Book Review: Muhammad Yunus – Banker To The Poor: Micro-Lending and the Battle Against World Poverty

Muhammad Yunus – Banker To The Poor: Micro-Lending and the Battle Against World Poverty (New York: PublicAffairs, 2007)

Yunus is a Bangladeshi economist who did much to popularize microlending—small loans to budding entrepreneurs in the developing world. He won the 2006 Nobel Peace Prize. This is his autobiography.

While his bottom-up approach to development is a massive improvement from the top-down model favored by economists such as Jeffrey Sachs and organizations like the World Bank, Yunus is not without his critics, and was touched by scandal in recent years. Now 80 years old, he is mostly retired.

Though not entirely objective, this is a good introduction to how a creative, entrepreneurial approach can have a large positive impact on philanthropy and economic development. There are lots of ways to cook an egg. Yunus’ recipe is one of many that are not perfect, but are still part of a healthy diet.

Further reforms must operate not just in finance or in this or that policy area, but also at the institutional level, such as property rights protections, and in culture, such as a general sense that openness, innovation, and commerce are good things, and corruption should be resisted, rather than tolerated.

Book Review: Eamonn Butler – Friedrich Hayek: The Ideas and Influence of the Libertarian Economist

Eamonn Butler –  Friedrich Hayek: The Ideas and Influence of the Libertarian Economist (Hampshire, UK: Harriman House, 2012)

Butler has written accessible intellectual biographies of several major classical liberal thinkers. His entry on Hayek does exactly what it intends to. While it does not offer the same depth as Bruce Caldwell’s lengthy Hayek’s Challenge, that isn’t Butler’s goal. Instead, in about 150 pages, students and lay readers can get high-level yet accessible explanations of spontaneous order, the importance of using bottom-up processes rather than top-down planning, and other key Hayekian concepts, plus a tour of Hayek’s major works.

His native Vienna was at its cultural and intellectual peak during his childhood, and most of his family were natural scientists, as were both of his children. This sparked his interest in evolutionary processes, in which intricate designs require no designer. He fought in World War I, earned two doctorates, was a members of Ludwig von Mises’ famous seminars, then joined the London School of Economics faculty and became a friend and rival to Keynes.

He moved permanently when the Nazis made their intentions clear, and wrote his most famous book, 1944’s The Road to Serfdom, from a barn well outside London, which was still under the Blitz. This period marked the end of Hayek’s technical economics work on business cycles and monetary theory. Hayek instead turned to a multidisciplinary approach that contributed to political philosophy, law, history, and science, as well as economics. Serfdom, one of Hayek’s first works from this new approach, is commonly misunderstood as a slippery-slope argument, in which any move away from liberalism will send a country on a one-way street to totalitarianism.

Hayek instead makes a package-deal argument. A planned economy requires getting rid of liberal institutions such as private property, equality before the law, and all the other common rights. Similarly, a society that respects human rights must also have a free economy. For Hayek, economic freedom and personal freedom are a package deal. These two liberalisms cannot be chosen a la carte; it’s both or neither.

Butler goes over the highlights of Hayek’s major early papers, collected in Individualism and Economic Order, though he gives too little attention to Hayek’s larger “Abuse of Reason” project, which was never completed, but include The Counter-Revolution of Science, and influenced much of his later work. Also under-served here is Hayek’s major psychological work, The Sensory Order. One of Hayek’s main arguments in this book is that a mind cannot fully understand something more complicated than itself. A policy implication is that a central planner can never fully understand how millions of individual minds think, interact, and make their own evolving plans.

Butler also tours the Constitution of Liberty, which is Hayek’s positive vision of what a free society’s institutional and legal structures would look like.

Hayek’s later Law, Legislation, and Liberty trilogy also gets a close inspection, with a chapter on Hayek’s views on social justice—which in this reviewer’s opinion, don’t entirely hold up. More important is Hayek’s distinction between higher principles of natural law, and the flawed man-made legislation that attempts to capture its essence—or, just as often, attempts to overrule it. Butler also goes into the usually-overlooked third volume, in which Hayek take a cue from Plato’s Republic and builds his own utopian institutional system. It’s a bit out there, and one of Hayek’s least essential works.

Hayek’s final book was The Fatal Conceit, which haunts every aspiring planner who thinks he can overcome the knowledge problems that have attempted to impose their own top-down philosophy on a bottom-up world.

Butler concludes with a look at Hayek’s legacy and what the future of liberalism might hold.

