The Lighthouse^®

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The Lighthouse^® is the weekly email newsletter of the Independent Institute.
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Volume 17, Issue 12: March 24, 2015

1. The Independent Review—Spring 2015 Issue Now Available (eSubscriptions, Too!)
2. Fossil Fuel Divestment Activists Could Slow Transition to Cleaner Energy
3. A New Freedom Oasis in Africa?
4. Israel Climbs Ladder of Economic Freedom and Prosperity
5. New Blog Posts
6. Selected News Alerts

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We’re delighted to announce the publication of the Spring 2015 issue of The Independent Review, our quarterly journal designed to stimulate your mind and broaden your horizons. This issue features a symposium on basic-income guarantees. Should existing government transfer payments be replaced with a minimum cash handout? Before plunging into the debate, read co-editor Michael Munger’s introduction to the symposium to better understand the topic’s history and scope, and the general conclusions of our contributors.

Other topics in the spring edition include: Anglo-American historians’ use of the slang term “Nazi” for all things related to Hitler’s Germany, instead of the official term “National Socialist”; the attempt to base libertarianism on the philosophical framework of welfare-state theoretician John Rawls; how economists should sell the idea of free-market prices even during natural disasters; and Robert and Elizabeth Bernard Higgs’s insights on the role of compassion in creating and keeping a free society.

As always, The Independent Review is filled with penetrating book reviews. Check out Michael Munger on Glenn Greenwald’s book about Edward Snowden and the NSA; James W. Ely Jr. on Richard Epstein’s new book about the philosophical underpinnings the U.S. Constitution; Philip R. P. Coelho on the political origins of banking crises; Ilya Somin on the rise of the imperial presidency; and Daniel D’Amico on gang governance and social order in America’s prisons.

The Independent Review (Spring 2015)

Get your e-subscription or print subscription today! (Print subscription includes FREE book.)

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A growing number of students and faculty on college campuses are pressuring universities to stop investing in fossil-fuel companies and to sell current holdings. Targeted schools include Dartmouth, Georgetown, MIT, Stanford, Harvard, the University of California, and the University of Pennsylvania, among others. But according to Independent Institute Research Director William F. Shughart II, the divestment movement could actually slow the transition to less-polluting energy.

Universities are on the cutting edge of research and technological innovation to reduce greenhouse-gas emissions. Shughart notes that investment returns help “fund academics, operations, pensions, research, and scholarships. This is where divestment activists allow ideology to get in the way of practicality.” Universities invest about $22 billion of their assets in energy and natural resource companies, about 5 percent of university endowments. These investments have yielded strong earnings available to fund environmental research.

While divestment might make proponents happy, Shughart argues that, if done on a large scale, divestment could “reduce the amount of money universities have to finance serious environmental research” and thereby slow development of cost-effective alternatives to fossil fuels.

Activists Could Limit College Earnings, Research, by William F. Shughart II (The Philadelphia Inquirer, 3/19/15)

Taxing Choice: The Predatory Politics of Fiscal Discrimination, edited by William F. Shughart II

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Imagine you can start a country from scratch. What legal system would you choose? What businesses would you hope to attract? These are questions facing Jeremiah Heaton, who traveled from Virginia to Africa last summer to claim a patch of arid desert so his seven-year-old daughter Emily could be a real princess. Assuming that Mr. Heaton achieves sovereignty over the land—admittedly a long shot—Independent Institute Senior Fellow Lawrence J. McQuillan says Mr. Heaton would best serve Africa by turning the area into a sanctuary for economic freedom.

The area claimed by Mr. Heaton is called Bir Tawil, 800 square miles of unpopulated land along the southern border of Egypt and the northern border of Sudan that neither country has claimed for more than 100 years. McQuillan argues that Mr. Heaton “should do something that’s unusual in that part of the world: establish a country that abides by the rule of law, and protects private property rights and the freedom to trade. If he were to do this, and if he could secure the area from outside incursions, he could create an economic sanctuary that would rival any in the world.”

Hong Kong was once a cluster of rocks and Dubai was once a sandy desert. Today they are two of the wealthiest places on earth because they embraced English common law and global trade, attracting private capital and entrepreneurs and lifting countless others out of crushing poverty. Africa desperately needs this more than anywhere with nearly half its population living on less than $1.25 per day.

Mr. Heaton’s goal is to transform Bir Tawil into a “test bed” for scientific research on food security, renewable energy, digital commerce, and digital currencies. This journey that started with a little girl’s dream is still that, but dreams can come true.

How to Create a Kingdom of Freedom, by Lawrence J. McQuillan (The Washington Times, 3/20/15)

Making Poor Nations Rich: Entrepreneurship and the Process of Economic Development, edited by Benjamin W. Powell

The Quest for a New Land of the Free, by Mary L. G. Theroux (Forbes, 2/18/14)

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For much of its recent history, Israel was a quasi-socialist society with a centrally managed economy with mediocre performance, despite its highly educated and highly skilled workforce. But the winds of change brought a new political economy, and with it a higher level of economic performance, according to Independent Institute Senior Fellow John C. Goodman.

“In recent years Israel has become a center for entrepreneurship, innovation and capitalist spirit,” Goodman writes in Forbes. “Israel’s transformation to a market economy was led by government efforts to sell off state-owned companies, deregulate markets, and reduce state spending.”

How significant is this change? Quite. Over the past five years, Israel’s move toward private property and deregulation has pushed it into the ranks of the “mostly free,” according to a recent index of economic freedom. It is by no means among the freest economics—it ranks as the 33rd freest—but its improvements promise widespread economic benefits throughout the population. Goodman continues, “Here is what everyone needs to understand about free markets and people at the bottom of the income ladder: capitalism is really good for poor people.”

Real Issue in the Israeli Election: Free Enterprise John C. Goodman (Forbes, 3/19/15)

Lessons from the Poor: Triumph of the Entrepreneurial Spirit, edited by Alvaro Vargas Llosa

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From The Beacon:

From MyGovCost News & Blog:

You can find the Independent Institute’s Spanish-language website here and blog here.

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