Tag: economy

Do Subscription Boxes Hurt Socialization?

Nickolas Roberson | United States

We all enjoy and love the subscription box services and products that we pay for and receive every month. Shaving products, popular culture merchandise, or even food and water; these services deliver easy-to-access, quality goods straight to our homes. However, how do these amenity providers affect our socialization?

Subscription Boxes: An Introduction

Companies provide boxes that are filled with niche products for the consumers they are targeting. These boxes are known as subscription boxes. Routinely fulfilled payments pay for the shipped goods. 

In the United States, there are an estimated 400 to 600 companies offering these subscription boxes. BlueApron (a meal kit service), Stitch fix (a personal styling service), Dollar Shave Club (a personal grooming product service), and Loot Crate (a pop culture product service) are some of the more popular services offered. This constantly innovating industry has grown from 4.7 visitors to their websites in 2014 to 41.7 million in 2018. This demonstrates increasing demand for these easy to access quality products. Additionally, a majority of the consumers of subscription boxes are 18 to 24 years old, and “prefer the convenience of online shopping.”  However, while online shopping and subscription boxes are extremely easy to purchase and are high in quality, this massive increase in popularity of them may have some negatives.

Marketplace Socialization

The physical marketplace has been the locality for much of humanity’s socialization. It’s where we learned the social skills that were vital for trading and general communication. However, the adoption of mass consumerism and the development of subscription services and boxes could harm socialization.

The vast majority of the aforementioned subscription box services are provided through online shopping. Now, this makes goods incredibly easy to access and purchase. This is tremendous, but there is no social interaction taking place. This, practiced en masse, would have a negative impact on the socialization of individuals.

New Technologies

This occurs through the immense increase in technological advancement taking place today. Cell phones read your face, voice commands control TVs, and personal computers contain alternate realities. With these new, innovative technologies and subscription boxes is a matter of time before individuals have total access to goods and services without leaving their homes. As a result, the death of socialization. 

Subscription services are an amazing product of capitalism. They provide cheaper and more convenient high-quality products. But everything in life has a tradeoff, and the loss of socialization is the tradeoff for subscription boxes.


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Germany Is Phasing Out Coal, Moving to Renewable Energy

Othman Mekhloufi | United States

A government-appointed German ‘Coal Commission’ released a recommendation to the German government on the morning of January 26th. The goals of said recommendation are to curb carbon emissions, turn to renewable energy, and take steps towards the deceleration of climate change.

The Report

The 28-member commission represents various German mining regions and utility companies. After 21 hours of negotiations, they reached a decision to fully phase out coal over a 19 year period (by 2038). This move will, in turn, shut down all 84 of Germany’s coal plants. Germany has also moved to fully shut down all of its nuclear power plants by 2022. This decision is part of another report by the commission that was legislated in 2011.  As of now, Germany shut down 12 of the 19 nuclear power plants in the nation.

The progress will be regularly reviewed by the commission in 2023, 2026, and also 2029. The goal is to find out if phasing out coal is possibly by 2035. Nonetheless, 2038 will remain the legally defined date to fully phase out coal pending German government drafting legislation based on the report.

The commission’s report is not legally binding as it still requires the action of the federal government. The report holds a set of guidelines and suggestions for the federal government to legislate accordingly in hopes of curbing climate change and CO2 emissions. German Chancellor Angela Merkel will likely approve the commissions’ proposal.

Coal in Germany

Coal plants in Germany currently account for 40% of electricity and power production. Renewable energy surpassed coal as the leading source in 2018. It now accounts for 41% of energy use. By fully phasing out coal and nuclear power, Germany aims to rely on renewable energy. Ideally, renewable energy will provide 60%-85% of Germany’s power.

Germany is currently #8 in global coal consumption, although the nation only accounts for 2% of such emissions.

The Impact

There are roughly 60,000 jobs with ties to the coal industry. Consequently, phasing out coal would put those jobs in jeopardy. There will likely be negative economic repercussions which will fall upon the companies and workers, as well as the families of workers. However, the commission allocated for $45 billion in aid to ease the economic hardships caused by their decision to end the industry. The aid includes an adjustment fund, as well as pension compensation for all employees aged 58 years or older. Younger workers out of a job will also receive aid in the form of education and training for jobs in renewable energy sources.

