Economics for Debate & Extemporaneous Speaking

Transcription

1 Economics for Debate & Extemporaneous Speaking Gregory Rehmke Economic Thinking AstoundingIdeasFederalCourts.blogspot.com AstoundingIdeasFreedom.blogspot.com

2 Economics: The Basics Scarcity: Not enough of everything for everyone. So... people make choices about what to consume, and education, training, and what to produce. Scarcity Choice Opportunity cost When we buy something, the true cost is the opportunity cost : our next choice on our list. In work or leisure we make similar choices Combining producers and consumers, we have: Supply and Demand of goods and services.

3 Economics, Social Order and [Your extemp/debate topic here] Reform? Economics: human action in response to scarcity. People--in families and firms--face scarcity, and make choices about what to produce and consume. Economics looks at market prices generated by the supply and demand of goods and services. Changing prices, in turn, reflect information, and influence decisions of producers and consumers. What are the rules of the game and how are they made? Just and efficient legal rules are key: Rules are decided by? Legislatures? Federal Courts? Voluntary exchange?

4 Economic Development from Holland, Scotland, England, to the World. But there s a long backstory to the Industrial Revolution...

5 What Everyone Should Know about Economics... What Every Debater and Extemper Should Know About Economics By David Beers (Revised by Gregory Rehmke, September 2011) Introduction: Why Economics? As a policy debater or extemper you are a spinner of tales. Your art is to tell a story that is reasoned, persuasive, fresh in a word, compelling. And you must ply your art better than the speakers who come before or after you in the round. The best, most believable story usually wins. To be sure, the stories you tell are of a special sort: they have a distinctive structure, sometimes involve specialized lingo, and they tend to quote an awful lot of outside sources to convince the listener that they are true. But beneath the surface every good debate or extemp speech has the hallmarks of a good tale. It introduces characters (politicians, business people, voters, etc.) who face or create some sort of conflict (in debate we sometimes call it As an extemper, you will find that economics opens up a whole range of fresh approaches to tired old questions and strengthens your personal voice. This will free you from relying exclusively on other peoples analysis and give you the capacity to evaluate media assertions with authority and clarity. Whichever event is your favorite, an understanding of a few basic economic principles will help you tell compelling, well-reasoned stories that will leave your opponents wondering, how d they do that? So where is a student or coach to turn for a practical introduction to these principles? A slim volume titled What Everyone Should Know About Economics and Prosperity by James Gwartney and Richard Stroup is a superb place to start (see for possible links to online versions of this book or for information on how to order it). Unlike many otherwise excellent introductory economics books, this one has the virtue of unsurpassed brevity. Clocking in at only a little over 100 pages, it is astonishing how much of the basic core of economics is explained. Each short chapter begins with a simple, one-sentence summary of the point to be made in that chapter. And you

6 Nation-States, Cities, and Charter Cities

7 Economic History For most people through history, liberty wasn t so much an option. Roman Empire then Feudal Europe Fernand Braudel, The Structures of Everyday Life: Famine in France... Henry Hazlitt, The Conquest of Poverty: A short history of famines... Through the 1600s, 1700s and 1800s life in Western Europe was transformed.

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9 From The Old Order to The New Order Western Europe: From social Status to Contract. From Old Order of aristocracy, militarism, and mercantilism to New Order of charter cities, contract, and commerce. From the Rights and Obligations of Serfdom and Rights of Nobles (Magna Carta), to Chartered Rights of Cities and Freeman ( City air makes free ). A year and a day in a city. Lord Acton: History is best understood as the history of liberty. The history of people emerging, or escaping, from arbitrary authority of others.

10 Medieval Trade Venice, Genoa, Hansa

11 Western Europe Economic Miracles

12 Western Europe Economic Miracles

13 Western Europe Economic Miracle Maybe competitive religions were an advantage?

14 Prosperity and Government Revenue Dramatic economic expansion in Western Europe and the U.S. leads to enthusiasms to transform the world. The U.S. gains the economic might to bring the blessings of liberty and Christianity to other countries Spanish-American War. At the same time, on the domestic front, government tax revenues, federal lands, and regulatory power transform the U.S.

