The Lighthouse


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The Lighthouse is the weekly email newsletter of the Independent Institute.
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Volume 17, Issue 32: August 18, 2015

  1. How Ludwig von Mises Explained America’s Healthcare Mess
  2. Government: The Great Job Killer
  3. In Memoriam: Robert Conquest (1917–2015)
  4. Watts and Its Tragic Legacy
  5. New Blog Posts
  6. Selected News Alerts



1) How Ludwig von Mises Explained America’s Healthcare Mess

Ludwig von Mises died in 1973 and wrote most of his books well before Barack Obama was born. Nevertheless, the unofficial dean of the Austrian school of economics provided an indispensable framework that enables us to understand, at the most fundamental level, why the president’s healthcare law has disastrous side effects—and why the U.S. healthcare system was sick even before Obamacare. In his new book, Choice: Cooperation, Enterprise, and Human Action, Independent Institute Research Fellow Robert P. Murphy explains the ongoing relevance of Mises’s unsurpassed contributions to economic theory and the analysis of public policy.

It was Mises who gave us the crucial insight that free-market prices act to coordinate and harmonize the economic plans of everyone who buys or sells goods and services, Murphy explains. The American healthcare system, however, is plagued by government policies that distort the price system. Medicare’s arbitrary fee schedule is a prime example.

Mises also explained that government intervention in the economic system creates imbalances that foster pressure for subsequent interventions. The U.S. government’s differential tax treatment of health insurance, for example, artificially stimulated the growth of the third-party payment system, which contributed to rising healthcare costs—one impetus for Obama’s overhaul of the healthcare system. Obamacare, however, imposes new regulations, mandates, and taxes that harm job growth, stifle consumer choice, and create pressure for additional interventions. Murphy writes in his concluding chapter: “Deviations from laissez-faire capitalism are self-defeating, and pushed to their logical extreme—outright socialism—only invite total war and economic chaos.”

Choice: Cooperation, Enterprise, and Human Action, by Robert P. Murphy

Choice recommended on Good Reads

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2) Government: The Great Job Killer

There’s nothing more dangerous than a business, according to Gov, the busybody antagonist of Independent Institute’s five-part video series, “Love Gove: From First Date to Mandate.” In Love Gove: Episode 2: Protection from Jobs—viewed 337,466 times on YouTube when this Lighthouse was written—Gov is all too eager to “help” his girlfriend Alexis comply with various regulations that would crush her new, one-employee business.

Love Gov is humorous, but the consequences of government overreach are not. Government-mandated occupational licensing requirements, for example, constitute a huge, sometimes insurmountable hurdle for many would-be entrepreneurs with limited time and savings. The average length of time to become a licensed barber is 415 days. To earn an interior designer license takes on average 2,190 days.

Gov is always there “to help.” Yet rather than allowing people to more easily begin a journey that could give them the American Dream, Gov too often derails any chance for success. Gov kills hope. That’s no help—and no laughing matter.

Video: Love Gov: From First Date to Mandate

More on jobs and government policy

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3) In Memoriam: Robert Conquest (1917–2015)

One of the great ironies of modern history is that the person most responsible for bringing to light the magnitude of Stalin’s terror is a man whose last name is synonymous with occupation and subjugation: Robert Conquest. In word and in deed, the world-renowned historian, who passed away on August 3 at the age of 98, was, of course, nothing like the monster he wrote about in books such as Stalin: Breaker of Nations, Stalin and the Kirov Murder, Kolyma: The Arctic Death Camps, Harvest of Sorrows: Soviet Collectivization and the Terror-Famine, and The Great Terror: A Reassessment.

Independent Institute looks at Robert Conquest (who also served as a founding member of the Board of Advisors of our quarterly, The Independent Review) with reverence and gratitude. In 1992, we hosted a national dinner in his honor, featuring presentations by Preston Martin, Czeslaw Milosz, Aaron Wildavsky, John O’Sullivan, Elena Bonner, Harry Wu, and the honoree himself (video, audio, transcript.). Conquest also penned a brilliant op-ed for the occasion, “Learning to Unlearn the Leninist Mindset”—still instructive a quarter century after the fall of the evil empire. In 2000, he published Reflections on a Ravaged Century, and he graced us once again, by speaking at our Oakland headquarters, at an event titled “Freedom, Terror, and Falsehoods: Lessons from the Twentieth Century” (video, audio, transcript).