As we move towards the future, coal is being phased out on a global scale. Climate change is progressing. Therefore, many believe the shift towards renewable energy sources is a must.


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Are American Libertarians Inherently Consequentialists?

Atilla Sulker | United States

At the superficial level, libertarianism is split into two main camps regarding a moral doctrine. There is the old Aristotelian natural law tradition, sometimes referred to as deontological libertarianism, which draws some of the most passionate libertarians, including the likes of Ron Paul, Andrew Napolitano, Murray Rothbard, and Ayn Rand. And there is the consequentialist (often called utilitarianism) approach to libertarianism, advocated by many pillars of libertarianism including, Ludwig Von Mises, Milton Friedman, and David Friedman. The former group believes that libertarianism is valid because initiating force in any way is morally wrong. The latter on the other hand supports libertarianism simply because, in their minds, it leads to the greatest prosperity.

But the adherence to any form of libertarianism in America makes for a perplexing phenomenon. America has the greatest total wealth in the world and is the hallmark of the great machine that is capitalism. Surely there is some amount of freedom in America, despite the squabbles of libertarians. If not, the great works of entrepreneurial enterprise and competition would not be present to provide the average American with such goods as cars and electric ovens, products once classified as “luxury goods”.

Yet at the same time, the State tramples on the liberties of its citizens every minute. Wiretaps are initiated whenever the president feels like doing so. The state drafts young men to fight in territories unknown to them, showing how frugal its citizens are in its menacing eyes. Bureaucrats interfere with progressive efforts espoused by communities to take back control of their schools. Mandatory minimums tear apart families and lead to the mass incarceration of individuals who are supposedly detriments to society. Regardless of how you assess this claim from a moral standpoint, the argument could be strongly made that government in this day in age has become a far greater detriment to society than any drug lord.

Despite the mass regulations enforced by the state, the great bulwark of capitalism cannot be stymied. Sure, competition is slowly dying off and the Fed creates a false illusion of the growth of prosperity. But despite the destruction created by the Keynesian saga, prosperity still thrives to a much greater extent in America than most other nations around the world, further validating the extent of the notion that entrepreneurship drives the improvement in the material quality of our lives. Indeed the machine of entrepreneurship is far more powerful than the government. The great technological revolution of the late 20th century shows how the hindrances established by the government could not stop the glorious consequences of a market economy.

Now here’s a head-scratcher. Does an increase in the quality of goods in the market due to competition in the private sector necessarily signify an increase in liberty? Does a vibrant capitalist economy necessarily fall in line with a free world? Quite obviously not, as our country represents a good case study of this seemingly paradoxical phenomenon. But only superficially does it occur to be perplexing, for going beyond the layer of gloss shows that the situation is not that complicated.

A larger amount of wealth simply means a larger amount of capital for the state to exploit in its nefarious affairs. It means government simply has more wealth to steal and hence more wealth to fund the welfare-warfare state. This is evident with such tragedies as the growth of the military industrial complex and the bureaucratization of education. Lew Rockwell sums up this phenomenon:

In reality, the State is far more dangerous in a productive, capitalist society than it is in an impoverished, socialized society, simply because it has far more private resources to pillage and loot for the State’s own benefit. Availing itself of the vast fruits of private production, the State engages in self-aggrandizement, expansion, and, inevitably, imperialism.”

In retrospect, we see that much of the past imperialist adventures were supported through the exploiting of private capital, e.g. FDR’s redirecting of resources to support World War Two, or the rapid proliferation of nuclear arms during the Cold War. Indeed a capitalist economy could well be a catalyst for the expansion of the state. And more importantly, a desensitized public needs to be conditioned to express obedience. Think of the state as a block of sodium and the capitalist economy and obedience as a tub of water. Without the water, the sodium remains stable, but when put in the water, it becomes volatile. This is how the state works, it works parasitically- the more blood there is to suck, the bigger it becomes.

Comparing the United States to a garden variety third world country, we discover something interesting. While the former professes to be the beacon of the free world, it is so bloated and volatile that it tramples on the liberties of its people daily. The latter advertises itself as a monstrous entity that will drop the guillotine on any dissenters but is often so poor that it can’t actually enforce these codes.

