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This article was written by Ludwig Laborda and translated by Jesús Renzullo, Local Coordinators of Estudiantes por la Libertad in Venezuela.

June 2nd, 2016 became quite a tense day in Caracas, Venezuela. Many people were waiting for their turn to buy food, but they were not served. This provoked much tension that ended up in a protest. They tried to march to the Miraflores Presidential Palace near the Fuerzas Armadas Avenue, to demand a solution for the food supply shortage, but the only answer they received was plain repression from the National Guard. Venezuela Blog

Events like this could —and will— happen again in the country. On the one hand, price controls drown any entrepreneurial activity, since they prevent entrepreneurs from even recovering the resources invested in the manufacturing of price-regulated goods. On the other hand, foreign exchange controls make it much more difficult to obtain the raw materials needed for production. Also, in general, there are few guarantees for private property rights, which transform Venezuela into an inhospitable environment for investment.

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The following was written by Justin Bennett, a student at Southern New Hampshire University. 

With California and New York raising the minimum wage (over the next few years) to $15 per hour, many are redoubling calls for the federal government to follow suit. And why not? Don’t we all deserve a “living wage”?

SNAP logoCertainly this is a nice thing to hope for. But, whether or not such a thing can be achieved through legislation is a reasonable question to ask. The back and forth on the economics at play here is extensive. But in reality, supply and demand do matter. Arbitrarily increasing wages for the least skilled, least educated workers can only be made possible by increasing their employer’s costs. These costs are usually not absorbed by the business, but rather passed down to the consumer and the employee. The likely result is higher prices and reduced staff levels over time.

Expecting a positive outcome by making employees more expensive for businesses already struggling to make a profit certainly is a strange argument. But the most curious argument I’ve heard for the minimum wage is that we can expect a reduction in Supplemental Nutrition Assistance Program (SNAP) participation, otherwise known as food stamps, as a result of higher wage floors. Sadly, the facts say otherwise. (more…)

The following was written by Justin Bennett, a student at Southern New Hampshire University. 

maxresdefault (2)A common misconception in economics is the idea that we should fear new technology. Because new technologies can disrupt existing industries, the story goes, such technology harms the economy as a whole by contributing to unemployment.

To combat this supposed destruction, those who stand opposed to new technologies argue for worker protections in order to prevent wage reductions and layoffs. Such protections can take the form of labor laws, trade restrictions, or employee unions. Regardless, the “cure” here is worse than the stated disease because, in this case, no disease actually exists.

The fundamental purpose of any innovation is to make things easier, more efficient, and less costly. This leads to higher production levels, which create more revenue for firms and more value for everyone in the economy – even those workers who are displaced. While these labor-saving capital improvements do make some kinds of work obsolete, they also make the work that’s left to do more productive and therefore valuable. This is good for everyone, but sometimes it’s hard to see why. (more…)

Disclaimer: This has nothing to do with Chubbies shorts at all. I’m simply using the shorts as an analogy.

As a law student, most of my experience with the intellectual property regime has been fairly removed and abstract. But I also happen to have an awesome big brother who is a genius of a businessman. His new business was doing stunningly well, although, he recently got sued. Why? Another company is alleging he has infringed upon their intellectual property.

Chubbies_short_shorts_for_menI was never certain where I stood in the whole IP debate, and I am still not certain where I stand now. But, with one phone call, my brother made me realize that there are serious problems with our current approach to IP. Indeed, there are some forms of “intellectual property” that cause a hell of a lot more harm than good.

Struggling to find something to compare my brother’s situation to, I landed on Chubbies shorts as being a pretty great analogy. Chubbies, the frattiest thing known to mankind, are in pretty hot demand. Now, let’s say my brother — who we can imagine as the model of a frat boy — saw an opportunity in creating his own brand of short shorts.

Since he has pretty good business sense, he made sure to roll out his own brand of shorts in time for Christmas sales. Turns out Chubbies, the brand everyone wanted to put under the tree, couldn’t meet demand, so my brother’s shorts were right there to pick up the slack and he did pretty well for himself throughout the holiday season. Fear not, for he made everyone’s Christmas wish for short shorts come true… and better yet, for half the price. After all, it is always fun to imagine your favorite frat boy donning a pair of Chubbies on christmas morning… (more…)

5846918999_7a6aaafd15_bA common sentiment with the American progressive movement is the idea that the middle class in this country is shrinking. It is true that there are fewer households classified as “middle class” today than in the past. However, it’s misleading to construe this fact as anything to be worried about. As Brookings Institution Fellow Scott Winship, states in the National Review, “[T]he share of households with income that puts them in the middle class or higher was 76 percent in 1970 and 75 percent in 2010, which is statistically indistinguishable. In other words, the middle class only declined because part of it moved into a higher class.

So why all the concern from the left if many people are actually getting wealthier? Well, according to a National Bureau of Economic Research study entitled “A Second Opinion on the Economic Health of the Middle Class,”[T]here are several key variables which researchers often fail to properly adjust for when analyzing class incomes.” These factors include: (more…)