahoma and the Narayana Health Hospital in Bangalore both get props), and in general, focusing more on 1st party, individual spending for routine and predictable medical expenses, from band-aids to pregnancies,  reserving 3rd party insurance for truly unforeseen catastrophic cases.

Of course, the authors drive home the point that the “medicare for all” option, being discussed in some circles today, would just double down on failure.   I’d highly recommend this book for anyone who wants to win the argument the next time their Facebook friends spout off about the supposed virtues of such an expansion.

One last thing — The book, aside from the importance of the argument it makes, is a damn good read as well.  It is well-organized, keeps a good pace, the examples are vivid and memorable, and in general, it keeps the reader’s attention.

Capitalism and Freedom

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When Milton Friedman’s Capitalism and Freedom came out in 1962, his was a rare voice defending classical liberal values and the free enterprise system.  For years his ideas were unloved in ruling circles, as the leviathan unleashed by F.D.R.’s  New Deal pressed its tentacles even further into the flesh of American society through Johnson’s Great Society and beyond.

But after nearly a generation wandering in the wilderness, Friedman lived to see the vindication of his ideas, as big government solutions repeatedly failed, and free market approaches out-performed.

The fall of the Soviet Union and communism in Eastern Europe should have sealed the argument.  But bad ideas never truly die.  They merely go dormant.  The anti-liberal contagion awaits the day to entice and poison new audiences, in new generations, with the false promise of heaven on earth, for the price of their soul and their freedom.

A major source of objection to a free economy is precisely that it does this task so well.  It gives people what they want instead of what a particular group thinks they ought to want. Underlying most arguments against the free market is a lack of belief in freedom itself.

The fascinating thing is how far ahead of his time Friedman was in 1962, and also how advanced his thinking remains, even for today.

Among the things Friedman proposed were: school vouchers to replace public school funding, elimination of agricultural price support programs, elimination of all tariffs and trade restrictions, repeal of rent control and minimum wage laws, elimination of Social Security, repeal of occupational licensure laws, ending military conscription, privatizing national parks and public toll roads,  reeling in the Federal Reserve System to remove discretionary powers (he’d essentially have it run on auto-pilot), eliminate foreign economic aid,  balance the federal budget, on average, year to year, elimination of public funding for state colleges and vocational/professional training, allowing equity-based investment (pay a percentage of future earnings) for college education, elimination of anti-discrimination laws, fair employment, fair housing laws, anti-segregation laws, application of antitrust laws to labor unions and other government-granted monopolies,  elimination of corporate income tax (but have tax on retained corporate earnings for individual income tax returns), a flat individual income tax rate, rejection of “social responsibility” instead of profit as the primary duty of corporate officials, elimination of estate taxes,  a negative income tax to replace other forms of welfare (in a way, similar to a UBI), etc.

It is amazing how much of these items has already been accomplished or are at the forefront of debate today, nearly 60 years later.

I’d recommend reading (or re-reading) Capitalism and Freedom to anyone interested in girding themselves for mental strife, to do battle with the modern opponents of freedom, whether they are Facebook friends, or college professors.  Friedman’s mastery of the economic matters (he won the Nobel Prize in Economics in 1976) and his gift for explaining his arguments in a non-technical, but rigorous fashion, is unparalleled.