Tag: privatization

Fannie Mae and Freddie Mac Take on the Free Market

Michael Hoffman | United States

The privatization of Fannie Mae and Freddie Mac seems to be on the U.S. Treasury and Trump administration’s agenda, and with everyone predicting that a recession is on the horizon, it’s starting to feel like 2008 again.

From the Austrian perspective, allowing the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation to revert back to quasi-market-based institutions is optimal because it will open up competition and more realistic price discovery in terms of home financing and real estate prices (though not as much as we’d like to see).

With over 50 proposals to overhaul the real estate market, including a “smaller” role in the housing market for the Federal Housing Administration (FHA), the plan seeks to aid those who want to see housing become more affordable. Sounds good right? Not so fast. As the proverbial saying goes, be sure to read the fine print, since no one will be more affected by these potential political and economic changes than prospective American homeowners.

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If You Want to Save the Amazon Rainforest, Privatize It

Derrell McIver | @BenjaminDMyles1

The Amazon rainforest is one of the most beautiful and essential natural features on our planet. Yet, it is now in great danger as fires, raging for many weeks, threaten the “lungs” of Earth. We should be worried about the Amazon rainforest. But calls for the government to act are not the answer. If they give up ownership and privatize it, governments will provide the best way for the Amazon and other threatened natural resources to be saved. By doing so, they will introduce a beneficial profit motive. 

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Privatizing the Oceans Could End Environmental Destruction

Indri Schaelicke | @ISchaelicke

The year is 2031. A year has passed since the UN’s deadline to save the earth from irreversible climate change was reached. Oily, sticky, pungent air sits clumped motionless in heavy clouds just 10 feet off the ground. Skyscrapers pierce through the dark heavens and continue on into nothingness. They extend infinitely into black holes of sky, only to be lost by the human eye in a sea of polluted air.

Meanwhile, all sorts of sea life are being harmed by immense islands of garbage floating aimlessly in the oceans. Death tolls of fish, birds, turtles, and sea lion are a daily scene on the news. Garbage disposal companies blatantly dump millions of pounds of trash into the oceans each day, and no one is forced to atone for their environmental sins. This is the tragedy of the commons. How do we solve it? By privatizing the oceans.

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Privatize Social Security

Garrett Summers | United States

The Federal government’s spending is out of control. The current US debt is $22 trillion and every year we add about another $1 trillion. Shrinking the size of the federal government means shrinking its power. Money is power, so decreasing the amount of money and economy the government controls should be the first place to start. Social Security is the number one expenditure of the federal government. Every year, about $1 trillion dollars of the budget goes towards Social Security. Privatizing Social Security would nearly remove the annual deficit. It would also return the power and responsibility of the individual to manage their own retirement.

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A Response to a Socialist

Joshua D. Glawson | United States

Recently, I wrote a short article critiquing Socialism and Communism. In the response section, a person responded with the following statements (errors are theirs):

“This has a few errors. Capitalism is a hypocritical ideology in its core, if everything is given to the free market, so not everyone can get an education this destroys the argument of “Eh, if you weren’t good in school, you wont be good in the future”. Your point comes about the “more wealth the rich have the better” is wrong, and misleading. There needs to be government interference for this to happen with the social programs that you hate distributing the wealth. Other wise the rich will hoard money with no restrictions and pay less to their employees since there is no interest in supporting the workers. Infact the word you support has been tried out before, in the 1800s, with massive industrial bosses monopolising industry, using child labor and abusing their power, this stems from the fact that the government didnt wish to interefere into the free market. A completely free market will unavoidably colapse into either a monoply or something else. You will also probably refuse to admit that some of the most succesful countries are once with high taxes and societies with not much economic freedom, yet the majority lives well. Compare the average life of a city dweller in the US and Norway, one has to constantly think about his medical insurance bills and if he will have enough capital to pay for his rent, while the other has a more bright life.”

I decided to take the liberty- pun intended- to respond to the typical Socialist reply, and I believe it may help you in your future debates with Statists, Socialists, and Communists. My reply is as follows: 

First, understanding what Capitalism is what it is not is imperative for discussion. Capitalism, as I am describing it, is the free and voluntary exchange of goods and services, i.e. Laissez Faire Capitalism.

