Rent-Seeking: a Primer by Sanford Ikeda

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Rent-Seeking: a Primer by Sanford Ikeda ON LIBERTY November 2003 Vol. 53, No. 10 FEATURES 8 The Economics of Spam by Christopher Westley 10 Business Under German Inflation by Ludwig von Mises 14 Healers Under Siege by Doug Bandow 19 Understanding "Austrian" Economics, Part 2 by Henry Hazlitt 24 Rent-Seeking: A Primer by Sanford Ikeda 29 Grutter v. Bollinger: A Constitutional Embarrassment by George C. Leef 33 Global Warming: Extreme Weather or Extreme Prejudice? by Christopher Lingle 37 The Fallacies of Distributism by Thomas E. Woods, Jr. 4 FROM the PRESIDENT—-The Great German Inflation by Richard M. Ebeling «««« 17 THOUGHTS on FREEDOM—Oblivious to the Obvious by Donald J. Boudreaux 27 PERIPATETICS—Canute's Courtiers Were Wrong by Sheldon Richman 35 OUR ECONOMIC PAST— How the Federal Government Got into the Ocean-Shipping Business by Robert Higgs 47 THE PURSUIT of HAPPINESS—-People Before Profits by Walter E. Williams DEPA RT/V\ E NTS 2 Perspective—Weighing In by Sheldon Richman 6 Massive Foreign Aid Is the Solution to Africa's Ills? It Just Ain't So! by William Thomas 42 Book Reviews Adam Smith's Marketplace of Life by James R. Otteson, reviewed by Robert Batemarco; The Great Tax Wars: Lincoln to Wilson—The Fierce Battles over Money and Power that Transformed the Nation by Steven R. Weisman, reviewed by Burton W. Folsom, Jr.; Pieces of Eight by Edwin Vieira, Jr., reviewed by George C. Leef; Terrorism and Tyranny: Trampling Freedom, Justice, and Peace to Rid the World of Evil by James Bovard, reviewed by Richard M. Ebeling. Published by The Foundation for Economic Education IDEAS Irvington-on-Hudson, NY 10533 Phone: (800) 960-4FEE; (914) 591-7230 PERSPECTIVE ON LIBERTY Fax: (914) 591-8910; E-mail: [email protected] FEE Home Page: www.fee.org Weighing In President: Richard M. Ebeling Last spring the Arkansas legislature passed Editor: Sheldon Richman a law requiring schools to compute each stu­ Managing Editor: Beth A. Hoffman dent's body mass (using the Body Mass Index, BMI) and record it on report cards. Editor Emeritus Paul L. Poirot The BMI generates a number based on a per­ Book Review Editor son's height and weight, and is supposed to George C. Leef indicate something about one's health. How­ Columnists ever, it's been criticized for not distinguish­ Charles W. Baird Robert Higgs ing between fat and muscle. A few years ago Donald J. Boudreaux Lawrence W. Reed Stephen Davies Russell Roberts the government revised the index, and 30 Burton W. Folsom, Jr. Thomas Szasz million people woke up overweight. Accord­ Walte. Williams ing to the Center for Consumer Freedom Contributing Editors (www.consumerfreedom.com/game_fatchart Doug Bandow Dwight R. Lee .cfm), the new BMI has these people as over­ Norman Barry Wendy McElroy Peter J. Boettke Tibor R. Machan weight or obese: Sylvester Stallone, Arnold James Bovard Andrew P. Morriss Schwarzenegger, Bruce Willis, Michael Jor­ Thomas J. DiLorenzo Ronald Nash Joseph S. Fulda Edmund A. Opitz dan, and me (5 feet, 7 inches, and 158 Bettina Bien Greaves James L. Payne pounds). John Hospers William H. Peterson Raymond J. Keating Jane S. Shaw For Ideas on Liberty the issue, of course, is Daniel B. Klein Richard H. Timberlake Lawrence H. White not the questionable validity of the BMI; it's the propriety of a law requiring agents of the Foundation for Economic Education state, government teachers, to keep track of Board of Trustees, 2003-2004 the body mass of students who are com­ David Humphreys Paige K. Moore Chairman Secretary pelled to attend school. Frederick C. Foote Dan Grossman At FEE it's our policy not to tell the gov­ Vice Chairman Treasurer ernment how to run its schools. We just think no one should be forced to attend or Henry M. Bonner Jane M. Orient, M.D. pay for them. Nevertheless, the Arkansas law Lloyd Buchanan Tom G. Palmer Walter LeCroy Andrea Millen Rich is instructive. Education historians have long Roy Marden Sally von Behren known that government did not get into edu­ Kris A. Mauren Guillermo M. Yeatts cation because the private sector couldn't handle it. The education market was vibrant Ideas on Liberty (formerly The Freeman: Ideas on Liberty) is pub­ lished by The Foundation for Economic Education, Inc., Irvington- and accessible to rich and poor in the days on-Hudson, NY 10533. FEE, established in 1946 by Leonard E. before "public education." Government got Read, is a non-political, educational champion of private property, the free market, and limited government. FEE is classified as a 26 USC itself involved because it was the obvious 501(c)(3) tax-exempt organization. way to conduct grand social engineering. Copyright © 2003 by The Foundation for Economic Education. Permission is granted to reprint any article in this issue, provided The American architects of the Prussian- credit is given and