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"Little else is requisite to carry a state to the highest degree of opulence from the lowest barbarism, but peace, easy taxes, and a tolerable administration of justice" - Adam Smith

It’s time to end our exploitative minimum wage laws

Written by Ben Lodge | Thursday 14 June 2012

As a libertarian student, I was always opposed to minimum wage laws on the grounds that they restricted free choice and would increase unemployment. I was often told that after living in the real world for a while, I would see that a minimum wage is absolutely essential and that living below it would be exploitation. Well, since entering the ‘real world’ last year, my views on the minimum wage remain unchanged.

Firstly, exploitation is subjective. For those who are 21 years old or over, the national minimum wage is currently £6.08 – do we really believe that the moment they earn £6.07 they are being exploited? Why should it be left to government bureaucrats to arbitrarily decide what constitutes exploitation? Payment should be between the employer and employee. If the employee doesn’t like the offer being made they are free to refuse it and if they are willing to accept it, then it’s not for anybody else to label it exploitation.

It’s true that many will receive a low income under such a system. Those who are more fortunate may feel sympathy for them and have a genuine desire to help. Yet by enforcing minimum wage legislation they are in danger of hurting those very people they are intending to save. The workers in question are likely to be young and low skilled, which means an employer is unlikely to hire them if they’re forced to pay a high wage. This principle is already widely accepted and it is why the minimum wage for 16-17 year olds is just £3.68. This gives them one advantage over those who are older and better skilled.

An important factor in this debate that is often overlooked is that those earning less than the minimum wage would be gaining valuable experience and leaning new skills. The importance of this is not to be underestimated – thousands of young people in this country are willing to take on unpaid internships in order to gain these benefits.

Presumably those who believe that earning less than the minimum wage is ‘exploitation’ are also opposed to internships, on the same grounds. Yet I myself was an intern receiving ‘expenses’ that amounted to less than the national minimum wage (whilst living in London). It’s true that I had to be frugal, but it paid off as the experience has now led to full time employment. If the national minimum wage supporting do-gooders had their way, I would never have been able to move to London and I would be worse off.  Well intentioned or not, nobody else should have had the right to stop me from freely choosing to pursue that opportunity and that is why the concept of a national minimum wage is wrong.

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Rombama means more of the same

Written by Ben Lodge | Thursday 07 June 2012

Following his victory in the Texas primary last week, Mitt Romney is now effectively the candidate for the Republican Party (putting aside the issue of unbound delegates). Therefore, we can all look forward to an Obama vs. Romney showdown this November. Unfortunately, both candidates appear to agree with each other on all issues of importance.

On foreign policy, neither are concerned about following the Constitution and getting a declaration of war from Congress. Meanwhile, neither are willing to rule out a war with Iran. So whatever the outcome of the November election, America's foreign policy will be unchanged until at least 2016.

On social issues it’s difficult to compare the two, because both are prone to changing their minds. Whilst Senator Obama appeared to be quite ‘progressive’ on the issue of drugs, President Obama has been all too willing to keep the same drug laws in place that would have led to his own incarceration had he been caught smoking marijuana or using ‘a little blow’ earlier in his life. Indeed he hasn’t even been willing to defend the rights of states to allow patients to use medical marijuana.

Meanwhile, Romney’s flip-flopping on the issue of abortion is well documented. Having been pro-choice in Massachusetts, he then became pro-life during the Republican primary. Who knows what he would actually do as President? I don’t think it’s likely that he would repeal Roe v. Wade, and if not, the differences in their rhetoric on abortion means very little.

Nor is there much disagreement when it comes to anti-terror legislation. Both support The ‘Patriot’ Act (or as Ron Paul calls it, the Repeal the Fourth Amendment Act). They also both support the National Defence Authorization Act, which effectively throws the presumption of innocence out of the window, as it allows suspects to be detained indefinitely without a trial.

Both Obama and Romney supported the TARP bailouts - the biggest single transfer of wealth from the poor to the wealthy in human history. Mitt Romney is also committed to stimulus packages and quantitative easing being used to boost economic growth and employment, which are the same policies that Obama has pursued (which have failed to create growth or employment). Neither are even paying lip service to the idea of sound money or reigning in the corrupt Federal Reserve system. In short: both are corporatists, not capitalists. This is obvious to anybody who has looked at the top contributors to both campaigns – the same investment banks and other corporate interests are funding them both. The winner of the 2012 election has already been decided: it’s Goldman Sachs. Sorry taxpayers, you lose either way.

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Labour is right: It's time for Plan B

Written by Ben Lodge | Monday 28 May 2012

It’s not often that I consider the Labour Party to be right about something, but they’re spot on when they say that the coalition government’s approach to the economy is making the crisis even worse. I believe that we do need to change course and pursue a radically different approach.

Since 2010, when the government came into power, the government has followed Keynesian doctrine almost religiously. Interest rates have been kept at record lows, quantitative easing has been tried time and time again, costly vanity projects such as High Speed 2 have been defended on the grounds that they will ‘create jobs’, borrowing has increased, the debt has increased and taxes have risen. They have even considered 100-year bonds, displaying the same contempt for long-term thinking that Keynes did when he quipped that ‘in the long run, we’re all dead.’

