Where does the Orient Express go? Train has new European routes


Before the dawn of private jets and business class flights, royalty and high society members traveled through Europe onboard luxury trains.

Now anyone can do it — if they are willing and able to spend £1,700 ($2,300) for a one-night trip.

That’s the starting rate to go from Florence to Paris aboard the Venice Simplon-Orient-Express, a historic luxury train operated by the LVMH-owned Belmond travel brand. Other routes cost more — much more.

The prices, however, don’t seem to deter rail enthusiasts. Many journeys sell every seat.

“2019 was a record year for Venice Simplon-Orient-Express that saw our revenue increase by 70% compared to those in 2015,” said Gary Franklin, vice president of Belmond’s trains and cruises.

When passenger journeys restarted in June, travelers again booked some routes solid.

“We are certainly seeing a revival of rail travel post-pandemic,” Franklin told CNBC. “With more and more travelers discovering … slow travel, we anticipate that this rise in demand and interest will continue.

The historic Orient Express service

The Venice Simplon-Orient-Express comprises 11 sleeping cars, three restaurant cars, one bar car and two staff cars, making it the longest passenger train in Europe, said Franklin.

But it’s not just an ordinary train. Each of the 17 carriages was once part of Europe’s iconic Orient Express, a train service that connected Paris to Istanbul beginning in 1883. The service later expanded to cities across Europe, reaching its “heyday” between World War I and World War II, said Franklin.

The oldest carriage on the Venice Simplon-Orient-Express dates to 1926.

Courtesy of Belmond

Jet travel sidelined the famous rail line. Eventually the carriages fell into disrepair, and services ceased.

In the 1970s, American James Sherwood, Belmond’s founder, bought several dilapidated carriages at an auction. By 1982, he had located — and restored to their former grandeur — enough original carriages to form the Venice Simplon-Orient Express that still operates today.

New routes across Europe

Because of the Covid pandemic, the VSOE, as it is known, missed its entire 2020 travel season, which runs from March to November.

Following an 18-month closure, the train relaunched in June with new routes to some of Europe’s most popular cities. In addition to London, Paris and Venice, the luxury train now goes to Amsterdam, Brussels, Geneva, Rome and Florence.

The new Amsterdam route is particularly popular, said Franklin, adding that schedules to the city are close to selling out for 2022.

The name “Simplon” is from the Simplon Tunnel, a railway tunnel opened in 1906 that goes through the Alps between Switzerland and Italy. Some Belmond routes still use the tunnel today.

Courtesy of Belmond

Belmond also added three new “grand suites” during the train’s closure. The suites, now six in total, fit two passengers and have bedrooms, lounge areas and private bathrooms made of marble and hand-blown Italian glass. Prices start at £5,300 ($7,200) per person for short journeys.

The train’s suites are popular due to growing demand for privacy and special-occasion travel, Franklin said.

Why people pay the price

We only have 120 people on a train, where an equivalent train may have 2,000 people.

Gary Franklin

vice president, Belmond trains and cruises

Most trips only last one night. Others are longer, such as the popular five-night journey that retraces the historic route from Paris to Istanbul. The train travels this route once a year in August, and cabins usually sell out a year in advance, said Franklin.

Prices for the annual trip make one-night bookings seem like a steal.

Twin cabins for the run to Istanbul are £35,000 ($47,650) per journey, while grand suites sell for an eye-popping £110,000 ($150,000). All six suites are booked for the August 2022 trip.

British writer Agatha Christie immortalized the Paris to Istanbul route in her book “Murder on the Orient Express,” which she wrote after Carriage 3309 – which now houses the three new grand suites – got stuck in a snow drift in 1929, said Belmond’s Franklin.

Courtesy of Belmond

Franklin acknowledged that trips on the Venice Simplon-Orient-Express aren’t cheap, but neither is restoring and maintaining the carriages.

“The food and beverage onboard the train … it isn’t cheap; accessing the railway network isn’t cheap,” he said. “Also, we only have 120 people on a train, where an equivalent train may have 2,000 people.”

Multi-course meals and beverages, but not alcohol, are included in the rates, and menus change depending on the destinations and season.

Courtesy of Belmond

He likened the trips to “a private jet on wheels” and the carriages to “art pieces.”

“As you’re going through the countryside in northern France, you wake up in your bed with breakfast in bed. You pull up the blinds, you’ve got the Swiss Alps and the Swiss lakes outside your window,” he said “You’re having lunch, as you go across the lagoon to Venice.”

For that experience, “It’s fantastic value for money,” he said.



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Why Does Money Have Value? Not Because the Government Says It Does.



Why does the dollar bill in our pockets have value? According to some commentators, money has value because the government in power says so. For other commentators the value of money is on account of social convention. What this implies is that money has value because it is accepted, and why is it accepted? … because it is accepted! Obviously, this is not a good explanation of why money has value.

The difference between Money and Other Goods

Now, demand for a good arises from its perceived benefit. For instance, people demand food because of the nourishment it offers them once consumed. This is not so with respect to money. According to Murray N. Rothbard,

Money, per se, cannot be consumed and cannot be used directly as a producers’ good in the productive process. Money per se is therefore unproductive; it is dead stock and produces nothing.

Why, then, is there demand for money? Why do individuals desire to have something which cannot be consumed and produces nothing? To provide an answer to this one must go back in time to establish how money emerged.

In trying to improve their lives and well-being, individuals discovered that by replacing direct exchange, where individuals exchange one good for another good, with indirect exchange they could enhance the marketability of their produce. The introduction of indirect exchange means that the produce of an individual is exchanged for some more marketable good and then this good is exchanged for the produce of another individual.

The key to a good’s emergence as a mediator of indirect exchange is that it must be widely accepted. On this, Ludwig von Mises observed that, over time,

there would be an inevitable tendency for the less marketable of the series of goods used as media of exchange to be one by one rejected until at last only a single commodity remained, which was universally employed as a medium of exchange; in a word, money.

Similarly, Murray Rothbard wrote that,

Just as in nature, there is a great variety of skills and resources, so there is a variety in the marketability of goods. Some goods are more widely demanded than others, some are more divisible into smaller units without loss of value, some more durable over long periods of time, some more transportable over large distances. All of these advantages make for greater marketability. It is clear that in every society, the most marketable goods will be gradually selected as the media for exchange. As they are more and more selected as media, the demand for them increases because of this use, and so they become even more marketable. The result is a reinforcing spiral: more marketability causes wider use as a medium, which causes more marketability, etc. Eventually, one or two commodities are used as general media—in almost all exchanges—and these are called money.

Through the ongoing process of selection, people settled on gold as their preferred general medium of exchange. By means of money, individuals can make goods they have produced more marketable. Thus, a butcher can now trade with a vegetarian shoemaker. The butcher can exchange his meat for money and then exchange the money for shoes.