This Week in Ridiculous Regulations

Thanksgiving will be a little different this year. With the recent news about promising COVID-19 vaccines, next year’s turkey celebration should be closer to normal. In other news, the famous Arecibo radio telescope in Puerto Rico has become another 2020 casualty. It will close due to structural damage sustained in recent storms. On the other hand, a SpaceX rocket safely took four astronauts to the International Space Station. Meanwhile, regulatory agencies issued new regulations ranging from cherry marketing subcommittees to groundfish specifications.

On to the data:

• Last week, 69 new final regulations were published in the Federal Register, after 58 the previous week.
• That’s the equivalent of a new regulation every two hours and 26 minutes.
• Federal agencies have issued 2,952 final regulations in 2020. At that pace, there will be 3,280 new final regulations. Last year’s total was 2,964 regulations.
• There were 38 proposed regulations in the Federal Register last week, for a total of 1,949 on the year. At that pace, there will be 2,166 new proposed regulations in 2020. Last year’s total was 2,170 proposed regulations.
• Last week, agencies published 435 notices, for a total of 19,986 in 2020. At that pace, there will be 22,207 new notices this year. Last year’s total was 21,804.
• Last week, 1,692 new pages were added to the Federal Register, after 1,674 pages the previous week.
• The 2020 Federal Register totals 74,593 pages. It is on pace for 82,882 pages. The 2019 total was 70,938 pages. The all-time record adjusted page count (which subtracts skips, jumps, and blank pages) is 96,994, set in 2016.
• Rules are called “economically significant” if they have costs of $100 million or more in a given year. Five such rules have been published this year. Four such rules were published in 2019.
• The running cost tally for 2020’s economically significant regulations ranges from net savings of between $2.04 billion and $5.69 billion. 2019’s total ranges from net savings of $350 million to $650 million, mostly from estimated savings on federal spending. The exact number depends on discount rates and other assumptions.
• Agencies have published 70 final rules meeting the broader definition of “significant” so far this year. 2019’s total was 66 significant final rules.
• So far in 2020, 588 new rules affect small businesses; 24 of them are classified as significant. 2019’s totals were 501 rules affecting small businesses, with 22 of them classified as significant.

Highlights from last week’s new regulations:

• Marketing Order No. 966 for tomatoes grown in Florida has been amended.
• The government’s Cherry Industry Administrative Board is implementing subcommittee size and new term limit rules.
• There is a new Tehachapi Mountains viticultural area.
• National Environmental Policy Act compliance from the Forest Service.
• The Environmental Protection Agency will be enforcing parts of the Clean Air Act as they are written. This qualifies as an economically significant policy change with estimated savings of $860 million to $1.5 billion in present value terms.
• Health care for astronauts.
• Export regulations from the Industry and Security Bureau.
• Guidance document policies from the Peace Corps.
• Fees for trademarks.
• Bird hunting in Alaska.
• Eligibility for subsidized flood insurance.
• Call authentication trust anchor.
• A regulatory cleanup initiative from the Food and Drug Administration, the Centers for Medicare and Medicaid Services, and the Children and Families Administration. They will go through their existing rules and fix typos, mistakes, and references to other regulations.
• Cooperative agreements between NASA and commercial firms.
• Minimum standards for intercity passenger rail service.
• Last week: Samoan swordfish. This week: Samoan bottomfish.
• Harvesting specifications for groundfish caught in Alaska.

Rules for For more data, see Ten Thousand Commandments and follow @10KC and @RegoftheDay on Twitter.

Book Review: Adam Minter – Junkyard Planet: Travels in the Billion-Dollar Trash Trade

Adam Minter – Junkyard Planet: Travels in the Billion-Dollar Trash Trade (New York: Bloomsbury, 2013).

Waste not, want not. Minter’s tour of the global scrap and recycling industry is fascinating. He grew up in the industry, as the son of a scrapyard owner in Minnesota. As Minter got older and learned the business (and dealt with his father’s messy personal life), he discovered a whole world based on turning trash into treasure, and parlayed that into a journalism career, based in Shanghai. The amount of creativity and hidden efficiencies he finds are a source of optimism. A dreary-sounding dirty job turns out to be vibrant, innovative, and highly globalized.

At the same time, Minter is realistic about his industry. There are some shady goings-on in the circuit recycling and scrap metal industries in China, including corruption, dishonesty, and worker mistreatment. On balance, the ingenious ways entrepreneurs find to reduce, reuse, and recycle waste are good for the environment. But there are still some problems, especially in China. While these abuses are almost certainly greener than shutting down these industries would be, there is room for improvement.

If there is a lesson to be learned here, the most effective way to make sure people are responsible environmental stewards is to allow them to make a profit, and allow them to be creative. As in so many other policy areas, progress happens from the bottom up, not the top down.