15 Economies Emerging From USSR/Eastern Europe, and China,India, Southeast Asia, Africa, and Latin America

16 Triumph of the City or, Call of the Entrepreneur for Ben, the Luggage Boy Entrepreneurs in the exchange economies of cities create and coordinate economic prosperity. Around the world three hundred and fifty cities with over a million residents have joined the world economy. Opportunity draws the rural poor into these cities where they can join the global workforce. Sound legal institutions encourage honesty, savings, and self-improvement. Through the 1800s hundreds of thousands of young people were drawn from the countryside to New York City and to other American cities. Railroads lowered transportation costs to the ports of Europe in the late 1800s, and steamships lowered the Atlantic crossing. Millions of Europeans migrated to American cities, moving from where land was relatively scarce to where labor was scarce and wages higher. Millions stayed in fast expanding port cities, and millions more moved on to develop farms and populate the cities across the American west (as brought to life in the movie, book, and TV series, How the West Was Won). What was life like for the millions of migrants entering New York City s golden door in the 1800s? Horatio Alger, Jr. s many popular novels for young people drew from the actual stories told to Alger in interviews with New York City bootblacks, errand boys, and luggage smashers. Alger s novels were eagerly read by millions of Americans over the following decades. Most of us have heard of Horatio Alger rags to riches stories, but too few have actually read one. My first was Ragged Dick or Street Life in New York, a popular Horatio Alger, Jr. novel still in print. This short novel brings to life 1860s street scenes in a smaller and vibrant New York City. Written for young people, Alger's novels are engaging, realistic, fun, and fascinating. They tell stories that ring true for modern times and distant places. Success is never easy or sure, and progress depends on skills and the simple virtues of honesty, selfdenial, savings, and selfimprovement. People know each other face-to-face in rural towns and villages, and are familiar with each other s reputation and character. But daily life in the city turns on exchanges with strangers whose character and reputation are unknown. In the village, daily life turns on family members and a few dozen neighbors working with each other to produce and exchange goods, services, and favors. But in cities cash and credit are king, and markets coordinate the complex exchanges among hundreds of thousands of strangers each day. City people don t know more about the world (they usually know far less of life outside the city), but what they do know is more finely divided into skills distributed among dozens or hundreds of enterprises, factories, and industries. This deeper division of labor and wider scope of trade allows marvelously complicated operations, from the design and assembly of watches, bicycles, and buildings, to the management and operation of factories and textiles mills. The progressive power of cities driving specialization, production, and exchange lifted living standards in western Europe for centuries. But such dynamic cities never fully developed in Russia, Asia and India. Why? No easy answers, but institutional and financial restraints slowed large enterprises in the Islamic world (see Timur Kuran s book The Long Divergence: How Islamic Law Held Back the Middle East). Millions worldwide have streamed to fast-expanding cities since the fall of communism in Eastern and Southern Europe, the former USSR, China, plus the shift from socialism in India and much of Africa. Lacking economic freedom and rule of law institutions, wealth creation in cities of the developing world has been slower than it might have been. But in recent decades technology advances reducing the price of food, transportation, and clothing have partially compensated. Edward Glaeser in Triumph of the City comments that there s a lot to like about the shanty towns of the developing world. These seem terrible places for poor and homeless families and for the homeless without families but compared to what? Compared to the reality of rural poverty in the developing world, urban poverty turns out to be an improvement for most. A Manhattan Institute review claims: Even the worst cities Kinshasa, Kolkata, Lagos confer surprising benefits on the people who flock to them, including better health and more jobs than the rural areas that surround them. It is very good news for the coming decades that hundreds of millions are finding a path to prosperity that often begins by looking for work in cities. Michael Cox used this example: Page 1