What makes goods more marketable is the wide acceptance of money by individuals. What gives rise to this acceptance is that money has a purchasing power, i.e., a price. People demand money because it has purchasing power. How does a thing that serves as the medium of exchange acquire its purchasing power—its price in terms of other goods?

We know that the law of supply and demand explains the price of a good. Likewise, it would appear that the same law should explain the price of money.

However, there is a problem with this way of thinking, since the demand for money arises because money has purchasing power, i.e., money has a price. Yet if the demand for money depends on its purchasing power, i.e., its price, how can this price be explained by demand?

We are seemingly caught here in a circular trap, for the purchasing power of money is explained by the demand for money while the demand for money is explained by its purchasing power.

This circularity seems to provide credibility to the view that the acceptance of money is the result of a government decree and social convention.

Mises Explained How Money’s Purchasing Power Originated

Now the process of selection explains how the most marketable commodity was selected as the general medium of exchange. This process however, does not tell us how the purchasing power of money originated.

In his writings, Mises showed how money acquired its purchasing power. He began his analysis by noting that today’s demand for money is determined by the yesterday’s purchasing power of money. (Remember individuals accept money because it has purchasing power, a price).

Consequently, for a given supply of money, today’s purchasing power is established. Yesterday’s demand for money in turn was fixed by the prior day’s purchasing power of money. Therefore, the price of a given supply of money was set by yesterday’s price of money. The same procedure applies to past periods. By regressing through time, we will eventually arrive at a point in time when money was just an ordinary commodity whose price was set by demand and supply.

The commodity had an exchange value in terms of other commodities, i.e., its exchange value was established in barter. On the day a commodity becomes money, it already has an established purchasing power in terms of other goods. This price enables us to form a demand for this commodity as money.

This, in turn, sets the purchasing power of a given supply of this commodity on the day the commodity starts to function as money. Once the price of money is established, it becomes an input in tomorrow’s price of money.

It follows, then, that without yesterday’s information about the price of money, today’s purchasing power of money cannot be established. History is not required to establish the prices of other goods. A demand for these goods arises because of the perceived benefits of consuming them. But the benefit that money provides is that it can be exchanged for goods and services. Consequently, one needs to know the past purchasing power of money in order to establish today’s demand for money.

Using Mises’s framework of thought, also known as the regression theorem, we can infer that it is not possible that money could have emerged as a result of a government decree, a government endorsement, or a social convention. The theorem shows that money must emerge as a commodity. On this Rothbard wrote,

In contrast to directly used consumers’ or producers’ goods, money must have pre-existing prices on which to ground a demand. But the only way this can happen is by beginning with a useful commodity under barter, and then adding demand for a medium to the previous demand for direct use (e.g., for ornaments, in the case of gold). Thus government is powerless to create money for the economy; the process of the free market can only develop it.

Note that the fact that a thing acquires a purchasing power in terms of other goods and services does not qualify it automatically as money. What is required is that the thing become the most marketable entity. The fact that potatoes have an exchange value with respect to various goods does not make potatoes the general medium of exchange. For this to happen, potatoes must acquire wide acceptance as the medium of exchange, i.e., one could use potatoes in most transactions.

Paper Money and Gold

How does all that we have said so far relate to the paper dollar? Originally, paper money was not regarded as money but merely as a representation of gold. Various paper certificates represented claims on gold stored with the banks. Holders of paper certificates could convert them into gold whenever they deemed necessary. Because people found it more convenient to use paper certificates in the exchange for goods and services, these certificates came to be regarded as money.

Because these certificates were seen as a representative of gold, they acquired purchasing power. Paper certificates that were accepted as the medium of exchange opened the door to fraudulent practice. Banks could now be tempted to boost their profits by lending certificates that were not actually covered by gold.

In a free market economy, a bank that overissues paper certificates will quickly find that the exchange value of its certificates in terms of goods and services is starting to decline. To protect their purchasing power, the holders of the overissued certificates would most likely attempt to convert them back into gold. If all of them were to demand gold back at the same time, this would bankrupt the bank. In a free market, then, the threat of bankruptcy would restrain banks from issuing paper certificates unbacked by gold.

The government can, however, bypass the free market discipline. It can issue a decree that makes it legal for the overissued banks not to redeem paper certificates into gold.

Once banks are not obliged to redeem paper certificates into gold, opportunities for large profits emerge that create incentives to pursue an unrestrained expansion of the supply of paper certificates. The unrestrained expansion of paper certificates raises the likelihood of setting off a galloping rise in the prices of goods and services that can lead to the breakdown of the market economy.

To prevent such a breakdown, the supply of paper money must be managed. An important reason for managing the supply, in addition to preventing galloping increases in prices, is to prevent various competing banks from bankrupting each other. This can be achieved by establishing a monopoly bank—i.e., a central bank—that manages the expansion of paper money. To assert its authority, the central bank introduces its own paper certificate, which replaces the certificates of various banks. The central bank paper certificate is exchanged for the other banks’ certificates at a fixed rate.

The central bank’s paper certificates’ purchasing power is established on the that of the certificates of the various banks. These certificates have a purchasing power because of their link to gold. Hence, the central bank’s paper certificates, which is fully backed by the other bank certificates, is also linked to gold. It follows, then, that the central bank’s paper certificates also acquired their purchasing power because of the link to gold.

Now, following the regression theorem, once the central bank paper certificate has acquired its purchasing power, this serves as an input in the demand for it. The current purchasing power of a given current supply of the central bank paper certificates can thus be established. Hence, the value of the central bank paper certificate, i.e., the paper money known as dollars, is established on account of its historical link to gold.

Conclusion

Contrary to the popular way of thinking, the value of a paper dollar originates in its link to gold—and not government decree or social convention. Following Ludwig von Mises’s regression theorem, money must have originated as a commodity. Furthermore, the fact that an entity has established a purchasing power with respect to various goods and services does not automatically qualify it as money, i.e., as the general medium of exchange. For the entity to become money, it must have wide acceptance.



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The Economic Foundations of Freedom


Animals are driven by instinctive urges. They yield to the impulse that prevails at the moment and peremptorily asks for satisfaction. They are the puppets of their appetites.

Man’s eminence is to be seen in the fact that he chooses between alternatives. He regulates his behavior deliberatively. He can master his impulses and desires; he has the power to suppress wishes the satisfaction of which would force him to renounce the attainment of more important goals. In short: man acts; he purposively aims at ends chosen. This is what we have in mind in stating that man is a moral person, responsible for his conduct.

Freedom as a Postulate of Morality

All the teachings and precepts of ethics, whether based upon a religious creed or whether based upon a secular doctrine like that of the Stoic philosophers, presuppose this moral autonomy of the individual and therefore appeal to the individual’s conscience. They presuppose that the individual is free to choose among various modes of conduct and require him to behave in compliance with definite rules, the rules of morality. Do the right things; shun the bad things.