two copies of the reprinted material are sent to inspired "common school" promised to cre­ FEE. The costs of Foundation projects and services are met through ate a new and improved society—to eradi­ donations, which are invited in any amount. Donors of $39.00 or cate crime and sin—by replacing the more receive a subscription to Ideas on Liberty. For delivery outside the United States: $54.00 to Canada; $64.00 to all other countries. influence of vicious, slothful parents with Student subscriptions are $10.00 for the nine-month academic year; that of enlightened state-trained educators. $5.00 per semester. Additional copies of this issue of Ideas on Liberty are $4.00 each. Physical fitness was part of the program, Bound volumes of The Freeman and Ideas on Liberty are available along with a curriculum of social studies that from The Foundarion for calendar years 1972 to 2001. The magazine is available in microform from University Microfilms, 300 N. Zeeb portrays expanding government power as Rd., Ann Arbor, MI 48106. benign and the voluntary sphere as ever threatening. 2 This matter confirms another warning of one thinks of Ludwig von Mises, the great those (notably Thomas Szasz) who see dan­ theorist and an adviser to FEE founder ger in the union of health and state. "We are Leonard E. Read. In the second installment facing a crisis in this country and in of a classic reprint, legendary economic jour­ Arkansas with obesity," State Senator Sue nalist Henry Hazlitt explores the contribu­ Madison said. "I realize this is seeming like tions of Mises and later generations of Aus­ a huge invasion of privacy but there is a con­ trian writers. cern because of the health crisis and to some The term "rent-seeking" is often used in extent that crisis will be [borne] by the tax­ discussions of public policy from a free- payers in the future." market perspective. Sanford Ikeda con­ Everyone who believes that government tributes a primer on subject. can pay for medical care without serious The U.S. Supreme Court had handed down consequences for liberty can now take stock. landmark decisions on affirmative action at All kinds of restrictions on our freedom and state colleges and universities. George Leef privacy—and all impositions on our chil­ provides a tour of the court's reasoning. dren—can be defended as ways to save the Even though little is known about what taxpayers money. Fiscal responsibility has causes climate change, an awful lot of people been enlisted in the cause of statism and col­ "know" what to do about it. Christopher lectivism. That was the rationalization for Lingle advises caution. the states' suits against the tobacco industry. A group of critics of laissez faire called It will be used to justify suits against fast- themselves "distributists." Concerned with food restaurants and who knows what else? the insecurities in the marketplace, they The moral: there is no innocuous use of offered a philosophy with some surface aggressive force. appeal. Thomas Woods goes beneath the surface. Columns this month: Richard Ebeling Spam may be okay for breakfast, but few looks back at the German hyperinflation. people want it flowing into their computers Robert Higgs examines the federal govern­ all day. Must we look to government to save ment's venture into the shipping industry. us? No, says Christopher Westley. Donald Boudreaux looks at population fal­ Ludwig von Mises, in a 1946 reprint, ana­ lacies. Walter Williams praises the social role lyzes the effect of the Great German Inflation of profit. And William Thomas, hearing the on business. argument that Africa's future depends on For some strange reason, the people who handouts from wealthy Americans, replies, make life-saving drugs are under assault. "It Just Ain't So!" Doug Bandow asks us to consider what This month's book reviewers meditate on things would be like without the pharma­ Adam Smith, the income tax, money, and ceutical companies. the war on terrorism. When one thinks of Austrian economics —SHELDON RICHMAN 3 ftp** ^C3^ Cl'il^ni ^Ez^* ft f M dZ."ft ^C2z^jr*ni Cl' by Richard M. Ebeling IDEAS ON LIBERTY NOVEMBER 2003 The Great German Inflation ighty years ago this month, on Novem­ During the four years of war, from 1914 ber 15, 1923, the Great German Infla­ to 1918, the total quantity of paper money tion came to an end when the monetary created for government and private-sector printing presses were finally shut down. spending went from 2.37 billion to 33.11 EThe German people had gone through nine billion marks. By an index of wholesale years of ever-greater monetary expansion, prices (with 1913 equal to 100), prices had ever-more soaring prices, the financial increased more than 245 percent (prices failed destruction of much of the society's middle to increase far more due to wartime con­ class, a massive misdirection and squander­ trols).
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