17 imagine a few people dropped into a jungle, with just one having a machete. That tool, like the steam-powered technologies of Western Europe, enabled cutting a path through the jungle more quickly. But, Cox notes, when other societies find that path, they can catch up even more quickly. China, India, Brazil, and Indonesia can skip the decades of heavily polluting dark satanic mills and instead gain from advanced light industry developed by foreign capital and expertise. As the developing world is finally allowed open access to modern technologies and factories, average labor productivity increases. Agricultural workers move to better paying manufacturing jobs and from manufacturing to higher-paying service work. And back on the farm, new seeds, skills, and cell phones allows better yields to be sold at higher prices. Paul Romer's Charter Cities proposals are among the many ideas for improving cities and speeding the development process ( Hernando de Soto's Institute for Liberty and Democracy documents the how informal law develops outside state legislation and regulation. DeSoto s research pushes governments to recognize informal legal norms that facilitate exchange and investment among the poor. These issues matter because nationalist delusions confuse thinking about issues like Iraq, Libya, Syria, and Afghanistan. These are make-believe countries imagined in and left over from colonial times. It is up to tribal regions and cities within the borders of Libya and Syria to decide if they wish a future democratic nation-state called Syria and Libya to continue and what role decentralized federalism, or formal or informal alliance of regional cities might better suit. Italy and much of Eastern Europe, are less nation-states than a gathering of territories. Nationalists have long bewitched the public into believing nation-states are sources of stability and prosperity. They are as much sources of war and conflict. Congress, the Federal Reserve, and Federal regulatory agencies claim to tame and fine-tune the economy, protecting workers and consumers from predatory businesses and securing the general welfare. But how can these claims extolling the benefits of nation-states be evaluated and tested? Governments run schools where such views of state sovereignty and benefits are taught to children in civics and history classes. In speech and debate classes though, these claims are questioned and can be debated. Not states but cities are the dynamic engines of economic development. People gathering in cities create ever more gains from trade, from specialization and division of labor, and from cross-fertilizing technologies and enterprises. Successful cities don't need to be as big or a prosperous as New York City, Boston or London, but they do require economic freedom to maneuver around local officials and entrenched elites. Cities like today s Cleveland and Detroit are burdened with thousands of regulations, licensing restrictions, arbitrary taxes, and corrupt city agencies, and now lack prosperous industries generating enough wealth to cover tax and regulatory overhead. A century and a half ago, new canals and railroads added to rivers and the Great Lakes linking western cities like Cleveland to inland agriculture and natural resources.these goods cheaply floated to New York City. The Canal and river networks that connected central Ohio through Cleveland to New York City lowered transportation costs from $15 per ton per mile to just $1. Lower transportation costs quickly doubled and tripled the price of grain paid to Ohio farmers, and lowered grain prices for New York City. Cleveland s population grew from 18,000 in 1850 to nearly 93,000 by 1870 A century and a half ago, the majority in and around New York City were as poor as in any big city in today's developing world. But dynamic enterprises allowed millions a much faster escape from poverty. Compare how quickly land for new railroads could purchased and assembled across America s northeast and Great Lakes region with the long delays and intense controversies building roads, railroads, and canals now in India and most African countries. American canal and railroad construction often involved political subsidies and corruption, but they were mostly built with private capital and managed by private firms not government agencies. Bad men and dishonest businesses operate in all societies, always ready to lure and cheat the weak and unwary, and those who wish high returns for little effort. Alger's novels team with scoundrels (as does talk radio, late-night TV, and the Internet today). In exploring the wilderness and clearing land for farms, our ancestors struggled against the forces of nature. But in cities, the natural predators are thieves, swindlers, and bullies: fellow men taking short cuts to the hard-earned income of others. Young americans would do well to learn more of the many deceptions and cons that surround them, always preying on those wishing too much for too little and thinking they ve stumbled upon a special deal. Every day we hear get-rich-quick ads on talk radio, read or glance at endless scams (as we check spam folders), and we regularly hear multi-level marketing claims, stock and commodity promotions, and, of course, the misleading statements made daily by politicians. Similar tricks and deceptions were played daily in 1860s New York City, and Alger s heroes navigate through them, with readers learning these lessons at far lower cost. On the other side of the planet and a century and a half later, the Chinese movie of rural China, Not One Less, tells the touching story of a young girl teaching at a village school. The movie's realistic portrayal of rural poverty makes clear why tens of millions of Chinese migrate illegally to cities. The young teacher is warned that her promised pay will be withheld if she allows even one student to run away to the nearby city. Page 2