It appears as though the government is determined repeat the mistakes of the past. A financial crisis caused by low interest rates and the artificial expansion of credit is being ‘resolved’ by keeping interest rates low and by encouraging cheap, government guaranteed loans. It’s therefore not surprising that we now find ourselves in a double dip recession.

So what should Plan B entail? If you’re part of the Labour Cabinet, it simply means these policies on steroids. They believe that more deficit financing is needed, although this would inevitably involve higher inflation, higher taxes or more borrowing – or a combination of all three. It is difficult to see how this is a credible alternative.

A truly radical alternative would involve privatising the bank of England and allowing interest rates to be determined by market forces. Meanwhile, competing currencies should be allowed in order to discourage inflation. These two policies would restore sound money to this country, which would allow a stable recovery to take place – not simply the creation of another artificial bubble (which is all it will be when we finally do ‘recover’ from this recession.)

Furthermore, no attempt should be made to ‘create’ growth or employment through increased government spending. Instead, this money should go towards tax breaks to businesses and individuals – to encourage growth in the most productive sectors of the economy rather than the sectors with the most effective lobbyists. Under these conditions, the private sector could thrive and pull us out of this double dip recession. It’s time for the government to abandon failed Keynesian economics and listen to the Austrian school economists who predicted the financial crisis before it happened.

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With drugs reformers like these, who needs prohibitionists?

Written by Ben Lodge | Friday 27 April 2012

Last weekend was the third annual conference of Students for Sensible Drug Policy UK, a student organisation that campaigns for an end to the War on Drugs. Whilst it was both an interesting and valuable experience, it highlighted the differences between libertarians and the rest of those in the drugs policy movement.

As one might expect, the conference was dominated by social democrats, who generally favoured extensive government regulation. We were told, during the first panel discussion, that the way we currently tax and regulate cigarettes was a good model for how we could control all drugs once they were legalised. Cigarette plain packaging laws were hailed as a model to emulate and America was chastised for being ‘behind’ on the issue. Americans' tendency to view advertising as a first amendment right was actually portrayed as a bad thing!

Many were sceptical of drugs being provided by the market. Instead, they argued, drugs should only be provided by the state due to their addictive qualities. When talking to Steve Rolles (of Transform Drug Policy Foundation) later that evening, he tried to persuade me that the public would never get behind the idea of drug liberalisation unless there was an almost excessive amount of regulation involved.

Now this might well be the case, and it certainly gives us in the libertarian movement something to think about. Yet what the conference largely overlooked was the moral case to be made for allowing companies to sell and advertise a legal product. There are, of course, practical considerations as well. If taxed and regulated too much, people would continue to buy drugs on the black market. Libertarians can’t sit back and let the left dominate this issue; we need to remain actively involved to keep the regulators in check.

Ultimately, however, even a heavily regulated legal market would be preferable to the status quo – and that simple fact will ensure that the alliance between libertarians and the rest of the drugs reform movement will remain strong.

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Can drug decriminalisation become mainstream?

Written by Ben Lodge | Friday 13 April 2012

The Summit of the Americas is taking place this weekend and for the first time, alternatives to drug prohibition will be under discussion. This will give Latin American leaders the opportunity to discuss alternatives to prohibition with President Obama.

Latin Americans can see the damage caused by prohibition first hand. Prohibition related violence has led to the death of over 50,000 people in Mexico since 2006. Similar stories can be found elsewhere; in Guatemala the murder rate is 42 per 100,000 people, one of the highest in the world. Some, such as President Felipe Calderon, have sent in the army to fight the cartels. This has led to a huge loss of life with no end to the violence in sight.

During his election campaign, it appeared as though Perez Molina, the current President of Guatemala, was going to go down this path. Yet once elected, he suddenly argued that the war on drugs has failed and that alternatives such as decriminalisation should be considered: "I think it is important for us to have other alternatives. We have to talk about decriminalization of the production, the transit and, of course, the consumption." – Perez Molina

This is extremely significant because it’s so rare for incumbent leaders to challenge the status quo. Ethan Nadelmann, Executive Director of the Drug Policy Alliance, believes this is part of a growing trend in Latin America: “Arguments that were articulated just five years ago primarily by intellectuals and activists, and three years ago by former presidents, are now being advanced, with growing sophistication and nuance, by current presidents. Columbian president Juan Manuel Santos and the new president of Guatemala, Perez Molina, are taking the lead. There is now, for the first time, a critical mass of support in the Americas that ensures that this burgeoning debate will no longer be suppressed.” – Ethan Nadelmann

Whilst this is indeed an exciting time to be an advocate of drug policy reform, there are still many obstacles up ahead. Vice President Joe Biden stated that there is “no possibility” of the current administration changing its drug policy. Some might be disheartened by this news, but simply being willing to discuss the issue represents a step in the right direction. For Obama to meet with Latin American leaders to discuss decriminalisation gives it a sense of legitimacy. There may be no chance of it changing the policy of the United States in the short-term, but it’s still an opportunity for the likes of Juan Santos and Perez Molina to plant some seeds in the minds of other Latin American leaders. They’ve taken the difficult first steps and it will now be easier for others to follow them. If more do follow, the American government may have to soften their stance on the issue.

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