Taxes 101: The Laffer Curve

Here is a nifty three part video series by Daniel Mitchell of the CATO Institute on how taxes influence people's behaviour, and consequently, the ramifications to the economy.

Part I: Understanding the Theory

Part 2: Reviewing the Evidence

Part 3: Policy Analysis Via Dynamic Scoring

What we'd like to show is that government spending always impact tax policies but to a diverse degree. These ultimately affects people's behavior which subsequently will be manifested on the performance of an economy and the state of capital (wealth) accumulation/consumption.

It's also very important to point out that taxes has been a highly sensitive political issue such that in certain periods of history, public uproar against taxes catalyzed revolutions.

Example, this article from Murray N. Rothbard,

"Seventeenth-century French kings and their minions did not impose an accelerating burden of absolutism without provoking grave, deep, and continuing opposition. Indeed, there were repeated rebellions by groups of peasants and nobles in France from the 1630s to the 1670s. Generally, the focus of discontent and uprising was rising taxes, as well as the losses of rights and privileges. There were also similar rebellions in Spain in mid-century, and in autocratic Russia throughout the seventeenth century."

Bottom line: Be wary and leery of politicos advocating for more government expenditures because these eventually translate to higher taxes, which translates to a lower standard of living.

Achieving Peace Via Free Trade

Many people incessantly babble about “compassion” as means of attaining peace and prosperity.

Ironically, most of them align such advocacy towards organized violence or forced redistribution (government), which produces the opposite outcome, instead of voluntary exchange.

Dr. Tom Palmer of the Atlas Economic Research Foundation, in this video “Bridges of Peace”, shows how free trade accomplishes peace.

Incidentally, representatives of Atlas Economic Foundation led by Dr. Palmer, will be in the Philippines and will hold an assembly tonight, which I will be attending. I hope it will be fruitful experience.

The Free Market Evolution of 'Chinese Food'

The amazing video below is an account by Jennifer 8 Lee of how popular Chinese Food evolved. (hat tip: Jeffrey Tucker Mises Blog)

Jennifer 8 Lee concludes with...

``So, the thing is, our historical lore because of the way we like narratives are full of vast characters, such as, you know of Howard Schultz of Starbucks, and Ray Kroc with McDonalds and ASA Chandler with Coca-Cola. But you know, it’s very easy to overlook the smaller character-oops- for example like Lem Sen, who introduced chop suey, Chef Peng, who introduced General Tso Chicken, and all the Japanese Bakers, who introduced fortune cookies. So the point of my presentation is to make you think twice, that those whose names are forgotten in history can often have had as much, if not more impact on what we eat today."

Here is Friedrich von Hayek on spontaneous order...

``Many of the greatest things man has achieved are not the result of consciously directed thought, and still less the product of a deliberately coordinated effort of many individuals, but of a process in which the individual plays a part which he can never fully understand."

Unfortunately as Jennifer 8 Lee laments, such wonderful accomplishments has hardly been appreciated.

Video: The Secret of Powers of Time

This is a terrific video on time perspective. (Hat tip: Keith Rabin)

It's about our choice in viewing life in terms of future or present/past orientation.

As RSA Animate's Philip Zimbardo concludes "It's really the most simple thing there is!"

It seems simple but it is complex because people have different time scale weightings.

Yet this video goes in true fashion with Austrian Economics, where time preference plays a key role in people's choices and thus shape distribution and consumption patterns.

Here is Ludwig von Mises on time preference... (bold highlights mine)

``Time for man is not a homogeneous substance of which only length counts. It is not a more or a less in dimension. It is an irreversible flux the fractions of which appear in different perspective according to whether they are nearer to or remoter from the instant of valuation and decision. Satisfaction of a want in the nearer future is, other things being equal, preferred to that in the farther distant future. Present goods are more valuable than future goods.

``Time preference is a categorial requisite of human action. No mode of action can be thought of in which satisfaction within a nearer period of the future is not--other things being equal--preferred to that in a later period. The very act of gratifying a desire implies that gratification at the present instant is preferred to that at a later instant. He who consumes a nonperishable good instead of postponing consumption for an indefinite later moment thereby reveals a higher valuation of present satisfaction as compared with later satisfaction. If he were not to prefer satisfaction in a nearer period of the future to that in a remoter period, he would never consume and so satisfy wants. He would always accumulate, he would never consume and enjoy. He would not consume today, but he would not consume tomorrow either, as the morrow would confront him with the same alternative."

Learning From Sweden's Free Market Renaissance

The popular impression of Sweden is that her success had brought about by big welfare government.

In the following video, the Center for Freedom and Prosperity gives a succinct economic history on how Sweden attained her wealth based on limited government, rule of law and property rights, and how Sweden's success had been stalled by the emergence of big government.

And in learning from the recent mistakes, Sweden has embarked on a reform to scale down big government. (hat tip: Cafe Hayek)

John Law, Paper Money and the Mississippi Bubble

Another very informative stuff from Mises Blog (Jeffrey Tucker).

This cartoon video shows of John Law's experiment with paper money that sparked the Mississippi bubble.

History indeed rhymes.

Econ 101: Prices, Profits, and Resource Misallocations From Interventionism

This short but insightful documentary video from Mises Blog shows of the basic functionality of profits to society- in contrast to the evil portrayal by the mainstream and politicians.