For too long, the Western intelligentsia ignored Robert Conquest (although he had legions of fans behind the Iron Curtain, where his works circulated clandestinely). Happily, several obituaries and remembrances will help preserve his legacy. (For a sampling, see the New York Times, the Wall Street Journal, George Will, National Review, John O’Sullivan, The Economist, the Daily Beast, and the BBC magazine.) For readers of The Lighthouse, however, we thought it most fitting to close not from a eulogy, but from Conquest’s op-ed referenced above:

“It has been wisely said that the two great causes of human troubles are impatience and laziness. Intellectually, these are precisely the phenomena that produce such destructive fantasies. Ideological quick fixes for all intellectual and social problems are sought, rather than an understanding of their real complexities. The Soviet Union was a proving ground for such approaches. We in the West still have much to learn, and to unlearn, from the events in the former communist countries.”

National Dinner to Honor Robert A. Conquest (7/7/92): Announcement, Transcript, Video, Audio

Independent Policy Forum: "Freedom, Terror, and Falsehoods: Lessons from the Twentieth Century" (1/19/00): Announcement, Transcript, Video, Audio

Learning to Unlearn the Leninist Mindset, by Robert A. Conquest (Providence Journal and Bulletin, 9/22/92)

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4) Watts and Its Tragic Legacy

The Watts Riot, which broke out fifty years ago this month, was a watershed for America. The five-day melee, named after the largely African-American district in Los Angeles where it took place, was the first major riot to be televised. It was also a pivotal moment for U.S. social policy—pivotal in ways seldom recognized in the mainstream media, according to Independent Institute Research Fellow Jonathan Bean, editor of Race and Liberty in America: The Essential Reader.

Watts signaled the beginning of a “hands-off” approach to rioting adopted by law enforcement in urban America. It was also was a turning point in the (mis)diagnosis of inner-city ills. According to Bean, the riot, which was repeated across the United States until the summer of 1968, wasn’t primarily a protest against “the system.” It was an opportunistic free-for-all motivated by a desire to loot businesses. And many victims of the pillaging and destruction were black-owned businesses. Hence, as survey results of that period indicate, the riots lacked “legitimacy” in the eyes of the majority of Watts residents.

“Yet one half-century later the policy is the same: police ordered to stand down during the riots of 1992 (Los Angeles) and 2015 (Baltimore),” Bean writes. “With public criticism of police militarization, perhaps it is too much to expect civic leaders to order arrests of looters, any more than city leaders did in the past. But they can abandon the time-worn protest ideology of the 1960s. Looting is not an act of political protest. Rioters do not represent their communities. If residents had taken a vote in 1965, there would have been no looting.”

‘Burn, Baby, Burn!’: The Watts Riot 50 Years Later, by Jonathan Bean (Daily Caller, 8/11/15)

Race and Liberty in America: The Essential Reader, edited by Jonathan Bean

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5) New Blog Posts

From The Beacon:

Safe, Legal, and Rare, Part I: Safe?
Mary Theroux (8/11/15)

Price Transparency Laws Don’t Work
John R. Graham (8/13/15)

A Call to Order in the Hobbesian Jungle
Abigail Hall (8/12/15)

Obama Supports Worker Freedom?
John R. Graham (8/11/15)

From MyGovCost News & Blog:

Compound Education Waste
K. Lloyd Billingsley (8/17/15)

The United Nations of Debt
Craig Eyermann (8/15/15)

China Unloads U.S. Debt
Craig Eyermann (8/12/15)

Thanks a Billion for the Debt
K. Lloyd Billingsley (8/11/15)

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

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6) Selected News Alerts

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