It is obvious that the exhortations and admonishments of morality make sense only when addressing individuals who are free agents. They are vain when directed to slaves. It is useless to tell a bondsman what is morally good and what is morally bad. He is not free to determine his comportment; he is forced to obey the orders of his master. It is difficult to blame him if he prefers yielding to the commands of his master to the most cruel punishment threatening not only him but also the members of his family.

This is why freedom is not only a political postulate but no less a postulate of every religious or secular morality.

The Struggle for Freedom

Yet for thousands of years a considerable part of mankind was either entirely or at least in many regards deprived of the faculty to choose between what is right and what is wrong. In the status society of days gone by, the freedom to act according to their own choice was, for the lower strata of society (the great majority of the population), seriously restricted by a rigid system of controls. An outspoken formulation of this principle was the statute of the Holy Roman Empire that conferred upon the princes and counts of the Reich (Empire) the power and the right to determine the religious allegiance of their subjects.

The Orientals meekly acquiesced in this state of affairs. But the Christian peoples of Europe and their scions that settled in overseas territories never tired in their struggle for liberty. Step by step they abolished all status and caste privileges and disabilities until they finally succeeded in establishing the system that the harbingers of totalitarianism try to smear by calling it the bourgeois system.

The Supremacy of the Consumers

The economic foundation of this bourgeois system is the market economy in which the consumer is sovereign. The consumer, i.e., everybody, determines by his buying or abstention from buying what should be produced, in what quantity and of what quality. The businessmen are forced by the instrumentality of profit and loss to obey the orders of the consumers. Only those enterprises can flourish that supply in the best possible and cheapest way those commodities and services which the buyers are most anxious to acquire. Those who fail to satisfy the public suffer losses and are finally forced to go out of business.

In the precapitalistic ages the rich were the owners of large landed estates. They or their ancestors had acquired their property as gifts (feuds or fiefs) from the sovereign who with their aid had conquered the country and subjugated its inhabitants. These aristocratic landowners were real lords, as they did not depend on the patronage of buyers. But the rich of a capitalistic industrial society are subject to the supremacy of the market. They acquire their wealth by serving the consumers better than other people do, and they forfeit their wealth when other people satisfy the wishes of the consumers better or cheaper than they do.

In the free-market economy, the owners of capital are forced to invest it in those lines in which it best serves the public. Thus ownership of capital goods is continually shifted into the hands of those who have best succeeded in serving the consumers. In the market economy, private property is in this sense a public service imposing upon the owners the responsibility of employing it in the best interests of the sovereign consumers. This is what economists mean when they call the market economy a democracy in which every penny gives a right to vote.

The Political Aspects of Freedom

Representative government is the political corollary of the market economy. The same spiritual movement that created modern capitalism substituted elected officeholders for the authoritarian rule of absolute kings and hereditary aristocracies. It was this much-decried bourgeois liberalism that brought freedom of conscience, of thought, of speech, and of the press and put an end to the intolerant persecution of dissenters.

A free country is one in which every citizen is free to fashion his life according to his own plans. He is free to compete on the market for the most desirable jobs and on the political scene for the highest offices. He does not depend more on other people’s favor than these others depend on his favor. If he wants to succeed on the market, he has to satisfy the consumers; if he wants to succeed in public affairs he has to satisfy the voters. This system has brought to the capitalistic countries of Western Europe, America, and Australia an unprecedented increase in population figures and the highest standard of living ever known in history. The much-talked-about “common man” has at his disposal amenities of which the richest men in precapitalistic ages did not even dream. He is in a position to enjoy the spiritual and intellectual achievements of science, poetry, and art that in earlier days were accessible only to a small elite of well-to-do people. And he is free to worship as his conscience tells him.

The Socialist Misrepresentation of the Market Economy

All the facts about the operation of the capitalistic system are misrepresented and distorted by the politicians and writers who arrogated to themselves the label of liberalism, the school of thought that in the 19th century crushed the arbitrary rule of monarchs and aristocrats and paved the way for free trade and enterprise. As these advocates of a return to despotism see it, all the evils that plague mankind are due to sinister machinations on the part of big business; what is needed to bring about wealth and happiness for all decent people is to put the corporations under strict government control. They admit, although only obliquely, that this means the adoption of socialism — the system of the Union of Soviet Socialist Republics. But they protest that socialism will be something entirely different in the countries of Western civilization from what it is in Russia. And anyway, they say, there is no other method to deprive the mammoth corporations of the enormous power they have acquired and to prevent them from further damaging the interests of the people.

Against all this fanatical propaganda there is need to emphasize again and again the truth that it is big business that brought about the unprecedented improvement of the masses’ standard of living. Luxury goods for a comparatively small number of well-to-do can be produced by small-size enterprises. But the fundamental principle of capitalism is to produce for the satisfaction of the wants of the many. The same people who are employed by the big corporations are the main consumers of the goods turned out. If you look around in the household of an average American wage-earner, you will see for whom the wheels of the machines are turning. It is big business that makes all the achievements of modern technology accessible to the common man. Everybody is benefited by the high productivity of big-scale production.

It is silly to speak of the “power” of big business. The very mark of capitalism is that supreme power in all economic matters is vested in the consumers. All big enterprises grew from modest beginnings into bigness because the patronage of the consumers made them grow. It would be impossible for small or medium-size firms to turn out those products that no present-day American would like to do without. The bigger a corporation is, the more does it depend on the consumers’ readiness to buy its wares. It was the wishes (or, as some say, the folly) of the consumers that drove the automobile industry into the production of ever-bigger cars and force it today to manufacture smaller cars. Chain stores and department stores are under the necessity to adjust their operations daily anew to the satisfaction of the changing wants of their customers. The fundamental law of the market is: the customer is always right.

A man who criticizes the conduct of business affairs and pretends to know better methods for the provision of the consumers is just an idle babbler. If he thinks that his own designs are better, why does he not try them himself? There are in this country always capitalists in search of a profitable investment of their funds who are ready to provide the capital required for any reasonable innovations. The public is always eager to buy what is better or cheaper or better and cheaper. What counts in the market is not fantastic reveries, but doing. It was not talking that made the “tycoons” rich, but service to the customers.

Capital Accumulation Benefits All of the People

It is fashionable nowadays to pass over in silence the fact that all economic betterment depends on saving and the accumulation of capital. None of the marvelous achievements of science and technology could have been practically utilized if the capital required had not previously been made available. What prevents the economically backward nations from taking full advantage of all the Western methods of production, and thereby keeps their masses poor, is not unfamiliarity with the teachings of technology, but the insufficiency of their capital. One badly misjudges the problems facing the underdeveloped countries if one asserts that what they lack is technical knowledge, the “know-how.” Their businessmen and their engineers, most of them graduates of the best schools of Europe and America, are well acquainted with the state of contemporary applied science. What ties their hands is a shortage of capital.

