Tariffs Cause Americans to Accept Inferior Deals

Suppose I decided to go back into the business of being a professor of economics specializing in economic history in the USA. Suppose further that 100 jobs are available, and 101 applicants for these jobs have been ranked by the hiring institutions. Everyone agrees that I am the worst of the lot. Each of the applicants is willing to work at the going rate.

However, before any hires can be made, the government lays a 500% tariff on the services of imported economic historians, and it turns out each of the applicants except me is a foreigner. Given the tremendous increase in the salary that would have to be paid to (superior) foreign sellers of the service, I get a hundred job offers even though I am by general agreement the worst of the bunch.

This is how tariffs work. They make superior offers less desirable for buyers by making them more costly. The result is that buyers end up with goods and services that, absent the tariff, they would not want to buy. Everyone is worse off—except me, of course. I am the sort of shoddy substitute that ends up being chosen despite my manifest inferiority for doing the job.

If directly or indirectly the government uses its power to get you to Buy American, the slogan might as well be, Buy Crap. You don’t need to put a gun to someone’s head to get him to exercise the option that in his judgment is best for him.

Continue Reading

Including the Renegade

In the last six months, I’ve found myself stuck in two separate Sermons on Inclusion.  These were public events.  Neither was branded as left-wing.  Both, however, gave the floor to speakers who explained the supreme value of making everyone feel included in the community.

In each case, my mid-sermon reaction was the same: “I don’t think I’ve ever before felt so excluded in all my life.”

Why would I react so negatively?  It’s not because I disagree with the one-sentence summary of the sermons.  Sure, be friendly to people.  Make them feel welcome.  It’s common decency.  So what’s the problem?

I’m tempted to blame the glaring hypocrisy.  It was obvious that the speakers had zero interest in making Republicans, conservatives, macho males, traditional Christians, veterans, or economists feel included.  In fact, the Sermons on Inclusion were full of thinly-veiled accusations against members of these groups.

Yet on reflection, glaring hypocrisy is too ubiquitous in life to explain why I personally felt so excluded by the Sermons on Inclusion.

The real reason I felt so excluded was that the preachers of both Sermons on Inclusion spoke as if human beings naturally value their cultural heritage.  Frankly, I usually don’t.  I don’t value my religious heritage.  My mother was Catholic, and I was raised Catholic.  But I deem the religion false and don’t care about it.  My don’t value my ethnic heritage.  My mother was Irish, my father was Jewish, but neither identity matters to me.  I don’t support Ireland or Israel… or any other country for that matter.  My parents raised me to be an American nationalist; my schools taught me about the wonders of democracy.  But in all honesty, the only institution I really believe in is business.

So what am I?  A renegade.  And I’m not alone.  Lots of people turn their backs on the religion of their birth.  Lots of people never feel – or lose interest in – their ethnic heritage.  Lots of people dissent from “their” political culture.  Cultural loyalists may call them traitors, sell-outs, self-haters, or gusanos.  Yet despite our cosmic diversity, we renegades have one thing in common: We refuse to be ruled by the circumstances of our birth.  And any sincere Sermon on Inclusion ought to acknowledge our existence and outlook.

Unfortunately, this omission is hard to correct.  Why?  Because one of the main goals of Sermons on Inclusion is to foster group pride, and the existence of renegades is an affront to group pride.  You can’t favorably discuss the assimilated Irish without tacitly snubbing people who cherish their Irish identity.  You can’t people who leave Orthodox Judaism without tacitly snubbing Orthodox Jews.  Et cetera.

But don’t Sermons on Inclusion lionize some renegades, like anti-war veterans or the transgendered?  Sure.  But since the the Sermons barely acknowledge the existence of these renegades’ groups of origin, there’s little tension.  It’s easy to welcome renegades from group X if your default is to exclude typical members of group X.

