Charter Cities

In recent years Cuba has been a destination for many Canadians to escape the winter. For me the politics of that place for the past 50 years is a turnoff and I'm not a fan of sun and surf anyway. But a small and problematic part of that island is run by Americans, Guantánamo Bay, may become a bargaining chip in Obama's overtures to Latin America. If the Cuban ruler, the younger Castro or whoever takes over, has any smarts they may opt for an idea put forth by economist Paul Romer. Romer unveils a bold idea: "charter cities," city-scale administrative zones governed by a coalition of nations. Could Guantánamo Bay become the next Hong Kong? Watch:

Government bailouts and Moral Hazard

Another great column today by Gwyn Morgan in the Globe and Mail titled: Bailouts and the nasty consequences of 'moral hazard'. It points the finger at the cause of the financial mess that started in the U.S. and then proceeds to explain how "they gets us coming, and they gets us going." Morgan rehashes much of what has already been said, but he is more lucid and speaks with the authority of a Canadian business person and says it far better than I could. Do yourself a favour and read it.

The Seasteading Institute and The Israel Test

I often hear people ask where are the libertarian countries that exist today in 2009? The answer is simple, there are none that have all the components of a libertarian society, but there are many countries that operate to a limited degree under some libertarian principles. The most immediate hope for a completely libertarian society is TSI, The Seasteading Institute. Under the direction of Patri Friedman the grandson of Dr. Milton Friedman (see YouTube interview below), TSI seeks to establish autonomous ocean communities to improve the human condition by enabling innovation with new political and social systems - hopefully libertarian systems. The young Friedman gives up on attempts to change our societies from within, instead he thinks we should start from scratch - at sea. I certainly understand the frustration from which an idea like that can originate so I will watch TSI with interest and anticipation. In the mean time I will continue to pound the table for change here, on dry land, within easy driving distance to just about everything.

In a recent column, Neil Reynolds wrote about a book The Israel Test, which discusses Israel's extraordinary free market achievement and posits that "Israel has become one of the most important economies in the world and is second only to the United States in its pioneering of technologies that improve human life." The book also discusses achievements of Jews (a minority group if ever there was one) in general and of Israel in particular. Israel was established in a hostile environment just 60 odd years ago and has evolved from a pseudo-socialist democracy to a country that has "sloughed off its manacles of confiscatory taxes, oppressive regulations, government ownership and socialist nostalgia." Here is an experiment like the one TSI aspires to, that shows even a small measure of liberty has impressive results. The results are more impressive given the achievements of those nations, mostly dictatorships and religious autocracies surrounding Israel by comparison. Imagine what a large measure of liberty would nurture - in any nation.

The good news of the Toronto garbage strike

There are rumblings in some Toronto media that a political shift has occurred and the tide has turned in the politics of the City of Toronto. The cause is the 39 day garbage and city workers strike that seemed to hinge on the issue of bankable sick days. The city's mayor insists that a victory was achieved and that the city will save $140 million over the next five years which amounts to an annual saving of less than 1/3 of 1% of the city's operating budget of $8.7 billion (2009). The union thinks their membership did well; obviously someone is wrong. The problem is that the city's negotiators were hamstrung. They did not have the option to negotiate with another entity like a private contractor. The city was negotiating with a city sanctioned union monopoly and no one else. This "partnership" between the city and the union benefits the union at the expense and inconvenience of the city tax payers. As a result of the strike the good news is that city tax payers are beginning to realize this as evidenced in this poll (see the PDF on the right). The idea of contracting out garbage collection (as exists in the former City of Etobicoke and many other municipalities in the GTA) is finally becoming a viable option for many Toronto voters (see the poll). Only when competition exists can prices be set that are fair both to the taxpayer and the city worker given market conditions of the day. In the midst of a recession with GTA unemployment approaching 10%, you would think that even unions would contemplate concessions. Why should they given their monopoly position? So is the mayor of Toronto right in declaring victory, or is this a wake-up call for all voters? I think its time to wake up.