A hundred years ago America was even poorer than these backward nations. What made the United States become the most affluent country of the world was the fact that the “rugged individualism” of the years before the New Deal did not place too serious obstacles in the way of enterprising men. Businessmen became rich because they consumed only a small part of their profits and plowed the much greater part back into their businesses. Thus they enriched themselves and all of the people. For it was this accumulation of capital that raised the marginal productivity of labor, and thereby wage rates.

Under capitalism, the acquisitiveness of the individual businessman benefits not only himself but also all other people. There is a reciprocal relation between his acquiring wealth by serving the consumers and accumulating capital, and the improvement of the standard of living of the wage-earners who form the majority of the consumers. The masses are in their capacity both as wage-earners and as consumers interested in the flowering of business. This is what the old liberals had in mind when they declared that in the market economy there prevails a harmony of the true interests of all groups of the population.

Economic Well-Being Threatened by Statism

It is in the moral and mental atmosphere of this capitalistic system that the American citizen lives and works. There are still in some parts of the United States conditions left which appear highly unsatisfactory to the prosperous inhabitants of the advanced districts that form the greater part of the country. But the rapid progress of industrialization would have long since wiped out these pockets of backwardness if the unfortunate policies of the New Deal had not slowed down the accumulation of capital, the irreplaceable tool of economic betterment.

Used to the conditions of a capitalistic environment, the average American takes it for granted that every year business makes something new and better accessible to him. Looking backward upon the years of his own life, he realizes that many implements that were totally unknown in the days of his youth and many others that at that time could be enjoyed only by a small minority are now standard equipment of almost every household. He is fully confident that this trend will prevail also in the future. He simply calls it the “American way of life” and does not give serious thought to the question of what made this continuous improvement in the supply of material goods possible. He is not earnestly disturbed by the operation of factors that are bound not only to stop further accumulation of capital but may very soon bring about capital decumulation. He does not oppose the forces that (by frivolously increasing public expenditure, by cutting down capital accumulation, and even making for consumption of parts of the capital invested in business, and, finally, by inflation) are sapping the very foundations of his material well-being. He is not concerned about the growth of statism that wherever it has been tried resulted in producing and preserving conditions which in his eyes are shockingly wretched.

No Personal Freedom Without Economic Freedom

Unfortunately, many of our contemporaries fail to realize what a radical change in the moral conditions of man the rise of statism and the substitution of government omnipotence for this market economy is bound to bring about. They are deluded by the idea that there prevails a clear-cut dualism in the affairs of man — that there is on the one side a sphere of economic activities and on the other side a field of activities that are considered as noneconomic. Between these two fields there is, they think, no close connection. The freedom that socialism abolishes is “only” the economic freedom, while freedom in all other matters remains unimpaired.

However, these two spheres are not independent of each other as this doctrine assumes. Human beings do not float in ethereal regions. Everything that a man does must necessarily in some way or other affect the economic or material sphere and requires his power to interfere with this sphere. In order to subsist, he must toil and have the opportunity to deal with some material tangible goods.

The confusion manifests itself in the popular idea that what is going on in the market refers merely to the economic side of human life and action. But in fact the prices of the market reflect, not only “material concerns” like getting food, shelter, and other amenities, but no less those concerns which are commonly called spiritual or higher or nobler. The observance or nonobservance of religious commandments (to abstain from certain activities altogether or on specific days, to assist those in need, to build and to maintain houses of worship, and many others) is one of the factors that determines the supply of, and the demand for, various consumers’ goods, and thereby prices and the conduct of business. The freedom that the market economy grants to the individual is not merely “economic” as distinguished from some other kind of freedom. It implies the freedom to determine also all those issues that are considered as moral, spiritual, and intellectual.

In exclusively controlling all the factors of production, the socialist regime controls also every individual’s whole life. The government assigns to everybody a definite job. It determines what books and papers ought to be printed and read, who should enjoy the opportunity to embark on writing, who should be entitled to use public assembly halls, to broadcast and to use all other communication facilities. This means that those in charge of the supreme conduct of government affairs ultimately determine which ideas, teachings, and doctrines can be propagated and which not. Whatever a written and promulgated constitution may say about the freedom of conscience, thought, speech, and the press and about neutrality in religious matters must in a socialist country remain a dead letter if the government does not provide the material means for the exercise of these rights. He who monopolizes all media of communication has full power to keep a tight hand on the individuals’ minds and souls.

What makes many people blind to the essential features of any socialist or totalitarian system is the illusion that this system will be operated precisely in the way that they themselves consider as desirable. In supporting socialism, they take it for granted that the “state” will always do what they themselves want it to do. They call only that brand of totalitarianism “true,” “real,” or “good” socialism the rulers of which comply with their own ideas. All other brands they decry as counterfeit. What they first of all expect from the dictator is that he will suppress all those ideas of which they themselves disapprove. In fact, all these supporters of socialism are, unbeknownst to themselves, obsessed by the dictatorial or authoritarian complex. They want all opinions and plans with which they disagree to be crushed by violent action on the part of the government.

The Meaning of the Effective Right to Dissent

The various groups that are advocating socialism, no matter whether they call themselves communists, socialists, or merely social reformers, agree in their essential economic program. They all want to substitute state control (or, as some of them prefer to call it, social control) of production activities for the market economy with its supremacy of the individual consumers. What separates them from one another is not issues of economic management, but religious and ideological convictions. There are Christian socialists (Catholic and Protestant of different denominations) and there are atheist socialists. Each of these varieties of socialism takes it for granted that the socialist commonwealth will be guided by the precepts of their own faith or of their rejection of any religious creed. They never give a thought to the possibility that the socialist regime may be directed by men hostile to their own faith and moral principles who may consider it as their duty to use all the tremendous power of the socialist apparatus for the suppression of what in their eyes is error, superstition, and idolatry.

The simple truth is that individuals can be free to choose between what they consider as right or wrong only where they are economically independent of the government. A socialist government has the power to make dissent impossible by discriminating against unwelcome religious and ideological groups and denying them all the material implements that are required for the propagation and the practice of their convictions. The one-party system, the political principle of socialist rule, implies also the one-religion and one-morality system.

A socialist government has at its disposal means that can be used for the attainment of rigorous conformity in every regard, Gleichschaltung (political conformity) as the Nazis called it. Historians have pointed out what an important role in the Reformation was played by the printing press. But what chances would the reformers have had if all the printing presses had been operated by the governments headed by Charles V of Germany and the Valois kings of France? And, for that matter, what chances would Marx have had under a system in which all the means of communication had been in the hands of the governments?

Whoever wants freedom of conscience must abhor socialism. Of course, freedom enables a man not only to do the good things but also to do the wrong things. But no moral value can be ascribed to an action, however good, that has been performed under the pressure of an omnipotent government.



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It’s Wrong to Draft Women. It’s Also Wrong to Draft Men.



As in many previous years, this year’s National Defense Authorization Act (NDAA) is chock-full of terrible legislation slyly inserted into the NDAA for the purposes of concealing matters from the public. Both parties have been long guilty of this, with both groups using the NDAA to pass police state legislation increasing federal spying and law enforcement powers.