Are efforts to promote inclusion therefore self-defeating?  Not if you’re careful, because actions speak louder than words.  As I’ve argued before, the best way to make people feel included is just to be friendly and welcoming.  Sermons divide us.  Common decency brings us together.

Continue Reading

Market Always Superior to Government

Last week, a local business delivered to my home — even though I didn’t ask and it wasn’t expected.

Just to be nice and to make a good impression.

And it worked.

This reminded me of the difference between market services and government “services” and why I always prefer the market.

With a market business, if I don’t like their service I can choose to not use them. I can use a competitor or do without. They know you have a choice, so If they want to stay in business they can’t poison their customers.

If I don’t shop at a particular store, they won’t send armed employees to my door to force themselves on me. I’m not forced to send them money regularly whether or not I shop with them. I can even go into competition with them. They can’t do anything about it unless — through cronyism — they use the violence of government against me. If they take that path, they are no longer part of the market, but have joined forces with the coercive sector: the State.

With government “services” there is no real choice. No matter how bad they are, I am forced to pay — even if I never use them.

When you end up facing a surly, incompetent, entitled bureaucrat you’re forced to pay this employee regardless. Often I am compelled to use a “service” I don’t want. If I try to opt out I will be attacked by armed government employees — maybe not right away, but if I fail to comply with their escalating threats it will happen. Their employees know this and it shows.

Sometimes you’ll get a caring government employee — more common in the less coercive branches — but niceness can’t make up for the lack of choice.

Occasionally you’ll be allowed to choose a non-government alternative, but you are still forced to pay for the unwanted government option. You can use a private school, but the government will claim this doesn’t mean you can stop funding the “public” school you neither need nor want. You will pay twice.

A business in the voluntary market can’t treat customers the way government services can. Not if it wants to survive.

The market will always be superior.

The only reason people believe they need government police but not government grocery stores is that — so far — groceries aren’t distributed by government. If something as critical as food can be handled by the market, lesser jobs like policing would be a snap.

Continue Reading

In the Grain

Nobody asked but …

As has been made clear by countless libertarian sages, there are only two classes — the first seeks freedom and the second wants to intervene in that search for freedom.  I have been listening to an old set of podcasts from the Mises Institute’s The Libertarian Tradition, presented by Jeff Riggenbach. In one episode, Jeff points out that European civilization in the North American new world was founded by two distinct types of adventurer, the first sought freedom from the old order, while the second sought to impose a new order.  We Americans, as a people have been in fundamental conflict ever since.  Riggenbach says it is the instance of individualists versus the zealots.  Individualists make their own goals, take their own actions, and accept all responsibility for the consequences of those actions.  Zealots want to dictate your goals, command your actions, blame you for consequences, and blur the lines of responsibility.

Throughout the history of society, there have been struggles for the collectivization of individualists.  But in the new land that would become the USA, the battle lines were far more clearly drawn among those who would colonize America, those who would seek freedom according to individual codes against those who would create new empires modeled upon the old empires.

A libertarian/voluntaryist/individualist/anarchist always looks for the simplest rule of thumb by which to gauge the self’s deeds with regard to consistency of principle.  Let me suggest the question, am I doing a thing that is my business, or am I doing a thing that will shape somebody else’s business?

— Kilgore Forelle

Continue Reading

Be An Instigator

One of the best pieces of advice I’ve ever heard was to “be first.” Be first to say hello to a stranger, be first to volunteer, be first to take on a challenge.

This is fine advice.

The more I manage to follow it, the more I enjoy my life and see others enjoying theirs as they begin to act, too. With enough action, we can each set in motion a great deal of action in others.

There is something dangerously powerful here – so much so that the right word for the sort of person who does this is “instigator.”

The word “instigator” speaks of someone who stirs up action in others – usually of the rebellious kind. But in our world of inertia and cowardice and status quo living and thinking, isn’t all action inherently rebellious?

Instigate hard discussions, friendships, book clubs, adventures. Instigate parties, projects, businesses, repentance. Instigate revival, restoration, reinvention.