18 Not One Less is compelling and has a surprise at the end. Near the end, a key scene shows the runaway boy being driven back from the city and interviewed by TV reporters. They ask about city life (where he was alone and hungry before finding work clearing tables at a small restaurant): The city was wonderful, he says, smiling. Horatio Alger novels should be available in the developing world, and similar local stories should be published. Another novel, Ben, the Luggage Boy, in footnotes cites newspaper articles and interviews with orphaned, abandoned, and runaway boys whose stories are related in the novel. I expected Alger's novels to have fanciful rags to riches themes ( Horatio Alger stories ). But Alger novels are more often rags to a new suit stories. It is especially interesting how costly and important new clothes were in the mid-1800s. Textile mills were lowering prices, but new clothes were still beyond the reach of the poor. (June Arunga remarks, in Johan Norberg s documentary Globalization is Good, that until recently most Kenyans had only a couple changes of clothes, beyond their Sunday best. Cheap imports of used clothing quickly changed that, upsetting local textile firms as well as Nairobi elites who could no longer be sure who was one of them and who was merely masquerading as wellto-do by dressing elegantly.) In the third segment of the Acton Institute s Call of the Entrepreneur, Hong Kong s Jimmy Lai tells of working as a boy carrying luggage. A businessman handed him his first chocolate and told him it came from Hong Kong, which is where Lai went, becoming a Horatio Alger story and great entrepreneur. There are keys to success beyond hard work, good fortune, and good clothes. Moving up the ladder turns on the discipline and knowhow to think ahead, save and improve. Forbes has long carried B.C. Forbes advice to readers: With all thy getting, get understanding. Higher wages and cheaper food and clothing makes success today both easier to gain and to lose. Most Americans are confident they won t go hungry or homeless between jobs. But a high savings rate is just as important as it was in Alger s day. Today s work week is shorter and work so much easier physically that most Americans now have to set aside exercise time just to keep physically fit and healthy. However, success still requires struggling upward, maneuvering through bullies, scoundrels, scams, false hopes, and sure-thing investments on credit that can quickly wipe out savings and drive people deep into debt. In Ben, The Luggage Boy, a stubborn ten-year-old runs away to New York City after a fight with his father. Arriving in the city, he looks around for work and learns from other street kids how to earn enough each day, soon settling on carrying luggage. But Ben memories of his early home life and book-learning gradually fade away. He adjusts to the pleasures of life in the city, with its wide variety of distractions, from occasional cigars to gambling, and evening entertainment. Later on an incident motivates our hero to start saving and rejoin his family. Here is link for Ben, the Luggage Boy at Project Gutenberg: What does all this have to do with economic education and economic development today? Consider the numbers: New York City in 1870 was home to over one million (with another 300,000 in Brooklyn). And some 500,000 in New York City were immigrants (Stefan Jovanovich points out that at the time, before steamships dramatically lowered costs for cross-atlantic travel, most immigrants came as adults). In 2010, New York City is listed as having nearly ten million residents, and around the world 350 cities have populations over one million. None are as economically free as New York City was in 1860, but now all offer relatively cheap clothes, Internet access, and cell-phones. Increased trade, travel, and international investment, combined with new communications technologies, have opened the door for hundreds of thousands of new textile, light manufacturing, and service enterprises. Teenagers in rural India can advise grandfathers in America how to operate their cell phones and computers (U.S. regulations make it difficult for American teens to provide such services for pay). And communication costs continue to fall, opening more windows of opportunity wider for the world s urban poor. Like the many young heroes of Horatio Alger novels arriving in New York City searching of employment, millions today move to global cities looking for jobs and housing. With their eyes, ears, and minds just opening to the diverse exchange economy, many will be able to tap into the the worldwide streams of new ideas and employment opportunities. Every day around the world, enough to fill an 1860s New York City stream into cities, after endless generations of rural poverty. But too few global cities today offer a lamp of liberty to guide the huddled masses yearning to breathe free. Gregory Rehmke is program director for Economic Thinking, a program of E. Pluribus Unum Films ( and coauthor of The Complete Idiot s Guide to Global Economics. Page 3

19 Economics for Extemp Gregory Rehmke Economic Thinking In the News... Criminal Justice Reform Way too many in U.S. prisons Way too many under court supervision. Over-criminalization: way too many regulations, from drugs to eagle feathers Professional and Business Licensing and Overregulation One in four jobs (was one in twenty) Think Uber: Established companies (taxis) lobby to keep our new firms. This symposium was a series of bipartisan discussions examining the role of free speech, freedom of religion, equality and other individual rights. This event helps launch a nationwide conversation called Freedom Day held every year and hosted by the National Constitution Center. The Economics Debate Presentation One: Dueling Narratives for Economic Malaise: Deregulation and Financialization or Overregulation and Declining Economic Freedom? Presentation Two: Economic Freedom Indexes and Constitutional Restraints: Innovation vs. The Dead Hand? Presentation Three: Arrival City & Economics of Immigration

