Bernie’s own private Denmark

There is nothing like a Dane…

(Paul Mirengoff) Whenever Bernie Sanders’s socialism comes up in the Democratic debates, he deflects criticism by saying he favors something along the lines of Denmark’s model. Sanders’s debate rivals almost invariably let this answer pass. (I think Pete Buttigieg tried to take it on in the last debate but couldn’t get the floor.) In reality, the policies Sanders advocates bear little resemblance to those of Denmark and other Scandinavian countries today .

Source: Bernie’s own private Denmark

The Consequences of Treating Electricity as a Right

In poor countries the price of electricity is low, so low that “utilities lose money on every unit of electricity that they sell.” As a result, rationing and shortages are common. Writing in the JEP, Burgess, Greenstone, Ryan and Sudarshan argue that “these shortfalls arise as a consequence of treating electricity as a right, rather than as a private good.” How can treating electricity as a right undermine the aim of universal access to reliable electricity? We argue that there are four steps. In step 1, because electricity is seen as a right, subsidies, theft, and nonpayment are widely tolerated. Bills that do not cover costs, unpaid bills, and illegal grid connections become an accepted part of the system. In step 2, electricity utilities—also known as distribution companies—lose money with each unit of electricity sold and in total lose large sums of money. Though governments provide support, at some point, budget constraints start to bind. In step 3, distribution companies have no option but to ration supply by limiting access and restricting hours of supply. In effect, distribution companies try to sell less of their product. In step 4, power supply is no longer governed by market forces. The link between payment and supply has been severed: those evading payment receive the same quality of supply as those who pay in full. The delinking of payment and supply reinforces the view described in step 1 that electricity is a right [and leads to] a low-quality, low-payment equilibrium.

Source: The Consequences of Treating Electricity as a Right

The thing is, this isn’t limited to electricity. The same process applies to any good or service, including health care.

Capitalism: Folks Doing Stuff

Although the term “capitalism” has long worked as a shorthand signifier for a market economy, there is a sense in which to use it at all is to accept the socialist’s premise that a market economy is a consciously created system, manipulated by its creators for their own material ends. But it isn’t that. A socialist economy is, by definition, a system—it must be created, planned, vigilantly monitored and forcefully regulated in order to function. But a market economy has no plan. It begins to exhibit the qualities of a system when its wealthiest actors are allowed to bend governmental policies to their advantage, but that is a vastly different thing from a system deliberately designed for stated goals from the beginning.

We will surely go on using the terms “socialism” and “nationalism” and “democracy” without knowing quite what we mean by them. We can hardly do otherwise. But at least those things exist. “Capitalism,” in the sense in which its leftist critics use the term, never did.

Wall Street Journal

The problem with the term “Capitalism” is that it was a label bestowed by opponents of capitalism, or at the very least, supporters of the planned economy alternatives. They approach the issue from the belief that the economy must be designed, and must have a designer. As a result, they bestow upon capitalism the assumption that it, too, is designed and planned.

It’s not. It’s just the result of folks doing stuff.

Quotation of the Day…

(Don Boudreaux) The principal job – certainly the first job – of the economist is to explain to the general public how economic order arises spontaneously, guided largely by market-determined prices. This job, I believe, is a high calling. Without a correct understanding of the emergence and maintenance of economic order, the typical person supposes that the economy is created and run consciously, and the only question then being whether the conscious directors of the economy are to be private parties or government leaders (with the former always acting only to promote their own narrow interests, while the latter at least have the potential to act to promote the public interest).

Source: Quotation of the Day…


A lot of people are up in arms privatizing prisons. Here’s an example where the private facilities just seem to work better.

I think some of it may be that private prisons and detention centers can be sued, while government equivalents can hide behind one form or another of sovereign immunity.

SOME OF THE BEST-RUN MEDIUM-TERM IMMIGRATION DETENTION FACILITIES ARE PRIVATE: I’ve toured both a public and a privately-run medium-term* facility ( and reported on them here ). The private one was significantly nicer. I’ve also spoken to a federal official whose job it was to inspect both types.


School Choice

West Virginia public schools receive more than $3.4 billion annually—including appropriations representing about 43 percent of the state budget. Yet most students are not proficient in the basics. Only 28 percent of public-school eighth-graders are proficient in reading, and less than one in five are proficient in math. Little wonder that despite the much-ballyhooed 90 percent public high-school graduation rate, at least one-quarter of high-school graduates need college remedial classes.

Against this backdrop, opposition to education savings account (ESA) programs makes about as much sense as telling people to stick with rotary phones because smart phones are too novel. The “untested” claim makes even less sense given the evidence from programs that inspired ESAs.

Voucher and tax-credit scholarship programs have existed since 1990 and 1997, respectively. Currently, there are about 50 of these programs in place helping more than 450,000 students in 27 states, Washington, D.C., and Puerto Rico. ESAs represent next-gen education choice by helping parents pay for numerous approved education expenses besides tuition, such as tutoring, special education therapies, online courses, and testing fees. Arizona enacted the first program in 2011. Today, about 19,000 students in five states have access to ESAs.