All of the NDAA should be considered controversial since so much of it is devoted to perpetuating the US’s aggressive, wasteful, and counterproductive efforts at global hegemony. But the NDAA also often contains domestic innovations like this year’s inclusion of provisions “grant[ing] military courts the authority to strip servicemembers of their Second Amendment rights without due process and without the servicemember being present in court to defend themselves.”

Unfortunately, though, the only provision that seems to be attracting a lot of attention is the so-called daughter draft which expands mandatory Selective Service registration to women.

In other words, the legislation expands what is de facto conscription since it sets up the US government to enact an active draft with ease and to track down all the young people who are to be forced into military service should the federal government decide to do so.

Any opposition to expansion of the draft is welcome. Yet the reasons for the opposition—mostly coming from conservatives—amount to little more than weak-tea arguments wrapped up in the usual promilitary pablum we’ve come to expect from the Right. These arguments ultimately boil down to saying, “Yes, it’s perfectly fine to enslave young men for a period of years in service of the state. Just don’t do it with women.”

With “opponents” granting such draconian state acts this level of deference and legitimacy, it’s no surprise the regime turns around and decides “the draft is for everybody” after all.

Of course expanding the draft to woman should be opposed, but meaningful opposition must come in the form of opposition to conscription overall. After all, the worst part of conscription is the fact the real-world effect of any draft is a massive expansion in government power over the lives of the population.

Conscription as a 100 Percent Tax

“Conscription is slavery,” Murray Rothbard wrote in 1973, and while temporary conscription is obviously much less bad—assuming one outlives the term of conscription—than many other forms of slavery, conscription is nevertheless a nearly 100 percent tax on the production of one’s mind and body. If one attempts to escape his confinement in his open-air military jail, he faces imprisonment or even execution in many cases.

States have long implicitly recognized the fundamental nature of conscription as a form of taxation. In Switzerland, for example, young men who are found unfit for military service are assessed an additional tax for a period of years in lieu of military service. In other places, such as the United States, where state and local conscription existed prior to the Civil War, those with means were able to avoid military service by paying an additional tax of various sorts, or paying for “substitutes.”

Conscription remains popular among states because it is an easy way to directly extract resources from the population. Just as regular taxes partially extract the savings, productivity, and labor of the general population, conscription extracts virtually all of the labor and effort of the conscripts.

Conscription as a Weapon in the Culture War

If the debate over this issue continues, we’re likely to hear a lot about how “fairness” and egalitarianism requires an expansion of the Selective Service System. It’s part of the Pentagon’s much-touted mission in expanding roles for “transgendered” people and other groups who have presumably been unjustly denied the opportunity to participate in the latest “regime change” scheme. 

But those claims are all distractions from the central issue here, which is the state’s power over the citizen.

After all, if women want to go help bomb children in Afghanistan—and join the Pentagon in losing wars across the globe—they are free to volunteer. Whether or not women can be directly involved in military acts, however, is a completely separate issue from conscription and the Selective Service. There is a difference between opening up military jobs to women and forcing women into military service.

Besides, if fairness is a concern, there’s an easy way to achieve fairness on this issue: abolish the Selective Service for everybody. It’s as easy as that. It wouldn’t even cost a dime of taxpayer money. Simply shred the records, fire everyone who works for Selective Service, and lease out the office space to organizations that do something useful. Then, we won’t have to hear anything about “discrimination” or the alleged sexism implicit in a policy that outrageously neglects to force women to work for the government against their will.

But Isn’t This Just a Symbolic Gesture?

Some who want to expand Selective Service for egalitarian reasons are claiming that it’s all just symbolic anyway, because the draft “will never happen.”

It’s a mistake to think that the draft could never return because people supposedly would overwhelmingly oppose people being forced into combat. Even if that is the case, there is no reason at all why conscription could not be used to draft people for noncombat positions. After all, only a very small portion of the military ever sees combat. The vast majority of soldiers are involved in logistics, transportation, and desk jobs such as computer programming.

Only a small portion of military deaths occur in combat. Most deaths in the military are due to accidents.

Additionally, there is no reason that Selective Service could not be modified to be used to draft people for so-called national service positions in which conscripts would perform noncombat bureaucratic and manual labor jobs. Austria and Switzerland (which have conscription) allow this option for those morally opposed to combat. And historically—such as during World War II—“service” was imposed on conscientious objectors who were forced to work on farms or perform other types of manual labor in special camps.

So no, the draft is not “hypothetical,” “symbolic,” or something that “will never happen.”

Numerous countries in Latin America, Europe, and Asia still employ conscription, and it is hardly some kind of never-used relic from the distant past.

Military service is one thing, the editors at National Review once wrote, but forcing women into it is “barbarism,” they admit. They’re half right. It is indeed barbarism to force women to fight wars for the state. But the same is also true of conscription for men.



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How “Cultural Distance” between Societies Can Hamper Economic Prosperity



Uncovering the cause of disparities in long-term economic performance across societies is of paramount importance to economists. Differences in institutional quality and geographical advantages are usually invoked as reasons for the divergence in economic performance. Although both factors possess explanatory power there is renewed interest in exploring how culture impacts economic development. For decades, we have known that culture can shape economic progress. But recent research has enriched our understanding of cultural forces in explaining income disparities across societies.

One novel measurement to gauge the impact of culture is genetic distance. Genetic distance describes the cultural and evolutionary selections that result in the unequal distribution of personality traits and variation in allelic frequencies across populations. In a landmark paper Enrico Spolaore and Romain Wacziarg posit that culturally transmitted characteristics stemming from genetic distance create barriers to the diffusion of innovations.

The essence of the argument is that countries are more likely to appropriate innovations when they are developed by people who are culturally similar. This has implications for development because genetic distance can forestall the reception of policies and norms that conduce economic prosperity. For instance, Spolaore and Wacziarg in their paper observe that “differences in vertically transmitted characteristics hinder the adoption of norms of investment behavior that are possibly conducive to superior economic outcomes.”

More broadly, they also conclude that differences in income per capita across countries are positively associated with measures of genetic distance between populations. Notwithstanding the controversy this research has elicited, the findings are commonsensical. Basically, Spolaore and Wacziarg are contending that differences in culture erect barriers to the implementation of policies that cultivate economic growth. Essentially, since cultural norms vary by population, some countries may reject ideas that induce economic growth because they are incompatible with cultural beliefs. A popular case is a preference for communal property rights instead of individual rights in some developing countries.

Freedom to sell property and engage in commercial transactions without the input of kin groups aids in capital formation by facilitating large-scale business enterprises. As Joseph Henrich points out in his compelling book The WEIRDest People in the World, Western societies are unusually individualistic and in these societies people prefer the alienability of property. Considering that individualistic property systems ensuring the efficient transfer of land are likely to yield superior economic outcomes, the existence of collectivistic traits in some countries would create a barrier to the reform of property law.