The world needs generative people that call into action the generativity of others.

Some people will find that dangerous. But if you take on the role of instigator, most people will thank you for being the person who makes them feel free to join in on the action. And there are few legacies better than that.

Originally published at JamesWalpole.com.

Continue Reading

The FDA’s Assault on Tobacco Consumers, Part 3

Early one morning last December, Jeff Gracik was heading to his southern California home garage-workshop where he makes his living when he heard a loud, hurried knock on his front door. Thinking it might be a rushed UPS driver, he quickly opened the door. But it wasn’t UPS. Standing on his doorstep were three badge-flashing inspectors from the U.S. Food and Drug Administration. They had come to inspect Jeff’s business.

Just what is Jeff’s business? Does he produce food? No. Does he produce drugs? No again. So why the unannounced visit by FDA inspectors?

Jeff makes pipes for tobacco pipe smokers. He doesn’t make tobacco, mind you, which (alas) Congress empowered the FDA to control, but pipes, most of which are made from wood (most commonly briar, but other varieties too), materials such as acrylic and vulcanized rubber for the mouthpieces, and wood stains, which Jeff buys but does not make.

In its wisdom, the FDA has deemed pipes “tobacco products,” a category of things it regulates under the Family Smoking Prevention and Tobacco Control Act (TCA) of 2009. Forgive the bureaucratese I’m about to shovel your way, but an FDA document states (pp. 257-58):

“The definition of ‘tobacco product’ … includes all components, parts, and accessories of tobacco products (except for raw materials other than tobacco used in manufacturing a component, part, or accessory of a tobacco product). FDA interprets components and parts of a tobacco product to include any assembly of materials intended or reasonably expected: 1) to alter or affect the tobacco product’s performance, composition, constituents or characteristics; or 2) to be used with or for the human consumption of a tobacco product. Both e-cigarettes and pipes meet this definition.”

You may find it odd that the FDA chooses not to regulate lighters, matches, ashtrays, humidors, and the like, but it has its reason: it deems such things to be accessories, not components and parts. Accessories, the FDA says, “do not contain tobacco, are not derived from tobacco, and do not affect or alter the performance, composition, constituents, or characteristics of a tobacco product.” Since pipes do those things, they are deemed regulated components rather than unregulated accessories.

Who knew the FDA personnel had the wisdom to make such fine distinctions?

Note the first word I emphasized a couple of paragraphs earlier: interprets. The FDA admits it has no explicit statutory authority to regulate things not made or derived from tobacco even if they can be used to consume tobacco. Did the members of Congress who wrote and voted for the TCA (which amended the FD&C) deem non-tobacco products such as wooden pipes to be tobacco products? It appears not. The legislation states that the “term ‘tobacco product’ means any product made or derived from tobacco that is intended for human consumption, including any component, part, or accessory of a tobacco product (except for raw materials other than tobacco used in manufacturing a component, part, or accessory of a tobacco product).”

The word including would seem to limit the covered components, parts, and accessories to things “made or derived from tobacco,” of which the briar root Jeff Gracik uses is not an example. Briar comes from the root of the flowering plant called Erica Arborea, or tree heath.

To reinforce my point, note that the word pipe appears in the TCA only as a qualifier for the word tobacco. The statute’s authors wanted to assure that tobacco is understood to include pipe tobacco and not just cigars and cigarettes. But the legislation contains not one single reference to pipes per se. So Congress apparently did not intend to authorize the FDA to control anything other than tobacco or things derived from it, even things that are likely to be used to consume tobacco.

But no matter. The FDA has assumed the power to deem non-A to be A. Logic and common sense be damned.

At any rate, three FDA inspectors (two of them trainees) turned up unannounced at Jeff Gracik’s door to say that they had the authority under the TCA to enter his premises — right then — and inspect his home workshop. Actually, he had “consented” to inspections once every two years when he registered with the FDA as a pipe maker. Jeff had learned earlier that under the law, retailers could not sell his pipes unless he was registered, so he allowed a retailer to register him, saving him the trouble of doing the paperwork himself. He had no choice: he earns his living as a full-time pipe maker and wants to keep doing so.