Like all forms of education choice, ESAs are based on the principle that parents (not bureaucrats) know best when it comes to their children’s education.

Fully 78 percent of the 18 studies conducted over the past two decades show improved test scores for scholarship students, according to the pro-charter, ESA nonprofit EdChoice. What’s more, a just-released study from the Urban Institute finds that, compared to their public-school peers, scholarship students are up to 20 percent more likely to earn bachelor’s degrees.

Public-school students who don’t participate in choice scholarship programs also benefit.

Ninety-four percent of the 34 studies examining the impact of scholarship programs on public-school students’ test scores found they improved.

Then there are charter schools, tuition-free public schools following the same testing and admissions requirements as district public schools, which have operated for nearly 30 years. Currently, 3.2 million students, mostly minorities and from low-income families, attend 7,000 charter schools in the United States.

Charter schools positively affect student achievement for less money according to the preponderance of scientific research, including meta-analyses and multi-state studies by researchers from the University of Arkansas, University of California, San Diego, Harvard, Stanford and the RAND Corporation. Want to know how charter schools can work in the real world? Consider Arizona, which has had them for 25 years.

Arizona has the highest concentration of charter students nationwide, 19 percent. About 20 percent of its charters are alternative schools, enrolling dropout, homeless and over-aged students. Despite serving higher percentages of disadvantaged students and receiving around $950 less per pupil than district public schools, Arizona charter students outperform their district peers on the state test across grade levels and subjects regardless of their backgrounds.

Arizona charter students also lead the nation in fourth- and eighth-grade math gains on the National Assessment of Educational Progress (NAEP)—beating powerhouse states like Massachusetts, which have less challenging student populations and spend nearly twice as much per pupil. As for Arizona charter high schools, they dominate US News’ annual national rankings.

Research has long shown that district public schools facing competition for students have higher achievement gains than those not facing competition. Arizona district public schools prove it by outperforming the national averages in terms of NAEP achievement gains across grades and subjects.

Parents don’t need to be bombarded with research to know what education is best for their children. Hopefully, parents find it reassuring that the empirical evidence supports their freedom to choose. Thus, the only question left is just how many more generations of students do lawmakers plan on sacrificing to the status quo before they put the real experts back in charge?

The Independent Institute

The Case for Capitalism

Presidential candidates and the media keep telling people “it’s immoral” that a few rich people have so much more money than everyone else. They talk as if it doesn’t matter what the rich did to get the money. Instead, the fact that they are rich is itself immoral.


Capitalism’s critics imply that rich industrialists “took” money from others—as if the world’s wealth is one pie. If Amazon founder Jeff Bezos takes a big piece, then the rest of us have less.

But that’s not how life works. Bezos got rich by baking thousands of new pies. He created new wealth.

Source: The Case for Capitalism

The Profit Motive vs. Socialized Medicine: A Blast from the Past

You (that’s you personally, whoever you might be) have access to far more in the way of medical treatment and medications because companies like Dow and Lilly were allowed to make money than if we had followed some ivory tower “good of society” model.

At my age, I take quite a few medications. More than half of them are “$4 generics” at my local Kroger, that’s $4 flat without insurance, and that’s medicines that didn’t even exist when I was a boy, medicines that only exist because companies like Lilly and Dow have been profitable places for people to invest money, have paid high salaries to attract some scary smart researchers and technicians to develop these new medicines and treatments.

Without these newer medicines I would be limited to the medicines my parents and grandparents had, medicines that were less effective, or with more and more severe side effects.  Thanks, but no.

Companies, with a profit motive developed smaller and less expensive X-Ray units.  Because of this my doctor has one in his office.  When I have an impact or joint injury I can get an X-Ray right there–immediately–without needing to go to the ER or scheduling an appointment with a hospital radiology department.  Less expensive and quicker diagnosis.

The same profit motive led to the development of portable EKG machines which my doctor also keeps in his office.  My annual exam includes an EKG every time.  Should I start to develop heart problems early diagnosis means early treatment with much better chances for my continued breathing. (I’m in favor of breathing and would like to continue doing it.) [Edit, 2017:  As of my last exam that had changed.  New regulation.  Ne government regulations, had required the insurance to no longer cover EKG’s as part of the annual exam.  Now they’re only covered after some heart problem is indicated.  Thus, thanks to the interference of government “helping” with health care, I am at more risk and the use of diagnostic tools that might save my life is delayed.]

The same profit motive led to the CAT scan unit being right there in my local hospital after my last auto accident. (Rear ended by a Tahoe while I was leaning forward to change stations on the radio putting me at about the worst possible posture for a whiplash injury.)  They’re everywhere.  They’re everywhere because people with profit motive made them available.

The same profit motive led to improvements in glucometers so I can quickly and reliably check my blood sugar with less pain and fuss than my mother did a scant two decades ago.

