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The Lighthouse is the weekly email newsletter of the Independent Institute.
Subscribe now, or browse Back Issues.

Volume 11, Issue 24: June 15, 2009

  1. European Right Makes Electoral Gains
  2. The Folly of a Living Wage
  3. Which Way for U.S.-Iran Relations?
  4. Lessons of the Holocaust Museum Slaying
  5. This Week in The Beacon

1) European Right Makes Electoral Gains

Except in Greece and Slovakia, the European left suffered a resounding defeat in this month’s elections, resulting in the right controlling about 40 percent of the European Parliament, compared to the left’s 22 percent control. Judging by the party platforms, although voters did not embrace free-market policies to deal with a moribund economy, their rejection of the committed socialist parties is telling, according to Independent Institute Senior Fellow Alvaro Vargas Llosa.

“Even if many of the victorious right-wing parties have been responding like socialists to the economic recession,” writes Vargas Llosa, “the election results express mistrust in the ability of Europe’s true socialists to address the so-called failures of free enterprise.” What European voters seem to be saying, Vargas Llosa continues, is the following: “If we are going to have socialism, we would rather have it applied by leaders who don’t have much faith in it and deep down are not aiming to reverse the system.”

The electoral victories present the right with two opportunities it should take care not to squander, Vargas Llosa suggests. It should develop a principled case against corporate bailouts, and it should marginalize the right-wing xenophobes and extremists. “The danger is that the democratic right will absorb part of the extremist agenda, thereby legitimizing it,” writes Vargas Llosa. “Should it be tempted to do so, it would render Europe a grave disservice and resuscitate the catatonic socialists.”

“Europe Goes Right,” by Alvaro Vargas Llosa (6/10/09) Spanish Translation

Liberty for Latin America: How to Undo Five Hundred Years of State Oppression, by Alvaro Vargas Llosa

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

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2) The Folly of a Living Wage

A “living wage” may be coming to a town near you, but don’t expect such government-mandates to improve the lot of wage earners. Independent Institute Senior Fellow William F. Shughart II explains why in his latest op-ed.

If, for example, the city council of Jackson, Mississippi, requires city contractors to pay a “living wage” of $10.56 per hour—instead of, say, $8 per hour plus $2.56 in the form of benefits—then contractors are likely to cut the benefits they currently offer. In the case of health insurance, workers will find that it is more expensive to purchase it in the individual market than to get it through their employer.

“Economists who have studied the effects of raising the federal minimum wage find the employers respond to higher labor costs by cutting employees’ hours, by requiring them to work harder at their jobs, and by limiting overtime,” writes Shughart. “The bottom line is that government cannot give anyone a raise not justified by increases in productivity or in the market value of what they help produce.”

“U.M. Economist Cites the ‘Folly of a Living Wage,’” by William F. Shughart II (Clarion-Ledger, 6/15/09)

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

Out of Work: Unemployment and Government in Twentieth-Century America, by Lowell E. Gallaway and Richard K. Vedder

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3) Which Way for U.S.-Iran Relations?

Last week’s controversial election outcome in Iran should not deter the United States from pursuing better relations with it, according to Independent Institute Senior Fellow Ivan Eland.

“Although its elections are not perfect, Iran has been—and still is—the most democratic country in the Middle East other than Israel,” writes Eland in his latest op-ed. “The United States is embarrassed that its diabolical foe is much more democratic than its autocratic and repressive allies of Saudi Arabia and Egypt.”

Eland notes that Washington and Tehran have worked together in an attempt to stabilize Afghanistan, suggesting that both countries might find additional common interests that would be advanced by greater cooperation. “The real problem is that even though Obama wants to negotiate with Iran, he still shares Bush’s unrealistic concept of where he wants Iran to go,” continues Eland. “In short, the United States could get along better with Iran—no matter who is president in the United States or Iran—if U.S. expectations for change in Iran were more realistic and the U.S. government’s threat perceptions of Iran were diminished through rational thought.”

“Better Relations with Iran Require Change in U.S. Thinking and Policy,” by Ivan Eland (6/15/09)

Partitioning for Peace: An Exit Strategy for Iraq, by Ivan Eland

Recarving Rushmore: Ranking the Presidents on Peace, Prosperity, and Liberty, by Ivan Eland

The Empire Has No Clothes: U.S. Foreign Policy Exposed, by Ivan Eland

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4) Lessons of the Holocaust Museum Slaying

James von Brunn’s brutal slaying of Stephen Johns, a security guard at the Holocaust Museum in Washington, D.C., has rekindled debate over the validity of a report issued by the Homeland Security Department, warning about a rise in “right-wing extremism.” Unfortunately, the term “right-wing” is notoriously vague: it would seem to include both violent racists eager to oppress racial and religious minorities (“by any means necessary,” one is tempted to add), and peaceful individualists who oppose violations of natural rights.

In his latest article, Anthony Gregory, a research analyst with the Independent Institute’s Center on Peace & Liberty, examines the poison of the latter group—racist collectivism—as well as the antidote: a principled individualism that respects the natural rights of everyone to live peacefully and which therefore seeks to reduce the harm done by the state.

“If any political lesson is to be taken from the shooting on Wednesday, it is not that those concerned with protecting individual liberty and limiting government are the problem in our society,” writes Gregory. Rather, the lesson is that “the way to actually prevent such attitudes from gaining ground is to hold up the opposing ethic of individual rights, dignity and respect,” he continues. “The only way to make sure such madness never translates into nationwide or global horrors is to keep political power constrained.”

“James W. Von Brunn and the Poison of Racist Collectivism,” by Anthony Gregory (6/15/09)

Race and Liberty: The Essential Reader, edited by Jonathan Bean (July 2009)

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5) This Week in The Beacon

If you haven’t done so yet, please be sure to check out the past week’s offerings from the Independent Institute’s blog, The Beacon.

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