Regardless of what a country’s government may proclaim itself to be, whether a slaughterer of masses or a liberator of worlds, to truly judge how free it is, we must focus on the actual situation of the country, i.e., the effectiveness of its means in realizing its desired ends.

Economic historian Robert Higgs adheres to this view, and used it to make a case for leaving the United States in search of another country. In a speech he gave, Higgs said:

If I were in your position, I would consider seriously getting out of this country, not because I think any other country is a paradise by the way. But because I think no other country has the means (emphasis added) that the government of this country has to carry out these horrifying surveillance programs, and other measures of state tyranny. So, I’m going to move. I’d suggest you might consider moving somewhere else.”

Higgs himself moved to Mexico in October of 2015.

So if one proclaims himself to be a natural rights libertarian, wouldn’t he be contradicting this assertion if he continues living in the United States? Natural rights libertarians are defenders of liberty even if it leads to economically inefficient outcomes. It would then follow that if they truly hold this to be true if they are truly the bleeding heart natural rights supporter that they claim to be, they would move to another country that does not have the means to enforce such control as our own.

I don’t believe that any libertarian can be classified as fully of the natural rights tradition or fully a consequentialist. Surely a consequentialist would become inclined to believe in some sort of natural rights if the government began to kill members of his family. He wouldn’t oppose it only on the grounds that it disturbs order and leads to disutility.

Now certain issues may invoke a more natural rights based defense. Such issues may include abortion and the defense of the second amendment. It would be hard not to be rooted in the natural law tradition to an extent, yet be an ardent supporter of the second amendment or the right to life.

Based on the actions of libertarians here in America however, on the economic front, the consequentialist doctrine trumps any belief that they may have in natural rights, not fully, but to an extent that libertarians have decided to stay here rather than follow the Higgsian vision. It would be foolish to try and sit here and say that we would defend liberty even if it didn’t lead to economically sound outcomes, yet live in a country in which the means to the destruction of liberty are far greater than most any other country in the world.

It is clear that we enjoy the fruits of entrepreneurship and capitalism as present in this country. For the American libertarian, the loss of this great prosperity in exchange for a more free lifestyle is not a convincing trade-off. Let’s face it, we all enjoy the constant new innovations in technology, in medicine, etc. We wouldn’t be willing to give up our cellular devices or our polio-free bodies in exchange for a more libertarian way of going about our lives.

America can be seen as a coin, having a free side to it, and an unfree side. As Lew Rockwell explains:By way of illustration, in the US today, we have two economies, one free and one unfree. The free one has given us the great abundance of consumer goods, the widest distribution of wealth, and the fastest pace of technological innovation known in the history of man. The unfree one—characterized by the two trillion dollar federal budget and the more than one-quarter of that spent on apparatus that builds and administers weapons of mass destruction—has produced what we have been reading about in the headlines for the last two months. Military Socialism, which exists by pillaging the free economy, is responsible for a brutal and immoral war on a civilian population halfway around the world—the destruction of hospitals, churches, nursing homes, residential neighborhoods, and town squares.”

So yes, it is the prosperity in the capitalist economy that keeps us here in this country. It is the reason why we enjoy the economic freedom present in this country. The atrocities committed by our government won’t drive us away, but the market economy keeps us latched. It thus follows that the American libertarian is inherently, to an extent, a consequentialist.


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Universal Basic Income: Ultimately Botched and Inept

By TJ Roberts | United States

The concept of a Universal Basic Income (UBI) comes up as a potential alternative to the modern welfare state. What people don’t consider, however, are the consequences of such a system. A UBI is a system in which the state provides a certain income for all people within the polity. Also known as a Negative Income Tax, a UBI requires a heavily progressive form of taxation. All adults within a polity receive this payment regardless of their wealth and their employment status.

Many proponents see UBI as a means of securing people’s basic needs. In addition, they see this as far more efficient than the current system. This, according to a UBI proponent, alters the incentives toward a more productive incentive structure in the economy. Finally, advocates of a UBI claim that it allows for people to survive after automation eliminates the job market. While on the face level, these arguments all seem to have a point, but some basic economic analysis can show that UBI is fundamentally flawed. This article will first outline the arguments one may find in favor of a UBI. It will then refute the arguments. In addition, it will offer some other problems to a UBI.