I could go on and on.

And if I can’t afford the latest and greatest? Well, I didn’t have it before either so I can’t really complain that much. And if only the latest and greatest can save my life and I don’t have it? Well, sucks to be me in that case, I guess. But although I may not have it, my daughter will. After all, yesterday’s “latest and greatest” is today’s “cheap and ubiquitous”.  But hamstring the Lillys and Dows of the world by undercutting profit and going to some Marxist “according to his need” (which is what that “they are necessities” amounts to) and she won’t.

Writer in Black: Profit Motive vs Socialized Medicine

The Empirical Reality of the Minimum Wage (Donald J. Boudreaux)

From the American Institute for Economic Research:

The Current Consensus

So what, really, is the state of modern empirical research into minimum wages? Let’s start with an unambiguous statement: Paul Krugman is factually mistaken. Plenty of recent evidence indicates that raising the minimum wage costs jobs. As long-time minimum-wage researcher David Neumark concluded in a December 2015 article for the Federal Reserve Bank of San Francisco:

Coupled with critiques of the [econometric] methods that generate little evidence of job loss, the overall body of recent evidence suggests that the most credible conclusion is a higher minimum wage results in some job loss for the least-skilled workers — with possibly larger adverse effects than earlier research suggested.


My own extensive reading of minimum-wage research confirms Neumark’s conclusion.

That said, it is also the case that quite a few, although not a majority, of the empirical studies of minimum-wage hikes find no evidence that these hikes destroy jobs. What explains these conflicting research results?

One reason for these inconsistent conclusions is simply the differences in skill and meticulousness that separate some researchers from others. Economic studies vary greatly in quality and reliability. Not every piece of published work by Ph.D. economists is trustworthy. Far from it.

But even after excluding all shoddily done studies of minimum wages, we’re still left with conflict in the conclusions. Fortunately, economic theory itself supplies clues as to why.

Clue #1: While the destruction of jobs for some low-wage workers is the banner prediction elementary economics makes about minimum wages, it’s not the only prediction. Employers and workers can adjust to minimum-wage hikes in other ways. For example, the value of fringe benefits can be reduced, as when restaurants no longer let their employees eat free of charge and when retailers stop offering their merchandise to employees at discount prices.

Similarly, employers can work their low-wage employees harder or become less tolerant of these employees’ showing up for work late, leaving work early, or texting and making personal phone calls while on company time.

To the extent that employers and employees adjust to hikes in minimum wages in these ways, the incentive for employers to reduce the number of low-wage workers they employ is muted. Hence the number of workers cast into unemployment by minimum-wage hikes is diminished.

Clue #2: Employers can adjust to higher minimum wages not only by reducing the number of low-skilled workers they employ, but by reducing the number of hours they employ each of these workers. Indeed, because minimum-wage legislation is written in terms of hourly wages, the most precise description of the banner prediction that elementary economics makes about minimum wages is that these legislative mandates reduce the number of hours of low-skilled labor that employers wish to hire (rather than the number of such workers themselves).

Therefore, empirical studies that count the number of workers employed, rather than the number of hours workers work, count the wrong variable. While it’s true that the most obvious way, and often the easiest way, for employers to reduce the number of hours of labor they employ is to employ fewer workers, empirical studies that find that minimum wages cause no reduction in the number of people employed do nothing to cast doubt on the elementary case against minimum wages because an alternative way is to employ the same number of workers but at fewer hours.

Even if no workers lose jobs because of minimum wages, minimum wages harm these workers if some of them are thereby unable to work as many hours as they would work absent minimum wages.

Clue #3: Employers in countries in which minimum wages have existed for many years have adjusted their business plans not only to the existence of minimum wages, but also to the likelihood that minimum wages will rise. In the United States, the current national minimum wage was first imposed in 1938 by the Fair Labor Standards Act. Starting off at $0.25 per hour, it has since been raised 22 times, an average of once every 44 months. This minimum wage is now $7.25 per hour.

Because this minimum wage has been around, without pause, for 80 years, because it is routinely increased, and because there is no realistic prospect of its being repealed, employers make their business plans accordingly. No firm today in the United States uses a production process as heavily reliant on low-skilled workers as some of these processes would be absent a minimum wage. Knowing of the existence both of the minimum wage and of the likelihood that it will be raised in the not-too-distant future, employers use more labor-saving machinery and fewer low-skilled workers than they would use otherwise.

So it’s no surprise that some researchers fail to detect any resulting decrease in employment whenever the minimum wage is increased. The negative employment effects of the minimum wage were already built into the structure of the American economy. Indeed, when this undeniably correct prediction of economics is understood, it is not too much to say that the most surprising fact about the many modern empirical studies of minimum wages is that any of them find that hikes in minimum wages continue to have statistically significant negative employment effects.

Despite some commentary to the contrary, empirical studies of the employment effects of minimum wages do not come close to proving that minimum wages don’t harm many of the people most minimum-wage supporters wish to help: low-skilled workers.