Quote of the Day: Capitalism Ended Slavery

Another gem from Professor Don Boudreaux, (bold highlights mine)

"Slavery was common throughout history until the age of industrial capitalism. Only then did this heinous institution disappear. Slavery was killed by capitalism because that institution puts a premium on creativity, initiative, and good judgment (which even the mightiest slave-master’s whip cannot extract from its victims), and because the ethos that gives life to capitalism – free-market liberalism – is hostile to the ownership of man by man. That the first-to-industrialize English were the first abolitionists is no coincidence.

"In North America, pressure brought by capitalism to end slavery was countered by the very agency that you praise as slaves’ liberator: government. From 17th and 18th century slave codes to the Fugitive Slave Acts of 1793 and of 1850, government in America actively deployed force on behalf of slaveholders. Without this force, slavery would never have taken root as deeply as it did in the U.S. and would have died away sooner and with less bloodshed."

Philippine Elections: In A Hypothetical Runoff Elections, Will Noynoy Aquino Still Be The Winner?

Perhaps not.

That's if we base this on Kenneth Arrow's Impossibility Theorem.

Just a reminder, in the Philippines we have a plurality and not a majority representative government, therefore, runoff elections are precluded.

Runoff elections by definition is a "two-round system (also known as the second ballot, runoff voting or ballotage) is a voting system used to elect a single winner."

In other words, if we were to pursue a majority representation, then the top two contenders, Aquino and Estrada would have to compete again in a second round of elections to secure the top spot through a majority vote.

Perhaps we can talk about more of this once the final outcome have been declared.

Anyway, what may be popular may not be the actual. Professor Don Boudreaux lucidly explains how under the "Impossibility Theorem" the outcome of the popular elections may dramatically change, under a runoff.

And when applied to Philippine national elections the outcome may be a surprise.

Here is Professor Boudreaux,

Suppose there are nine voters.

Voters 1, 2, 3, and 4 each prefer candidate A to candidate C and candidate C to candidate B. That is, each of these four voters ranks the three candidates as such: A>C>B.

Voters 5, 6, and 7 rank the candidates like this: B>C>A.

Voters 8 and 9 rank the candidates like this: C>B>A.

In the general elecation, A will receive 44.4 percent of the vote (4 of 9 votes cast); B will receive 33.3 percent of the vote (3 of 9 votes cast); and C will receive 22.2 of the vote (2 of the 9 votes cast).

[my comment- this looks somewhat like the distribution share of the still pending final count for Presidential election results- where Aquino has 40.19%, Estrada has 25.46% and Villar has 14.22% (wikipedia.org). To consider the above theory is based on 3 contenders while we have 9 contenders for the recent election!]

Because no candidate won a majority of the vote in the general election, a runoff election is held between the top two vote-getters from the general election: candidates A and B.

In the runoff election, candidate B will win 55.6 percent of the vote (5 of 9 votes cast). B will then be sworn into office, presumably as the voters’ preferred candidate.

But look more closely. Suppose that the candidate who received the fewest votes in the general election – candidate C – were to run against candidate B in a runoff election. Which of these two candidates would win? Answer: C. In such an election, C would win 66.7 percent of the vote (6 of 9 votes cast), thus trouncing candidate B! (Also note that if a runoff election were to pit C against A (the candidate who received the most votes in the general election), C would also defeat A: C would get 55.6 percent of the vote (5 of 9 votes cast) to A’s 44.4 percent (4 of 9 votes cast).

So is it correct to say that candidate B is the voters’ most-preferred candidate? Clearly not.

Nevertheless, Professor Don Boudreaux concludes, ``The point of this exercise is to make clear that describing the winner of any fair and honest election as being the ‘choice of the voters’ is fraught with potential inaccuracies."

Indeed.

Economic Freedom And Natural Disasters: Haiti's Tragic Earthquake

Professor Don Boudreaux nails it.

While media have been fixated with the devastation of the recent earthquake in Haiti, which up to this writing has now tallied some 50,000 deaths, many have attributed the destructive loss of lives to many other peripheral causes, including the absurd ("pact with the devil").

What has hardly been mentioned is WHY Haiti's impoverishment had made her disproportionately vulnerable to human life losses in such natural calamities.

From Professor Boudreaux of Cafe Hayek says it best: [all bold emphasis mine]

``The ultimate tragedy in Haiti isn’t the earthquake; it’s that country’s lack of economic freedom.

``Registering 7.0 on the Richter scale, the Haitian earthquake killed tens of thousands of people. But the quake that hit California’s Bay Area in 1989 was also of magnitude 7.0. It killed only 63 people.

``This difference is due chiefly to Americans’ greater wealth. With one of the freest economies in the world, Americans build stronger homes and buildings, and have better health-care and better search and rescue equipment. In contrast, burdened by one of the world’s least-free economies, Haitians cannot afford to build sturdy structures. Nor can they afford the health-care and emergency equipment that we take for granted here in the U.S.

``These stark facts should be a lesson for those who insist that human habitats are made more dangerous, and human lives put in greater peril, by freedom of commerce and industry."

Let me add that the Philippines should be a more worthwhile in comparison.

We suffered from an even more destructive quake in July 16, 1990 which according to wikipedia.org registered 7.8 and resulted to an estimated 1,621 deaths

The Philippines has a per capita of $920.19 (ranked 106th according to nationmaster.com) almost double that of Haiti $480.52 (ranked 126th).

And by economic freedom, the Philippines is way up the list at 104th according to Heritage Foundation, compared to Haiti's 147th spot.

In short, capital or wealth generated from economic freedom has indeed been a key factor in reducing the risks of higher casualty toll from natural calamities.

As Ludwig von Mises wrote, ``It is fashionable nowadays to pass over in silence the fact that all economic betterment depends on saving and the accumulation of capital. None of the marvelous achievements of science and technology could have been practically utilized if the capital required had not previously been made available. What prevents the economically backward nations from taking full advantage of all the Western methods of production and thereby keeps their masses poor, is not unfamiliarity with the teachings of technology but the insufficiency of their capital."