Minter recently published a sequel of sorts, titled Secondhand: Travels in the New Global Garage Sale.

Book Review: Judith Herrin – Ravenna: Capital of Empire, Crucible of Europe

Judith Herrin – Ravenna: Capital of Empire, Crucible of Europe (Princeton: Princeton University Press , 2020).

Less a history of Ravenna, than a history of Europe from about 390 to 813 AD. Herrin’s history ranges from Late Antiquity (Early Christianity in Herrin’s terminology) up to Charlemagne. Ravenna is more of a constant background character in a larger narrative than the star.

Ravenna has a fascinating place in history, and I would have loved to have learned more about the city itself. As the Roman Empire’s focus moved east, the city of Rome lost its luster. Ravenna became something of a second capital city on the Italian peninsula. Emperors would live their entire lives in or near Ravenna, perhaps visiting Rome once or twice in their reign to give a ceremonial appearance before the Senate, which still existed, but had no purpose other than to keep Rome’s remaining wealth squabbling with each other rather than with the Emperor.

But the Empire’s center of gravity continued to move east past Ravenna, to Constantinople. Ravenna never really got its due as the capital of a major empire. First, Diocletian split the Empire into separate Eastern and Western halves in the late third century AD. This would have been Ravenna’s best time to shine, but it was always overshadowed by Constantinople, the Eastern capital. Then the Western half collapsed in 476, and Ravenna slowly descended into obscurity—though as Herrin shows, for this entire period, and for centuries to come, it was still home to fascinating figures and power struggles.

Herrin does not go into great detail about Ravenna’s layout, architecture, daily life and culture, economy, intellectual life, geography, or much else about he city. But she does an excellent job on her narrower focus of monarchs and politics. The amount of times Ravenna changed hands between Romans, Byzantines, Goths, and eventually proto-national dynasties is astounding. Ravenna might rarely have been the center of attention, but it was nearly always part of the action. Most of Herrin’s narrative centers around powerful rulers.

Galla Placidia (d. 437 AD), the daughter of the Gothic emperor Theodosius I and regent to Valentinian III, emerges as a powerful figure at a time when women rulers were extremely rare. She spent part of her early life in the household of the Roman general Stilicho (d. 408), who became a de facto emperor. She was captured by the invader Alaric’s army, and married the Visigothic king Ataulf, becoming their queen. After he was murdered, she eventually married the Roman emperor Constantius II, with whom she had a son, Valentinian III, and served as his regent.

Theoderic the Great (d. 526) was an Ostrogothic king who filled the power vacuum left by the fall of Rome, and fought off the Byzantines, as Eastern Empire had come to be called. As an Arian Christian, he played an outsize role in early Church schisms, which the Arians lost.

Justinian (d. 565) was Byzantine emperor about a generation after Theoderic’s time. He came as close as anyone to reuniting the two halves through his general Valisarius, though he ultimately fell short. He also issued an influential law code in 525, and the Hagia Sophia was built during his reign—though far from Ravenna.

After Justinian’s death, the Lombards (“long beards”), thought to be of Scandinavian origin, took over Northern Italy, including Ravenna. They were in turn displaced by the Merovingian dynasty, which ruled over large pats of what is now France, and then the Carolingian dynasty, which takes its name from its founder Carolus Magnus, which translates from the Latin as “Chuck the Great.” He is today known as Charlemagne.

Charlemagne represents a lot of things. Two of the most important are the power struggle between church and state, and the power dynamics between East and West. Ravenna was home to the Byzantine papacy from 537 to 752, when it moved back to Rome under Stephen III. This represented a shift in the center of gravity from the East back to the West. In 800, the pope crowned Charlemagne on Christmas Day in St. Peter’s Basilica—in Rome, not Ravenna. This was another data point for the Western revival. It also marked a shift in power from church back to state.

A third Carolingian theme is European unification. After centuries of squabbling between Romans, Byzantines, barbarians, the Catholic Church, the Orthodox Church, and Muslims, Charlemagne centralized power over the whole region in himself. And again, Ravenna did not play a starring role. The main locations for this drama were in Rome and Aachen, Charlemagne’s rising capital to the North that had its own symbolic significance. But Ravenna was right there in the middle, taking it all in.

Herrin’s book might have done with either a different title, or with more attention paid to the city in its title. But it is still an excellent history about a period and a city that do not get enough attention from either historians or their readers.