Why People Support UBI

People support UBI for many reasons. The most frequent reason that people cite is that it guarantees people a certain quality of life. To these advocates, not all individuals are capable of finding employment, so society must provide for these individuals. In addition to the unemployed, a UBI is claimed to help the underemployed. In essence, a UBI is a living wage for everyone.

Another case that some fiscal conservatives and libertarians make in favor of a UBI is that it is more efficient than the current welfare state. With a UBI, there is no massive bureaucracy to determine who needs what. You receive the same living income as every other person. This drastically lowers administrative costs.

Another case that fiscal conservatives and libertarians make is that a UBI readjusts the incentive structures of society. Since everyone is guaranteed this money with no strings attached, says the UBI advocate, there is no poverty trap that encourages people to work less so that they do not lose their payments. This means that the UBI would replace all currently existing social welfare programs and would allow for commodities such as health insurance to be handled entirely by the private market.

Finally, advocates of a UBI claim that it is the only logical means of continuing human existence in the age of automation. People fear that AI and new technology will make low-level employment obsolete, and will, therefore, knock so many people out of work that they will not be able to afford to live without a UBI.

Why the UBI is Wrong

These arguments, however, all fall when one considers economic theory and empirical reality. To start, a UBI would not adequately guarantee that everyone receives an adequate quality of life. This is because a UBI would lead to overwhelming price inflation. If everyone is guaranteed a living income, then more people will be able to consume products. Because more people can afford more goods and services, businesses will be inclined to increase prices whereas this surge in the number of willing customers is an external stimulus to the economy caused by outside intervention.

If a landlord knows that their clients are now receiving a monthly check, the landlord then has an incentive to increase rent to take advantage of the new wealth. As prices rise, people become less capable of providing for themselves, so they spend less. When people spend less, businesses will decrease production, which leads to businesses having to lay off workers. These newly unemployed workers then lose the ability to spend as much as they did when they had a job. This leads to an endless cycle of increasing prices and decreasing employment.

Inflation

To add insult to injury, since the money supply is increasing, the money becomes less capable of holding value. The value of the dollar would tank under this system. This inflationary trap would compound, ending in a society in which most people are jobless, most businesses can’t afford to produce, and those who are employed have a money that is so worthless that they cannot afford anything. Such an inflationary policy overturns all the progress the market has achieved for this world.

Right now, the needs of more people are being met than ever before around the world, and no UBI caused this. Rather, it is decreasing prices that has allowed for the cost of living to drop in such a way that extreme poverty is disappearing from this world. Our World in Data illustrates this point beautifully in this slideshow. Declining prices are benefiting the worst off especially; the countries with the highest poverty rates are currently experiencing the fastest growth rates. A UBI and the inevitable price increases that follow would only harm this progress. We need more production, not redistribution.

We Cannot Afford a UBI

In terms of efficiency, while a UBI admittedly leads to cheaper administrative costs, the nominal costs make a UBI far more expensive than the status quo. Suppose the US implemented a plan that guarantees a living salary to all adults based on the cost of living in their area. According to MIT, the average living wage in the United States is $15.12 per hour. According to the US Census Bureau, there are 247,813,910 adults living in the United States. If one does the math, the cost of providing this basic income to every adult in the United States is $7,793,648,343,936 per year (this does not account for inflation and administrative costs). This is nearly $8 trillion. Given that the US spent $4.094 trillion dollars in Fiscal Year 2018, The United States would have to end every government program and more than double taxes in order to pay for this program alone.

UBI Perpetuates Poverty

While UBI may seem to eliminate the poverty trap, this is not the case. First, consider the inflationary effects of a UBI. If prices increase so dramatically that goods become unaffordable, then poverty increases. Also, the UBI does eliminate the incentive not to work that some means-tested welfare programs do have, but it also has negative incentives of its own. UBI gives businesses an incentive to slash wages.

If everyone working for a business is guaranteed a living salary, then businesses feel empowered to slash wages and keep the profits. UBI is just another form of corporate welfare. It allows for businesses to outsource the cost of having employees to the taxpayers. This makes it more likely for people to be content with what they are receiving from their guaranteed income and not pursue work at all.