Spolaore and Wacziarg admit that the burdens of genetic distance are not intractable, but the reality is that the consequences cannot be ignored. A 2011 study authored by them titled “Long Term Barriers to the International Diffusions of Innovations” asserts that greater distance from the technological frontier, in this case, the Western world and particularly America, is linked to higher imitation costs. This is because long-term evolutions create different preferences that block the diffusion of technologies. Spolaore and Wacziarg illuminate how genetic distance halts the dispersion of technology: “What matters, in our model, is that random historical divergence introduces different customs, habits and norms across populations, and that these differences, on average, tend to decrease their ability to learn from each other. Even relatively trivial differences in attitudes, appearance or behavior between groups may lead to misunderstanding or discrimination and may create significant barriers to communication and social interactions, reducing opportunities for learning and imitation.”

Likewise, a 2019 study by Sanjesh Kumar and Baljeet Singh that explored the relationship between genetic distance and technological innovation submits that greater genetic distance from the global frontier on innovation predicts lower levels of technological innovation. Furthermore, Vincenzo Bove and Gunes Gokmen in a 2018 publication replicated the findings of Spolaore and Wacziarg by validating the observation that genetic distance is a determinant of income disparities across populations.

Interestingly, they also note that “bilateral trade is one channel through which cultural differences retard the diffusion of development.” Given that people prefer associating with those who share commonalities, these findings are unsurprising. Cultural distance as a barrier to trade is well-documented in the economic literature. In fact, in the article “Genetic Distance, Cultural Differences, and the Formation of Regional Trade Agreements,” Benedikt Heid and Wenxi Lu aver that “higher genetic distance between two countries decreases their probability of having a trade agreement, even when controlling for geographic distance and other controls.”

Additionally, genetic distance even affects the diffusion of social norms and institutions. Using a dataset of linguistic distances between European regions to track fertility decline in Europe during 1830–1970, Spolaore and Wacziarg in a 2019 paper argue that fertility decline occurred earlier and was more prevalent in regions that were culturally closer to the French. In this scenario, France was the frontier. Hence, consistent with data on genetic distance, the cultural peers of France were more receptive to embracing norms of fertility control. Even more intriguing is the recent declaration of Brian Beach and W. Walker Hanlon that changes in fertility patterns in Britain during the nineteenth century were correlated with declines in fertility among culturally British citizens residing in foreign countries like Canada, America, and South Africa.

Moreover, evidence showing that genetic distance impacts the dispersal of institutions is equally interesting. Sharing their results with readers in the essay “The Diffusion of Institution,” Spolaore and Wacziarg write that “greater separation times between populations introduce barriers to the adoption of better institutions.” On another note, research suggests that countries possessing a shorter cultural distance from America are more likely to adopt and maintain transparent and competitive elections than more distantly related countries.

These results are important because they indicate how subtle differences in culture deter economic growth by creating impediments to the diffusion of knowledge. Yet they also reveal the fallacy of comparing different cultures. The cultural values of the West are not universally embraced. So, imploring non-Western populations to follow the European path to modernization is insensible when their notion of progress could be radically different. At some point we must admit the idiocy of comparing countries based on income levels, because many individuals in many countries clearly do not value the Western concept of progress.



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Levi Strauss & Co. (LEVI) Q3 2021 earnings beat


Jeans are displayed at a Levi Strauss store in New York, March 19, 2019.

Shannon Stapleton | Reuters

Levi Strauss & Co. on Wednesday reported fiscal third-quarter earnings and sales that topped analysts’ expectations, as consumer demand picked up during the back-to-school season and shoppers looked to stock up on the latest denim trends.

Its stock rose more than 2% in extended trading on the news, having closed the day down more than 5%.

Although many apparel companies have been hit by global supply chain bottlenecks, Levi has fared well comparatively due to its diversified manufacturing. Less than 4% of its global volume comes from Vietnam, the company said. Production facilities there have been hard hit by periodic shutdowns during the pandemic.

“Our supply chain really is a source of competitive advantage,” Chief Executive Chip Bergh told CNBC. “We can move product around with a lot of agility. … We’ve been running the business against different scenarios for the last 18 months.”

Here’s how the company did in the three-month period ended Aug. 29 compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:

  • Earnings per share: 48 cents adjusted vs. 37 cents expected
  • Revenue: $1.5 billion vs. $1.48 billion expected

Net income rose to $193 million, or 47 cents per share, from $27 million, or 7 cents a share, a year earlier. Excluding one-time items, the company earned 48 cents per share. Analysts had expected profits of 37 cents per share.

Revenue rose 41% to $1.5 billion from $1.06 billion a year earlier. That slightly topped estimates of $1.48 billion.

Bergh said Levi took a roughly $10 million hit to its revenue due to supply chain issues.

Wholesale revenue grew 45% year over year, driven by strong demand in the U.S. and Europe, the company said. Direct-to-consumer sales rose 34% from 2020 levels, and climbed 3% on a two-year basis, as more shoppers visited Levi’s own brick-and-mortar stores for denim and lounge wear.

Digital transactions were up 10% year over year and up 76% on a two-year basis. They accounted for about 20% of Levi’s total sales.

The company noted that its earnings benefited from Levi selling more items directly to consumers and at fuller price points, rather than using promotions.

The lingering health crisis is still shuttering stores around the world. Levi said roughly 10% of its company-operated stores were closed during the latest quarter, primarily in Asia. Roughly 4% remain shut, it said.

For its fourth quarter, Levi is expecting year-over-year revenue growth of 20% to 21%, while analysts had been calling for a 22% increase. The company cautioned its outlook assumes the health crisis doesn’t dramatically worsen.

It sees fourth-quarter earnings ranging between 38 cents and 40 cents per share, on an adjusted basis. Analysts had been looking for an adjusted, per-share profit of 40 cents.

For the full year, Levi sees adjusted earnings in the range of $1.43 to $1.45 per share, ahead of Wall Street’s consensus estimate of $1.33 per share.

“Our expectation is that holiday is going to be pretty good,” Bergh said. “We’re chasing demand right now, from a supply chain standpoint, to make sure that everybody can put Levi under their Christmas tree.”

The company also said Wednesday that its board approved a new $200 million share buyback program during the latest quarter.

Levi shares are up about 21% year to date, putting its market value of $9.76 billion.

Find the full earnings report here.



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Uber can now track your flight so a ride home is ready when you land


A Uber driver in New York City.

Scott Mlyn | CNBC

Uber is trying to make it less of a hassle to get a ride home from the airport after your plane lands.

The company announced Wednesday that customers can now book a ride up to 30 days in advance. Travelers who choose the more expensive Uber Black or Uber Black SUV options can also put their flight information into the app, which will automatically adjust a reservation if your flight is early or delayed.

Uber said drivers for those reservations will wait up to 60 minutes for you at no additional cost. That means you’ll have extra time to get through the airport and pick up your bags.