The free market does, in fact, solve the establishment of education and can provide it at a reasonable price, as the competition of the marketplace is what drives up sales and profits. E.g. the oldest schools in the US are still some of the top schools in the world and were started by private and/or religious organizations. There are also several developing organizations providing free private education in the US: Free Schools | PrivateSchoolReview.com , Private School May Be Free If You Make Less Than $75,000 | PrivateSchoolReview.com , 8 Colleges Where Students Attend For Free, etc.

Additionally, when a government is coercing people to attend school, it forces education to lose its ‘value.’ A high school diploma means little-to-nothing anymore in the US because so many people have them. This has become such an issue that most employers do not actually check if someone actually has a high school diploma when they check yes in the degree box. Another important principle is that if something “good” is being forced on people, or people are being coerced to do, the good that is done is negated because something done well requires free and voluntary action, not coercion.

Laissez Faire Capitalism has NOT been tried in the US, and I am sad to say that it has not been fully implemented in any country-wide economy. What has been tried is near-Capitalism, where there are mixed economies and approaches to attempt more market freedom. What we do know is that the closer we are allowed to move towards Capitalism, the better off the majority of people are, and in the long run everyone is better off.

Monopolies come in four main categories, not just one. There are geographic monopolies, where simply due to their location almost everyone purchases from the supplier; technological monopolies are where an organization excels in technological advancements when compared to their competitors, and this gives them the  edge for monopolizing the marketplace; natural monopolies are completely free and voluntary, there just are not any direct competitors yet in the market; lastly, government monopolies are coercive powers that only exist because of government influences and protection by government with the threat of fines, prison, garnishments, removal of property, and up to death for those that dare to compete against the coercive monopoly assisted by government. This is important to distinguish, because Laissez Faire Capitalism, in its very philosophy, does not allow coercion as that is the antithesis of Justice. Furthermore, government, itself, is a coercive monopoly as it has monopolized the initiation of force and coercion.

Socialism and Communism are contradictory to Justice as they pontificate that free and voluntary exchanges between people cannot be conducted, i.e. via Laissez Faire Capitalism, while a select few of the political elite who run the Marxist government institution determines who the winners and losers are through arbitrary means. These same people will say in one sentence that [coercive] monopolies are bad, and then turn around and say government should control the marketplace. That is, by its definition, a coercive monopoly.

In response to your pointing out of child labor in the US, please note that it is a “privilege” for children to not work hard labor, not a moral stance. The nature of mankind, when born in nature, is without clothing, with little food primarily from one’s mother (hopefully), with no shelter except that of the voluntary guardian (hopefully), no weapons, inability to walk or talk, etc. We are born helpless, and our state at birth is that of extreme poverty. The US, and other European countries, moved towards not having children in the labor force for multiple reasons. One, because it was not financially necessary for everyone to have their children working because they had better-paying jobs that enabled them, primarily men, to provide for their families’ needs and some desires. Two, many of the labor laws against child labor were directed towards Blacks and other low socioeconomic minorities within the US to prevent them from gaining political and financial leverage in the US. Three, social pressure from those in society were disappointed in seeing that the significant primary provider of child labor was not the private marketplace, but in fact, government sending orphans to work in factories in order to fund their housing, staff pay, food, clothing, etc. especially for the orphans themselves. Today, there are still a number of countries that have child laborers, but they are mostly in developing countries, which points back to my original premise of the “privilege” of not needing child laborers.

As for your erroneous comparison of the US to Norway, let’s take a look at a few facts first. I will begin by stating it is very difficult and fallacious to compare these two countries. Also, there are, of course, major limitations in Norway that come along with having a major Welfare State: The Nordic Glass Ceiling . Nevertheless, Norway has an almost similar economic freedom as the US. Norway’s financial success comes mostly from the private market sells of oil. Norway’s population consists of a homogeneous society with similar ideas, views, and philosophy; whereas the US is far more diverse, and the US has a higher per capita GDP. The enjoyment of life in the US is far greater, overall, than in Norway. Additionally, Norway does not have the utopian system that you seem to be alluding to. The heterogeneous character of the US is what helps it drive forward in the world, providing a superior and diverse competitive market, especially when compared to Norway. This also prevents a true cross-comparison of the two countries, as they are not even similar- it is a false equivalence logical fallacy.


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