In Defense of Automation

Automation is happening. But this is a good thing. Automation does not cause unemployment. Rather, it frees people to pursue other forms of work that individuals are more passionate about. The entire purpose of work is to satisfy humanity’s endless wants and needs. Since people are still poor in this world, it is clear that there are inefficiencies in the status quo. Automation allows for labor to become far more efficient. In the same way that the strides in efficiency that humanity accomplished in the industrial revolution of the 18th and 19th centuries did not eliminate the ability of regular people to find work, so too the automation revolution of the 21st century will not eliminate the need for work. Rather, it provides even more opportunities.

This is not to say that everyone will keep the jobs that they have right now. Some people will lose their jobs as automation makes the labor more efficient. But let’s consider what happens to people who lose their jobs due to automation. First of all, no one starved to death as a result of the milkman becoming obsolete in the late 20th century. People that worked as a milkman simply found other means of employment. They adapted to their times. They moved to new jobs that met consumer demand and often made these workers more prosperous

Automation Creates Jobs

But let us consider why someone would lose their job to automation. Resources are finite, but human desires are virtually unlimited. While at the face level, someone might lose their job in one area, that is because the consumer demand is being met more easily through automated processes that decrease prices and the cost of production. Automation brings prices down. This is why the cost of living has dropped so significantly that most Americans can afford something as complex as a smartphone. If people can produce more for less, prices go down.

When prices go down, consumers spend less on what they buy. When consumers spend less, they have more money. This allows for consumers to buy even more products. Since consumers can buy more, businesses have to produce more. This means that businesses need to hire more people in order to produce. Automation does not directly cause unemployment. Rather, it makes it easier for displaced workers to find new work.

Automation Creates Entrepreneurship

Another benefit of automation is that as prices go down and people become capable of affording more, people have more resources which allows them to engage in entrepreneurship. As people develop new industries (some of these industries will come directly from automation), new employees will be needed. As technology grows, the ability to acquire the means of learning new skills that improve your standing on the job market (take Skill Share as an example of this).

Automation enriches the labor force, allows for workers to find new and better jobs, allows workers to learn how to boost their resume, and brings new innovation that will create more prosperity at a lower price which especially benefits the poor. Automation does not justify a UBI. Rather, it shows why we need to avoid a UBI by any means necessary: the price increases caused by a UBI will offset the gains in human prosperity automation is causing.

How a UBI Takes Your Power Away

The greatest harm that a UBI causes is that it rips power away from the common person in the market. In a system with a UBI, people are capable of ignoring the law of supply and demand and pursue their own interests without regard for its marketability and at the detriment of those pursuing profitable work. Once again, someone has to pay for the UBI. If person X chooses to create products that they are passionate about but no one else is willing to buy, they still get the UBI and other people are forced into subsidizing their illegitimate industry.

In a truly unhampered market, person X would realize that their entrepreneurial effort is yielding no fruit and would therefore adjust their strategy to meet consumer demand. Under a UBI, the incentive to do this greatly diminishes. This is another proof that UBI is another form of corporate welfare. There is no sense in propping up industries that consumers do not want. Doing so only encourages behavior that sucks resources away from those who have an eye for what people desire. This is theft from the market and from all of us.

The Road to Hell is Paved With Good Intentions

On the surface level, Universal Basic Income comes across as an alternative to the welfare state that would make the world a more productive and prosperous place. But when one considers basic economic theory, UBI collapses under its own weight. UBI increases prices, decreases wages, and decreases productivity. This system undos the progress we have made in eliminating world poverty and causes runaway inflation that would make the current living standard unaffordable.


This article was originally published in LIFE.

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It’s Time the United States End its Saudi Arabian Alliance

Shiam Kannan | United States

The murder of Saudi journalist Jamal Khashoggi is only one more entry in a long list of human rights abuses by the Saudi Arabian Government, which also includes their suppression of religious freedom, sponsorship of terrorism, and complicity in the ongoing humanitarian crisis in Yemen. However, Khashoggi’s murder is significant because it has brought mass attention to Saudi Arabia’s actions, and has given the United States a window through which to exit its relationship with them. Now is the time to utilize this window and end our partnership with the Saudis. Due to the Saudi Government’s involvement in some of the most abhorrent human rights violations present in the modern era, it is imperative that the United States terminate its friendship with Saudi Arabia if it wants to remain a nation looked up to by the rest of the free world.