20 refugee-economics-success-of-self.html Economic Freedom: choice, entrepreneurship, innovation, invention, enterprises... Free countries become prosperous. Economic Way of Thinking: incentives and information. Next: Episode One: Economic Freedom & Quality of Life (YouTube)

21 YouTube search: Episode One: Economic Freedom & Quality of Life by EconFree dead-hand-socialism-state-ownership-arab-world The governments of Algeria, Egypt, Libya, Syria, and Yemen all operate sizeable segments of their economies in some cases accounting for more than two-thirds of the GDP. International experience suggests that private ownership tends to outperform public ownership. Law & Public Choice Economics Whether because of racism or just protection of existing businesses, special interests organize to get regulations passed. Legislatures and executive agencies are usually captured by the industries they try to regulate. Court system can (and used to) intercede to protect citizens and firms from economic regulations lacking some public health or other justification.

22 Over the past several decades, the share of U.S. workers holding an occupational license has grown sharply. When designed and implemented carefully, licensing can offer important health and safety protections to consumers, as well as benefits to workers. However, the current licensing regime in the United States also creates substantial costs, and often the requirements for obtaining a license are not in sync with the skills needed for the job. There is evidence that licensing requirements raise the price of goods and services, restrict employment opportunities, and make it more difficult for workers to take their skills across State lines. Cost of Regulations The new estimate from NAM/ Crain and Crain turns out to be $2.028 trillion annually. They break costs up into four main categories (in billions of dollars): Economic: $1,448 billion Environmental: $330 billion Occupational Safety/Heath & Homeland Security: $92 b. Tax Compliance: $159 b. The Federal Court System Federal Courts: Criminal Justice cases Overcriminalization Way too many imprisoned. Often the wrong people Unjust and expensive. rightoncrime.com Reduce/reform pre-trial detention. Jury trials rather than plea-bargaining. End mandatory minimum sentences. Reform prisons. Too many economic and regulatory crimes. The Federal Court System Federal Courts: Criminal Justice cases

23 Federal Court System Reform Ideas Reform Grand Jury (no more indicting ham sandwiches). End mandatory minimum sentences (let judges decide) Reduce pretrial detention. (unfair, convictions higher). Jury trials--not just plea bargaining--for federal court system (95% of cases now settled without juries). Alternatives to federal court justice (retribution), supplement with restorative justice. Alt. to federal prisons. Reduce or end economic or regulatory crimes. Federal Court system should protect economic freedoms based on liberty of contract. Judicial engagement. End Civil Asset Forfeiture. Federal courts to hear cases. Reducing Pretrial Detention: A Conservative Case for Court Reform Marc Levin, director of the Center for Effective Justice at the Texas Public Policy Foundation, makes case on Townhall (June 25-26, 2015), for reducing prison before trial ("pretrial detention") More than 400,000 Americans in jails today must remain there until their case is resolved, which often takes months and occasionally years /06/reducing-pretrial-detention.html The Criminalization of Everyday Life Video is a debate, with policeman speaking after law professor. Video is not critical of police behavior, but of prosecutors and over-criminalization overcriminalization/

24 Legal Memorandum #157 on Legal Issues July 9, 2015 Regulatory Crimes and the Mistake of Law Defense No one should be convicted of a crime if no reasonable person would have know [the act as illegal] the adoption of a mistake of law defense, and criminal law scholars have long argued strict liability crimes lead to conviction of persons who are, morally speaking, innocent. The Federal Court System Should Have Jury Trials Amendment VI In all criminal prosecutions, the accused shall enjoy the right to a speedy and public trial, by an impartial jury of the state and district wherein the crime shall have been committed... However, less than 5% of today s accused have reasonable opportunities for jury trials. Instead, prosecutors offer plea bargains where accused agrees to plead guity to lesser crime. In some cases, saves time and money, but gives prosecutors power to pressure guilty pleas. astoundingideasfederalcourts.blogspot.com/2015/06/jurytrials-radical-reform-forfederal.html