Some of the new options may help riders avoid long wait times caused by a driver shortage during the coronavirus pandemic. And it may help Uber stand out against Lyft, at least among people who want to have a car ready right when their plane lands.

The airport booking option will appear in the Uber app under the “reserve” tab starting Wednesday. The features are rolling out to riders at more than 20 airports across the U.S., which are listed below.

Uber Reserve at airports is now available for Uber Black and Uber Black SUV at:

  • Hartsfield-Jackson Atlanta International Airport
  • Charleston International Airport
  • Charlotte Douglas International Airport
  • O’Hare International Airport
  • Chicago Midway International Airport
  • Dallas Fort Worth International Airport
  • Dallas Love Field Airport
  • Denver International Airport
  • Southwest Florida International Airport
  • George Bush Intercontinental Airport
  • William P. Hobby Airport
  • Miami International Airport
  • Fort Lauderdale-Hollywood International Airport
  • Palm Beach International Airport
  • Nashville International Airport
  • Louis Armstrong New Orleans International Airport
  • John F. Kennedy International Airport
  • LaGuardia Airport
  • Orlando International Airport
  • Philadelphia International Airport
  • Phoenix Sky Harbor International Airport
  • Seattle-Tacoma International Airport
  • Ronald Reagan Washington National Airport
  • Dulles International Airport

Subscribe to CNBC on YouTube.



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The 50 best restaurants in the world 2021 from William Reed Media


An annual list of the world’s 50 best restaurants is back — and for the first time, one city dominated the top two spots.

Two restaurants in Copenhagen, Denmark — Noma and Geranium — ranked No. 1 and No. 2 respectively, at “The World’s 50 Best Restaurants” awards ceremony held Tuesday in Antwerp, Belgium.

This marks Noma’s fifth time to top the list since 2010.

Since the list’s inception in 2002, European — and occasionally American — restaurants have produced the world’s top restaurant. This year keeps that streak intact.

The annual ranking, which is organized by the U.K.-based William Reed Media, wasn’t published last year due to the pandemic.

Noma — the world’s ‘best restaurant’ — again

Helmed by Chef Rene Redzepi, Noma is known for its “new Nordic cuisine” that relies on foraged and fermented foods.

An inside view of the Danish restaurant Noma, crowned the world’s best restaurant for the fifth time in the past 11 years.

Thibault Savary | AFP | Getty Images

Redzepi produces three menus every year — there’s the ocean season, the vegetable season, and the game and forest season — the latter which is currently being served for 2,800 Danish krones ($436) per person. Wine pairing is an additional $280, and each menu includes around 20 courses.

The menus within each “season” change, and no two experiences at the restaurant are said to be the same.

Suddenly everyone was asking: ‘What’s going on in Denmark?’

Rene Redzepi

chef and founder, Noma

“In 2010, when we stood at this stage and the words from the speaker blasted out that Noma was No. 1, it was truly a shock to my system — to everybody’s system — and certainly a shock to our reservation system…our website crashed multiple times,” said Redzepi at yesterday’s awards ceremony. “Suddenly everyone was asking: ‘What’s going on in Denmark?'”

After the same restaurants dominated the top rankings for more than a decade, the 50 Best organization announced in 2019 that No. 1 winners could not be voted onto subsequent years’ lists. Noma closed in 2016 and reopened in a new location in 2018, making it eligible to compete again.

Noma’s Rene Redzepi (L) is congratulated by Chef Mauro Colagreco (R) of France’s Mirazur restaurant at the awards ceremony of the ‘World’s 50 Best Restaurants 2021’, in Antwerp, Belgium on Tuesday, Oct. 5, 2021.

Jonas Roosens | AFP | Getty Images

Previous No. 1 winners are called “The Best of the Best.” Noma will soon join the seven restaurants on that list, which include El Bulli in Spain, The Fat Duck in the United Kingdom and The French Laundry in the United States, as well as “Noma (original location),” as it is written on the list.

The full list

The complete list is:

1. Noma (Copenhagen, Denmark)

2. Geranium (Copenhagen, Denmark)

3. Asador Etxebarri (Atxondo, Spain)

4. Central (Lima, Peru)

5. Disfrutar (Barcelona, Spain)

6. Frantzen (Stockholm, Sweden)

7. Maido (Lima, Peru)

8. Odette (Singapore)

9. Pujol (Mexico City, Mexico)

10. The Chairman (Hong Kong, China)

11. Den (Tokyo, Japan)

12. Steirereck (Vienna, Austria)

13. Don Julio (Buenos Aires, Argentina)

14. Mugaritz (San Sebastian, Spain)

15. Lido 84 (Gardone Riviera, Italy)

16. Elkano (Getaria, Spain)

17. A Casa do Porco (Sao Paulo, Brazil)

18. Piazza Duomo (Alba, Italy)

19. Narisawa (Tokyo, Japan)

20. Diverxo (Madrid, Spain)

21. Hisa Franko (Kobarid, Slovenia)

22. Cosme (New York City, USA)

23. Arpege (Paris, France)

24. Septime (Paris, France)

25. White Rabbit (Moscow, Russia)

26. Le Calandre (Rubano, Italy)

27. Quintonil (Mexico City, Mexico)

28. Benu (San Francisco, USA)

29. Reale (Castel di Sangro, Italy)

30. Twins Garden (Moscow, Russia)

31. Restaurant Tim Raue (Berlin, Germany)

32. The Clove Club (London, UK)

33. Lyle’s (London, UK)

34. Burnt Ends (Singapore)

35. Ultraviolet by Paul Pairet (Shanghai, China)

36. Hof Van Cleve (Kruishoutem, Belgium)

37. SingleThread (Healdsburg, California, USA)

38. Borago (Santiago, Chile)

39. Florilege (Tokyo, Japan)

40. Suhring (Bangkok, Thailand)

41. Alleno Paris au Pavillion Ledoyen (Paris, France)

42. Belcanto (Lisbon, Portugal)

43. Atomix (New York City, USA)

44. Le Bernardin (New York City, USA)

45. Nobelhart & Schmutzig (Berlin, Germany)

46. Leo (Bogotá, Colombia)

47. Maaemo (Oslo, Norway)

48. Atelier Crenn (San Francisco, USA)

49. Azurmendi (Larrabetzu, Spain)

50. Wolfgat (Paternoster, South Africa)

Europe dominated this year’s list, with more than half of the ranked restaurants located there. Asia took eight slots, with Singapore’s Odette (No. 8) awarded the highest position on the continent.

Singapore’s Odette was one of two restaurants in Asia voted into the top 10 of “The World’s 50 Best Restaurants” list for 2021.

Nicky Loh | Bloomberg | Bloomberg | Getty Images

Eight restaurants in North America made the cut, with Mexico’s Pujol named the “Best Restaurant in North America.” South America took six slots, with two — Central and Maido, both in Peru — named to the prestigious top 10 list.   

Africa edged onto the list, with South Africa’s Wolfgat, taking the 50th slot.