This Week in Ridiculous Regulations

The 2020 election is finally, mercifully, over. Barring a surprise in the Georgia Senate runoffs, we will continue to have divided government. This arrangement typically gives the slowest growing government—though with the tradeoff that positive reforms become more difficult, too. It was also a four-day work week for the federal government, which closed Wednesday in observance of Veteran’s Day. Meanwhile, regulatory agencies issued new regulations ranging from NASA rewards to Samoan swordfish.

On to the data:

  • Last week, 58 new final regulations were published in the Federal Register, after 70 the previous week.
  • That’s the equivalent of a new regulation every two hours and 54 minutes.
  • Federal agencies have issued 2,877 final regulations in 2020. At that pace, there will be 3,269 new final regulations. Last year’s total was 2,964 regulations.
  • There were 36 proposed regulations in the Federal Register last week, for a total of 1,910 on the year. At that pace, there will be 2,169 new proposed regulations in 2020. Last year’s total was 2,170 proposed regulations.
  • Last week, agencies published 318 notices, for a total of 19,551 in 2020. At that pace, there will be 22,217 new notices this year. Last year’s total was 21,804.
  • Last week, 1,674 new pages were added to the Federal Register, after 2,103 pages the previous week.
  • The 2020 Federal Register totals 72,897 pages. It is on pace for 82,838 pages. The 2019 total was 70,938 pages. The all-time record adjusted page count (which subtracts skips, jumps, and blank pages) is 96,994, set in 2016.
  • Rules are called “economically significant” if they have costs of $100 million or more in a given year. Four such rules have been published this year. Four such rules were published in 2019.
  • The running cost tally for 2020’s economically significant regulations ranges from net savings of between $1.19 billion and $4.19 billion. 2019’s total ranges from net savings of $350 million to $650 million, mostly from estimated savings on federal spending. The exact number depends on discount rates and other assumptions.
  • Agencies have published 63 final rules meeting the broader definition of “significant” so far this year. 2019’s total was 66 significant final rules.
  • So far in 2020, 575 new rules affect small businesses; 24 of them are classified as significant. 2019’s totals were 501 rules affecting small businesses, with 22 of them significant.

Highlights from last week’s new regulations:

For more data, see Ten Thousand Commandments and follow @10KC and @RegoftheDay on Twitter.

Book Review: Joe Gross – Fugazi: In on the Kill Taker (33 1/3 Series)

Joe Gross – Fugazi: In on the Kill Taker (33 1/3 Series), (New York: Bloomsbury Academic Press, 2018)

The 33 1/3 book series contains over a hundred monograph-length treatments of classic music albums. It takes its name from an LP’s rotation speed, 33 1/3 RPMs. My friend Shawn Macomber sent me this one on one of my favorites, Fugazi’s 1993 In on the Kill Taker album. Gross interviews and quotes all four band members at length, and explores every facet of their careers.

It’s roughly organized as an introductory overview of the band followed by a chapter for each song on the album, plus occasional interludes. But within that framework Gross tends to wander quite a bit.

Fugazi actually recorded Kill Taker twice. The first attempt was in Chicago with Steve Albini, and did not turn out well. Albini is the singer/guitarist in Shellac, a well-known producer whose credits include Nirvana’s In Utero, and has an outspoken DIY ethos that meshes well with Fugazi’s. They worked well together and became good friends, but for some reason something was missing from from what they put on tape.

The band decided to try again at their hometown Inner Ear Studios in Arlington, VA with their longtime producer Don Zientara, and this time they captured the spark that was missing from the Albini sessions.

Gross, without being intrusive, goes into the band’s upbringing and personal lives to explain what made the band tick, and what was going on behind the scenes in the Kill Taker era. As a straightedge band— guitarist/vocalist Ian MacKaye (pronounced Mc-Eye) coined the term—Fugazi never had the substance abuse troubles and related drama that felled so many other bands. For the most part they have positive family lives, including the MacKaye’s parents’ famous Sunday dinner tradition, which the band, their significant others, and their friends scrupulously attended whenever they weren’t on tour.

But the album-tour-repeat grind was getting to the band a bit, and there is an undercurrent of weariness on the album. Of all Fugazi’s releases, Kill Taker is also the angriest. It marks a dissonant evolution from their earlier fusion of punk rock with dub reggae-style rhythms. The band members were only about 30 years old at this point, but they were already grizzled veterans of the music business. MacKaye had been in high-profile bands since he was a teenager, playing in the Teen Idles and then Minor Threat. Guy Picciotto, Fugazi’s other guitarist and co-lead vocalist, along with drummer Brendan Canty, was previously in the influential but short-lived Rites of Spring.