Jeff, who is 39, started making pipes in 2003. He sold his first one a year later and has since built a sterling reputation among pipe collectors. He makes 100 to 125 pipes a year — which sell for $800 to $3,000 apiece — under the name J. Alan Pipes. Jeff is an artisan; he makes pipes one at a time by hand. Each is unique, a thing of beauty, a dazzling collaboration of nature and human being. He and brother Jeremy have a second, lower-priced line of partially machine-made pipes under the name Alan Brothers.

Needless to say, Jeff was unaccustomed to having federal agents traipsing around his workshop. “I was so shocked,” he told me. He said the inspectors were friendly but firm — and apparently unsure what they were supposed to be doing. This might have been their first venture into unknown territory. (Other pipe makers are being similarly visited.) The inspectors started asking questions “most of which were not really relevant to pipe making. Things like: tell us about all the materials you use. Tell us about where they’re from. Do you have receipts for where they’re from? We need the names for all the distributors for all your materials. We need to know exactly the ingredients with which they’re treated; so, for instance, briar, how is it treated? Of course, I’m an artisan. I don’t have those kinds of records.”

That was just the beginning. “They had me demonstrate how to make a pipe. So I had to take a block of briar and chuck it in my lathe…. And as the day went on, they became more and more interested in what I was doing.” He said some of their questions suggested they were interested in the potential toxicity of materials and ingredient, but that’s as far as that went. They tested no materials or stains and took no sample with them. Jeff was not told to submit anything for approval.

The visit lasted six and a half hours, as if this small businessman had nothing better to do than entertain a group of FDA inspectors. “I got nothing done that day,” he said.

“They wanted to see written procedures,” he explained. “How do you do A to Z?” He told them that as a craftsman and unlike a factory, he has no written procedures. As the hours went by he sensed he was almost gaining sympathy from the inspectors.

Jeff said he did his best to comply with all requests, including requests for documents going back to 2006. “If they shut me down because I failed to answer a question to their satisfaction,” he said, “then my kids don’t eat and we foreclose on our house.”

For the record, the TCA states that regulations “shall not impose requirements unduly burdensome to a tobacco product manufacturer or importer, taking into account the cost of complying with such requirements and the need for the protection of the public health ….” Decide for yourself if the FDA obeys that prohibition.

The FDA and those who support government control will point out that even though pipes are not made from tobacco, they are used to consume tobacco. That’s true. But Gracik points out that some people who buy his pipes, which can be as beautiful as any work of art, are collectors who don’t smoke. (Interestingly, his grandmother’s first cousin was Andy Warhol.)

It’s hard to say how many pipe makers we have in America. People connected with the industry and hobby estimate the number of full-timers at 25 to 30, with a few hundred more who make and sell pipes part-time. Jeff is afraid that the thicket of rules could persuade many of them to “throw in the towel.” He says: “It scared the hell out of a lot of pipe makers when we found out we were under this kind of scrutiny.”

The pipe makers certainly could use a trade association to protect them. But Gracik says they are, unsurprisingly, individualists and so discussions about forming an association have gotten nowhere.

So the FDA harasses — even if it’s with a smile — small-scale artisans who scratch out livings working by hand with wood and other harmless materials. To what end? It’s all part of a larger puritanical campaign to harass peaceful Americans who enjoy consuming tobacco via cigarettes, cigars, pipes, and smokeless tobacco and using non-tobacco nicotine e-cigarettes.

“Nothing so needs reforming as other people’s habits,” Mark Twain said.

Using tobacco is not risk-free, of course, but most things in life are not risk-free. In the real world, risk can be managed and minimized but never eliminated, and in a free society, individuals have the right to decide for themselves how to go about doing it.

Continue Reading