Spain left the awards with six restaurants etched onto the list — the most of any country. More than half are located in the Basque Country, an autonomous region and renowned culinary powerhouse near the French border.

How the list is made

Workers prepare drinks and dishes at Barcelona’s Disfrutar restaurant, ranked No. 5 on the 2021 list of “The World’s 50 Best Restaurants.”

Xavi Torrent | Getty Images News | Getty Images

“For one person, the food may be everything; for another the wine list or the atmosphere may play a more important role,” he told CNBC. “There is no set criteria — we don’t believe there is, or should be, a type of restaurant that features in the 50 Best lists.”

Academy members must vote for at least four restaurants outside of their regions. To accommodate restricted travel and dining opportunities caused by the global pandemic, the 2021 list consisted of votes cast in January 2020 — which were never published — as well as updated regional choices, said Drew.

Other awards



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The Fed (and Central Planning) Are Fueling Substance Abuse



Karl Marx’s Communist Manifesto, included ten planks required to create a socialist dictatorship. Number five on the list is “Centralization of credit in the hands of the state, by means of a national bank with state capital and an exclusive monopoly.” America’s Federal Reserve satisfies this requirement, especially the modern version, which grows exponentially in size, scope, and power, engineering financial repression “for governments to increase tax income and domestically-held debt.”

While socialism continues to creep from university classrooms to replace once-upon-a-time laissez-faire in everyday America, opioid use has grown to be termed an epidemic.

Willie Giest sternly told Sunday morning viewers of his Sunday Today show that last year ninety-three thousand people had died of drug overdoses, a 30 percent increase from 2019. He went on to say the biggest killer was a synthetic opioid called fentanyl. 

Reporter Jacob Soboroff interviewed a fire department captain and a nurse practitioner in San Francisco during a ride along. The two civil servants rattled off statistics which in their minds proved that income inequality was the cause of the opioid epidemic: only 5 percent of San Franciscans are black, while 25 percent of opioid overdoses are people of color. Less than one percent of the city’s population is unhoused, but that population comprises 30 percent of overdose victims. 

Mark Twain’s “There’s lies, damned lies, and statistics” comes to mind. The vast majority of opioid overdoses are white and have a place to live, but still have lost all hope of a productive life, illustrated by a married homeless couple who told Soboroff they use Fentanyl because a $5 supply sates their combined habit for a day. “A quarter the cost of mainlining [heroin],” the wife happily added. 

The Institute of New Economic Thinking is on the same page with the Sunday program. “Add death by opioids to the list” of ailments caused by growing economic inequality that includes higher murder rates and lower life expectancy. Sociologist Shannon M. Monnat wrote in a January 2019 working paper for New Economic Thinking ,“Nationwide, mortality rates from drug overdoses and drug-induced diseases increased 200%, from 6.8 to 20.8 deaths per 100,000 population between 1999 and 2016 (CDC, 2017a).” 

She comes to the conclusion that “the highest drug mortality rates are disproportionately concentrated in economically distressed mining and service sector–dependent counties with high exposure to prescription opioids and fentanyl.”

While kinda-sorta American capitalism is made to blame for inequality and therefore the opioid crisis, the economic system most associated with substance abuse is communism, with Russia as exhibit A. 

In an article entitled “Drinking and Smoking Literally Killed the Soviet Union” Andrei Tapalaga writes for History of Yesterday, “after the end of the Second World War, Stalin encouraged citizens to consume alcohol to increase the economy of the country.” Later, the government wanted to control drinking like it controlled everything else. 

Tapalaga’s great-grandfather told him that in the early 1980s people weren’t allowed to own more than one bottle of spirits inside their house. Violators with excessive amounts of alcohol would be fined or even sentenced to prison depending on the amount of alcohol they had on them, writes Tapalaga. 

In a 2013 article for The Atlantic, Stan Fedun quoted an old Soviet joke to illustrate the people’s displeasure with Mikhail Gorbachev’s antialcohol campaign: “There was this long line for vodka, and one poor guy couldn’t stand it any longer: ‘I’m going to the Kremlin, to kill Gorbachev,’ he said. An hour later, he came back. The line was still there, and everyone asked him, ‘Did you kill him?’ ‘Kill him?!’ he responded. ‘The line for that’s even longer than this one!’”

Despite force and propaganda, “countries from the former Soviet Union are still the biggest consumers of alcohol to date and once again a good percentage of the present Russian economy does come from alcohol consumption,” Tapalaga concludes. 

Fedun wrote in The Atlantic, “Stalin used vodka sales to help pay for the socialist industrialization of the Soviet Union. By the 1970s, receipts from alcohol again constituted a third of government revenues. One study found that alcohol consumption more than doubled between 1955 and 1979, to 15.2 liters per person.”

He provides a damning quote from Russian historian and dissident Zhores Medvedev, who argued in 1996, “This ‘opium for the masses’ [vodka] perhaps explains how Russian state property could be redistributed and state enterprises transferred into private ownership so rapidly without invoking any serious social unrest.”

In a 2011 New York Times opinion piece Mark Lawrence Schrad wrote that Russians consume on average eighteen liters of pure alcohol per person. “Thanks in part to lifelong heavy drinking, the life expectancy for the average Russian man is now about 60 years, just below that of Haiti,” Schrad wrote. 

While the US press harps on inequality, there is no mention of Marx’s fifth plank, i.e., the Federal Reserve. “The creation of money out of thin air, or legal counterfeiting, by central banks,” wrote Frank Hollenbeck for mises.org, creates “undesirable and unjustified source of income inequalities.” He continued, “It should be no surprise the growing gap in income inequalities has coincided with the adoption of fiat currencies worldwide.”

Hollenbeck makes a point Murray Rothbard made in class many times. Those who receive the money first from the Fed benefit at the expense of those receiving the money last. The rich and connected receive the money first, the poor receive it last and are forced to pay higher prices. 

Writing in 2014, Hollenbeck explained, “Since the creation of a fiat currency system in 1971, the dollar has lost 82 percent of its value while the banking sector has gone from 4 percent of GDP to well over 10 percent today.” 

Even the New Economic Thinking folks understand. “The low interest rates, in turn, fuel asset-price bubbles, creating wealth gains for the rich, and over-indebtedness for the bottom 90% of households, which use cheap credit to finance essential expenses on education, medical care and housing,” writes Servaas Storm. “This reinforces wealth and income inequalities, and pushes up asset prices even more, but this does not lead to higher economic growth and better jobs, because the richest 10% use their savings and wealth gains not for investments in the real economy, but to speculate in financial markets.”

While opioid overdoses and deaths stack up, the Federal Reserve’s balance sheet has grown as well, from $995 billion in September 2008 to just short of $8.5 trillion in September of this year. During the same time frame, the Dow Jones Industrial Average has risen from 14,500 to 34,800.

The Fed’s liquidity is mother’s milk to the rich, leaving the lowest on the economic scale to suffer.



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