Paul Romer shows how "bad rules" (price fixing, subsidies, and other gov't interventions in the market) will limit growth and progress.
Inspired by how Hong Kong has influenced China into having a more liberalized market economy, he talks about "charter cities" where we can eliminate bad rules. Its progress and benefits will eventually be so attractive that the idea of the free market will inevitably spread itself.
It is a much slower and workable transition solution. I understand what he means by being in a "trap". It is really hard to change bad rules when people are already used to it and when they already have a mentality against having less government.
It does remind of how it's the opposite of the economic "shock therapy" that Milton Friedman and the Chicago Boys used to liberalize the market of Chile in 1975. Friedman compared it to cutting a dog's tail: cut it piece by piece and it'll be more painful and harder to manage so it must be cut at one instance.
I was thinking that if something like that were to be implemented in the Philippines, I fear it could get all dirty and even violent. So I guess I'm starting to really like this charter cities idea. I am very interested in this and see how it can really work and spread pro-market reforms and ideas gradually and peacefully.
Conflict Kitchen, a take-out restaurant in Pittsburgh, serves only cuisine from countries that the United States is in conflict with.
Eating food from foreign countries can really give you an idea of what kind of culture and environment they have. It will give you an idea of their preferences and a glimpse at their traditions and practices. This is why Conflict Kitchen wants to use food to increase the awareness of people. Perhaps show them that there are real individuals, real families, real cultures, that the US are intervening with.
They have already served Iranian and Afghan cuisines. I think it is a deeply moving concept. I mean, I am actually very curious about what kinds of flavors Afghan or Iranian food will have.
I actually have a food blog where I deal with my reflections about the joys of eating. Although I haven't really updated it in a while, it does show how significant this topic is to me and how I am really admiring this restaurant concept.
There was a time when I was uncertain about non-interventionism as a foreign policy. Especially after watching a documentary about North Korea called "Welcome to North Korea" where I saw the lives of the citizens there and how their lives are controlled by bureaucrats and coercive authorities. There is no innovation, no incentive to make one's life better, no markets, no progress. It is as if only fear and propaganda exists and everyone is living a lie. You know, I feared for them and I wanted to help them. But at that time, little did I know that markets and not governments will be the only way to help them. At first glance, non-interventionism would seemingly become isolationism.
But then we have to remember that the United States have tried to intervene before with the Koreans and so with the Vietnamese and we see how history is telling us how this kind of foreign policy fails and just creates more hostility and even more complications. Through different revelations in Wikileaks, we see how their CIA has created more problems than solutions.
From my point of view, I see that allowing countries to trade freely will allow people to realize the value of capitalism and how markets create innovations. For instance, if the embargo to countries the US were in conflict with were to be ended, goods can be brought in, goods that represent innovations that are brought about by the market. Better food, better technologies, better medicine, etc. Citizens of these countries can realize the importance of markets and capitalism.
What is undeniable is that the US is about to go broke because of their foreign policy. I am not really in the mood to argue non-interventionism vs isolationism or debate about the merits of free markets to the peace and prosperity of the world. I am only writing this article to share a restaurant concept. It is thought-provoking, moving, and at the same time very appetizing. Affecting my brain, my heart, and my stomach! All in one! :)
I got locked out of my house the other day. Little did I know that this will be a great opportunity for me to learn more about basic economics and the US recession.
I was lucky enough to read Peter Schiff's book How an Economy Grows and Why it Crashes. Peter Schiff is known for predicting the crash of the U.S. economy and was the economic advisor of Ron Paul during the 2008 elections.
I was expecting a long and tedious lecture about the true causes of the US recession and the misconceptions and myths in Keynesian doctrines. To my surprise, the story actually starts out with three guys Able, Baker, and Charlie. The characters are living in an island and have to catch fish in order to survive. The story then evolves to a more complex society as the market allowed innovations and as people traded and migrated. Eventually it becomes much like how our world is today.
Able, Baker, and Charlie looking for fish.
The use of illustrations and allegory can be a really effective way of making people, even those not interested in economics or politics, understand the basic concepts that make people like me believe in free markets and limited-government. It does remind me of how Hayek used illustrations in Road to Serfdom as well.
It really does become more convincing when you use examples such as the one Peter Schiff used in this book. I mean, the story is so simple that even children could understand it. I even think it should be turned into an animated film or something. Many times while reading it, aside from the commentaries, it actually felt as if I was reading a children's book.
Aside from the simple and thought-provoking allegory, the story is also filled with a lot of parodies and funny parallels with the events the lead to the US recession. Having characters such as "Ben Barnacle" who give out government issued bank notes in place of using fish for trade. It is truly entertaining and I did find myself chuckling many times throughout the book.
The reason I recommend this book is because of the basic concepts that you can learn from it. They are so basic but often they are overlooked by people, even intellectuals. So many people are under the impression that we need to increase the size and power of government and that more intervention and regulation is the solution to many of society's problems. This book will show exactly the importance of a limited-government and individual liberty and how these concepts are the true solution to our problems.