Pizza for pesos!

Pizza Patrón has announced their intention to continue accepting the Mexican Peso at their stores. Good for them! I'm sure they are making a lot of money off of this service. Good for them! Unless somebody was using force to affect the transaction (for example, by pointing a gun at someone, or passing a law requiring authorities to point a gun at someone), such voluntary transactions mean that people were served, and society, on balance, advances. In general, they will prosper in proportion to the value of the service they provide.

One reason people want to restrict immigration is because of security concerns. It's true that right now we are at great risk from people sneaking in to the country who might desire to harm us. We certainly need some diligence. But private property is a better way to resolve this. I don't let people on to my property unless I trust them. If we all followed the same policy, we'd be a lot safer than we are now. All of us would be on the lookout for dangerous or suspicious individuals. But unfortunately we have this "we are in this together" mindset about so much that "we" do. This mindset is just another name for socialism. We've socialized large portions of the land of this country, including land along the borders, and we've socialized the service of defending that land. The result of socialism is always that resources are misallocated.

Another reason people want to restrict immigration is to "protect American jobs." But this is a wrong position to take. There's nothing better about Americans than other people. It's not moral to use American guns to protect American jobs, period. Besides, America's economy would be better served if we allow the free market to make things more efficient. More efficient generally means lower costs, which generally means some people are going to have to find another line of work. Again, this is better for all of us.

People are also concerned about immigration because of our government's policy of giving so many free handouts. These handouts generally go even to illegal immigrants, and they consist of resources stolen from other people. Obviously these handouts are sinful and harmful, but as Walter Williams is fond of saying, "That's a problem of socialism, not a problem of freedom." In other words, if your socialism means you need to restrict my freedom, the real solution is that your socialism needs to be eliminated, not that my freedom should be curtailed.

God's immigration policy to Israel was amazingly broad: "You shall not oppress a stranger, since you yourselves know the feelings of a stranger, for you also were strangers in the land of Egypt." (Exodus 23:9) Over and over again the same sentiment is expressed. If somebody comes in, they are allowed to stay, unless they are stealing and harming people. Most of the thievery in our nation is committed by the government, not immigrants.

Prohibiting people from immigrating amounts to a sinful theft of property rights: you are denying people the freedom to do what they will with their own property, which is to decide who is and is not allowed on it. It's sinful. It's also economically harmful.

More on Pizza Patrón tomorrow.

Shared items

Sorry my posting has been light this week. I've lost a lot of sleep, and that makes it hard to turn one's mind toward writing early in the morning sometimes. Hopefully this weekend I will get well-rested and resume the normal pace. :)

In the meantime, you might like to check out my Google Reader shared items page, which mostly consists of articles on political theory, liberty, and other related topics that I've found interesting. If you use a feed aggregator/news reader software like Google Reader or bloglines, you can even subscribe to the feed from my shared items and have them delivered to you as soon as I add them. I like this system where I can easily click a button that gives something I find interesting to lots of people who may also like it.

The Laffer curve

If you've listened to conservative talk radio, you've heard about the concept of the Laffer curve, although you might not have heard that name mentioned. The Laffer curve is a hypothetical concept about what happens when you change the tax rate. At a tax rate of zero, the government obviously gets zero dollars in taxes. As you raise the tax rate, as a percentage of people's income, the amount of revenue the government gets rises.

But as you raise the tax rate, you are also chewing away at people's incomes. The total income of the people gradually diminishes. As a result, taking a percentage of their income is less and less effective: for each percentage rise in tax rate, you get more tax revenue, but this is increasingly offset by the fact that there is less total income to take (as the very result of your taxes). Eventually you reach a point where the rise in taxes attacks the people's income so much that increasing the tax rate actually decreases your total revenue. You've gotten to the point where you're "better off" lowering the tax rate, because you'll then increase people's income so much you'll get more tax revenue even though the rate is lower. As you raise the tax rate all the way to 100%, eventually you'd get zero revenue: if you take all the people's money, they won't have any income at all, and they won't be able to invest it or use it to buy gas to get to work. Therefore they won't make any money, and even with a 100% tax rate, the government coffers will be empty.

I don't know if anybody's ever "proved" the Laffer curve concept, but it makes intuitive sense. Any tax is an economic disincentive on the people's income, and eventually it seems like this effect should begin to outweigh the amount of tax revenue you take in.

Conservative radio trumpets this concept all the time, although they don't often fully explain it. Conservative radio hosts seem convinced that we are perpetually on the top side of the Laffer curve, that we are always at a point where cutting tax rates will spur the economy and generate more revenue (while benefitting everybody in the process). They constantly cite successes in the Reagan and/or Bush administrations of instances where cutting taxes actually brought in more tax revenue. This is the triumph they say proves the concept, and they boldly declare that cutting taxes will always bring us more tax revenue, and is therefore always the right thing to do. (Of course, since I believe it's sinful to tax and harmful to tax, I'm glad to hear them proclaiming this.) I don't know if some of these conservatives just don't know about the lower end of the curve, or just think it's a safe bet given our exorbitant taxation that we are on the upper end of the curve, have been for a long time, and have little hope of getting out of it in the future.

Meanwhile, I don't know if liberals just don't believe in the Laffer curve concept, or believe we're in the lower end of the curve. (Or just aren't capable of the reasoning involved in the concept.)

But regardless, my perspective is that the Laffer curve is a big mistake in the first place. Not because it isn't true; it makes perfect sense to me. What I question about the Laffer curve is the whole goal involved: maximizing government revenue. Sure, if you're goal is to get as many dollars into the government as possible, then it makes sense to use this curve to try to maximize that. But that's not my goal. My goal is to a) do what's right, and b) do what's best. What's right and what's best is to not steal. Taxation is wrong, and it harms the economy. And increasing the size, scope, and budget of government is wrong (insofar as government engages in activities other than defending the rights of its citizens, and it certainly does!). So why do I want the government to have more dollars? And why in the world would I think that doing a little damage to the economy is okay as long as it's offset by getting enough dollars to the government to spend? That's not success; that's a tragedy!

A far better goal than "maximize government revenue" (so you can maximize government spending) is "maximize the productivity of the economy." When you have this goal, you produce as many goods and services as possible, and people's needs and wants are best served. Want to help the poor? Aside from charity, one of the best things you can do for them is support dismantling all the government institutions that interfere in the economy that is supposed to be serving them. Wal-Mart has done far, far more to help the poor than all the government institutions in the history of the United States combined; because of Wal-Mart, the poor can get what they really need: cheap groceries. And the free market could help them still more if it wasn't hampered by government regulation. The theory goes that government should only take an action when the benefits outweigh the costs. But the fact is that when it comes to government interference, whether by taxation or regulation, the costs always outweight the benefits. Therefore, the government shouldn't take action. And Christians certainly shouldn't support these damaging and sinful interventions!

If you took the Laffer curve concept and plotted against some measure of economic output, like GDP, rather than government revenue, you'd see not a curve, but a straight line. Plummeting straight down. It would be obvious that every increase in tax rate results in less prosperity for everyone. And if your goal was to maximize economic prosperity, it'd be obvious what tax rate to set: ZERO.