Unfortunately, President Trump has refused to censure the Saudi government for its actions and has seemingly taken it for its word that the Crown Prince, Mohammed Bin Salman, had nothing to do with the assassination, despite the fact that the CIA has concluded that Salman had indeed ordered the killing. Essentially, Trump’s utilitarian view on foreign affairs has led to his favoring a foreign regime over our own intelligence agencies. President Trump’s cozying up to Saudi Royalty merely punctuates his view of foreign relations as business deals, rather than interactions with moral implications.

However, regardless of the Khashoggi assassination, there are many, many, other reasons why America ought to terminate its alliance with the Saudis, not least of which is the Yemeni Civil War. Over half of all the civilian deaths in Yemen have been due to Saudi airstrikes, and a recent UN report has concluded that the Saudi-led coalition in Yemen has been responsible for recruiting child soldiers, some as young as 8 years old, and even raping civilians. Saudi Arabia indiscriminately conducts bombings throughout Yemen, which have hit targets such as hospitals, funerals, and even refugee camps. And worst of all, Yemen is on its way to experiencing the “world’s worst famine in 100 years” if the Civil War continues. Saudi Arabia, in coordination with the US, is engaging in a blockade of food and supplies to Yemeni civilians. Approximately 12 to 13 million people are at risk of famine in Yemen right now, which could begin as soon as 2 to 3 months from now if the war does not end.

The airstrikes in Yemen are, for the most part, conducted using weapons purchased from the United States. Indeed, Saudi Arabia is America’s number one arms customer, as they give the US billions of dollars in exchange for laser-guided missiles and other destructive technologies. American-made bombs utilized by the Saudis have led to the deaths of many innocent people in Yemen, such as the 40 students on a school bus in Yemen which was bombed by the Saudis earlier this year. Essentially, this means that by selling the Saudis the weapons they want, which they subsequently use to murder Yemeni civilians, the US is just as complicit in their slaughter as the Saudi pilots dropping the armaments. The blood is not merely on Mohammed Bin Salman’s hands, but America’s as well unless it stops providing the Saudi Government with the tools they seek to massacre civilians in Yemen.

Despite all this, then, why is Trump so ardently supportive of the Saudis? One claim he frequently makes is that arms sales to Saudi Arabia boost American jobs in the defense industry. However the American private defense industry, which only accounts for 0.5% of the American labor force, does not rely on Saudi money; rather, its main client is the American military. Only approximately 8,000 workers in the United States make bombs, including the ones sold to Saudi Arabia, and it does not seem like their jobs are dependent on Saudi sales. Nonetheless, even if arms sales to Saudi Arabia are economically beneficial, the benefits are not worth the lives of innocent women and children on America’s conscience.

Another explanation for Trump’s warm relationship with Mohammed Bin Salman is merely the reason why America has been a Saudi ally for over 80 years: oil. Saudi Arabia has a great influence on global oil prices and thus is of great significance to American foreign policy and the US economy. But our addiction to foreign oil has clouded our moral judgment. Khashoggi’s murder should spark a moment of self-reflection at the very least: we should ask ourselves if cheaper gasoline is truly worth the betrayal of every single one of the values we seemingly espouse. We should ask ourselves if cheaper gasoline is worth the assassination of a journalist for exercising his right to a free press. We should ask ourselves if cheaper gasoline is worth the 7,000 civilians killed in Yemen since 2015. And if we reflect deeply enough, we should all be able to realize that the answer is “no.”

America has been regarded as the leader of the free world for the last century for only one reason: our values of liberty, equality, and democracy make us uniquely morally qualified to lead. We cannot maintain this moral authority so long as we remain allies with a government which openly and brazenly shows contempt for the very ideals we stand for. America’s soul should not be sold in exchange for cheap oil. Our ideals are worth more than the extra dollar at the pump, or the extra workers employed at Lockheed Martin. It’s time that we sent a loud-and-clear message to the Saudi Government that its egregious assaults on human rights, dignity, and equality will not be tolerated by the United States. Khashoggi’s murder has given us the perfect opportunity to end this relationship. It is now up to the President and Congress to do it. Let us all hope they make the moral choice.


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