MacKaye’s co-founded record label, Dischord, was its own full-time business, and another source of stress. It started as a way to self-release MacKaye’s bands and document other local DC acts. But DC was home to so many top-notch bands that Dischord ended up becoming one of the country’s top indie labels. As of 2020, MacKaye still owns and runs the label, and is still putting out new releases.

Two other Dischord bands, Shudder to Think and Jawbox, signed to major labels around this time. The controversy this caused seems a bit silly in hindsight, but it was a big deal in the indie scene. Both MacKaye and the bands handled it with grace, but the experience was a headache, not least because of the fan outcry.

MacKaye, Fugazi, Dischord, and the DC punk scene have been covered in countless books and documentaries. MacKaye takes his role as a documentarian of DC’s punk scene seriously, and he has always been generous with granting interviews. But Gross still unearths a lot of fresh information here, about both Kill Taker and Fugazi’s career.

There are an unusual number of typos and misspellings for a book published by an academic press. But that didn’t take away from the joy I got from, for the first time in years, listening to Kill Taker again a few times through over the summer while reading this book, armed with new knowledge about what abstruse song titles like “Facet Squared” mean, and the stories behind lyrics I’ve wondered about or misheard for years.

Report on the Digital Economy

George Mason University’s Global Antitrust Institute has released a 1,361-page Report on the Digital Economy.

EU’s Antitrust Charges against Amazon at Odds with Reality

This is a press release originally posted at cei.org.

The European Commission today announced it was charging Amazon with antitrust violations, accusing the retailer of using data from third-party sellers to benefit its own retail offerings.

CEI senior fellow Ryan Young said:

“Whether intentionally or not, the EU’s antitrust case against Amazon is trade protectionism by another name, at a time when the global economy cannot afford it.

“It also falls for the relevant market fallacy. This is using fancy terminology to say that Amazon dominates an unrealistically narrow market. In this case, the EU argues that Amazon dominates ‘marketplace services’ and ‘online platforms.’ Amazon is, in fact, a low-margin retailer. And it has a roughly 1 percent global market share. It sells things in a variety of ways, and people can buy them in a variety of ways—or not, as they choose.

“Amazon has made retail more competitive. Amazon’s third-party seller services give smaller businesses access to a global market they did not previously have. Traditional large retailers, such as Walmart and Target in the U.S., have expanded their online options to compete against Amazon. So have grocery stores—which is important in the age of COVID. It is difficult to make an argument that these developments have harmed consumers or producers.”

Read more:

This Week in Ridiculous Regulations

The 2024 election season officially began on Wednesday. The 2020 Federal Register topped 70,000 pages right on election day, and is on pace to be the Trump era’s largest by more than 11,000 pages. The usual midnight rush that accompanies a change in power could push that number even higher. Meanwhile, regulatory agencies issued new regulations ranging from semichemical emissions to riding electric bikes in water.

On to the data:

  • Last week, 70 new final regulations were published in the Federal Register, after 55 the previous week.
  • That’s the equivalent of a new regulation every two hours and 24 minutes.
  • Federal agencies have issued 2,819 final regulations in 2020. At that pace, there will be 3,263 new final regulations. Last year’s total was 2,964 regulations.
  • There were 54 proposed regulations in the Federal Register last week, for a total of 1,874 on the year. At that pace, there will be 2,169 new proposed regulations in 2020. Last year’s total was 2,169 proposed regulations.
  • Last week, agencies published 469 notices, for a total of 19,233 in 2020. At that pace, there will be 22,260 new notices this year. Last year’s total was 21,804.
  • Last week, 2,103 new pages were added to the Federal Register, after 1,486 pages the previous week.
  • The 2020 Federal Register totals 71,211 pages. It is on pace for 82,421 pages. The 2019 total was 70,938 pages. The all-time record adjusted page count (which subtracts skips, jumps, and blank pages) is 96,994, set in 2016.
  • Rules are called “economically significant” if they have costs of $100 million or more in a given year. Four such rules have been published this year. Four such rules were published in 2019.
  • The running cost tally for 2020’s economically significant regulations ranges from net savings of between $1.19 billion and $4.19 billion. 2019’s total ranges from net savings of $350 million to $650 million, mostly from estimated savings on federal spending. The exact number depends on discount rates and other assumptions.
  • Agencies have published 63 final rules meeting the broader definition of “significant” so far this year. 2019’s total was 66 significant final rules.
  • So far in 2020, 561 new rules affect small businesses; 24 of them are classified as significant. 2019’s totals were 501 rules affecting small businesses, with 22 of them significant.

Highlights from last week’s new regulations:

For more data, see Ten Thousand Commandments and follow @10KC and @RegoftheDay on Twitter.