Publication Team Elias Hage
Editor-in-Chief •
Anthony Halstead Copy Editor •
Monica Recto Layout Editor •
Courtney Shingle Executive Assitant •
Jacob Baugher Cover Artist •
Michael Sherman Business Manager
Featuring Joseph Danaher Cover Model
Table of Contents
Letter from the Editor -4-
All You Need is Love... and Science -5-
For Your Consideration: Immigration -8-
Obama(doesn’t)Care - 11 -
Lessons From an Economist: Book Review of Why Capitalism? - 14 -
There’s no such thing as a free lunch. -Milton Friedman
March letter from the editor. Hello, Barons! Welcome to another new edition of the Gadfly! One question I am often asked is, “Does the Gadfly try to incite controversy?” My answer is, believe it or not, a resounding no. What is allegedly so controversial about this publication? The response I have usually been given is that “[insert article or statement here] is not in line with the Church!” I find this response particularly unsettling (especially when I’m told not to publish my fellow student’s work unless it’s in complete alignment with the Church). So, this controversy is based upon citing anything that is found contrary to the church? When I signed the $30,000/yr bill to attend Franciscan, I did so to attend an academically challenging University that would allow me to become well rounded in all areas, consequently allowing me to further defend my faith – and I’m sure I’m not alone. Should we not immerse ourselves to various thoughts to further strengthen our own? For example, if we are not aware of the work and thought of Margaret Sanger – the founder of the birth control movement – beyond what is on Patheos, and if we are not aware of how the pro-choice community can distort her thought to make her sound angelic, then we are just another group of angsty college students participating in a “movement” - nothing more. Why economics? Over the past couple years, I have dived into the world of economics and neuroeconomics. Our current economic state got me interested in how the economy works and why the market responds in the way it does. The theories are endless. You have thinkers who believe supply and demand does not exist, that stimulus packages improve the economy, or that the “invisible hand” of the market is all that we need. There are plently of professionals attempting to influence economic theory without ever having formally studied the field. But, what is the science of the matter? I don’t care what Karl Marx thought was right; I want to know what the data shows to be right. And with that I welcome the work of four Franciscan econ students to share their insight on the science of the matter.
Elias Hage 4
All You Need is Love... and Science Joseph Danaher Imagine you are on an operating table getting your chest cut open so that your heart can be incised and your main arteries unclogged. The lead surgeon conducting the procedure has his Ph.D. in economics. I mean, he is a doctor, right? Most important of all, before the anesthesiologist puts you under, the “doctor” says to you, “I care most dearly about your ailment, and I have a burning hope that we can change this. Say it with me – yes we can.” I don’t know about you, but I would hope to God that this was all a nightmare I was having while an actual medical doctor was taking care of the operation. Clearly there are further concerns than just the intentions of those who are trying to help. One can have all the love in the world, but when he is forced to confront a tragedy he must fix, he must be able to do more than just mean well. We hear a lot of talk today about how “it’s the thought that counts,” or “it’s not whether you win or lose, but how you play the game,” or many other ideas about how results do not matter that much as long as we are trying. It seems as if this thinking has made its way into our political and economic realms and made us content with insufficient hypotheses and implausible solutions. We who believe in there being some kind of moral tenure to the motivation behind an act and/or the act itself are appalled at the ideas that a consequentialist ethics supports with views like “the end justifies the means.” But we must all admit that consequences do matter, and it matters that we try our best to make sure that our actions will result in good outcomes. I do not find it very loving for me to try to conduct someone’s open heart surgery, no matter how much I care about them and intend their betterment. Not only must we find the foresight to predict the outcomes of our actions, but we must also find it when promulgating any ideas, theories, or off-the-cuff thoughts to others. The ancient Greeks also struggled with finding the right perspective for practical matters. Plato came up with an idea of the state in which a group of elite 5
philosophers would lead an authoritarian regime so that they could guide all men toward the most flourishing lives possible. The problem was that Plato came up with this notion by thinking without doing nearly as much observing. Twentieth century philosopher Karl Popper would later blame him for providing the intellectual source for tyrants to ground their claims on. Fortunately for political thought and all scientific disciplines, Aristotle came along and established theories that were intimately tied to actual, real-world experience. He therefore produced feasible ideas as opposed to hopelessly romantic notions, providing support for mixed government, private property, and a strong middle class. Both thinkers sought the same ends, but they came up with entirely different means to get there, the latter of which were much more effective. When it comes to economics, there are a lot of tough issues that we as a society face, and good intentions just do not cut it. There have to be solutions that will work. Take, for instance, the subprime mortgage crisis that started in 2007 and helped spur on the Great Recession of 2008. What could cause such a disaster? Good intentions to be exact. There were four main sectors at fault in which people strove toward noble goals, yet they ended up harming the whole country. The government had encouraged and incentivized private banks and the government-sponsored Fannie Mae and Freddie Mac to take on loans that were not at all reliable. They were trying to help poor Americans have the wonderful opportunity of owning a house. I’m sure that the over 8,000,000 people who soon lost their jobs due to such good-hearted policies found it really easy to buy a house. I’m sure they felt the love of the politicians deep down in their hearts. Secondly, the banks were trying to do their job in being profitable business enterprises. Although the government is certainly to blame for encouraging their risky conduct, the banks themselves were also irresponsible. They could have been more cautious in how they made their
odds with much more knowledgeable economists. If I want to figure out how to stimulate economic growth, I am much more likely to trust the word of economists over that of politicians. After all, they are “economic doctors.” We fall into this trap by listening to other intellectuals who also have no expertise in economics, such as social critics or academics in other fields. But an even greater question would ask if economists themselves are capable of providing the solutions for all the economic issues we face. The President even has economic advisers who have some influence on policy. Can economists’ good intentions combined with their expertise lead to success? If we want to be honest about human reality, we would have to realize that not even the “economic doctors” could prepare the way for progress from the top-down. Nobel Prize-winning economist Friedrich Hayek demonstrated a very important point in his article “The Use of Knowledge in Society.” He showed that no matter how good the intentions any group of experts has, it is absolutely impossible to plan out a whole economy’s progress from a centralized level. They will never be able to have the requisite knowledge to develop the proper foresight that their decisions would require. They would always end up short because they would not have the intricate, complex knowledge that each individual small businessman, farmer, or manufacturer has of his local situation. Good intentions would create plans filled with countless gaps, eventually leading us into depravity. Good intentions have to come face-to-face with the reality before us if we are to ever make the world better. Love must meet science. The desire to provide for people must meet humility as it sees that there are limits and better ways. It is not very loving or helpful to make grandiose schemes that end up making people worse off than when our involvement started. Good ends will not justify evil means, but good means will not rectify tragic results. The most truly loving, well-intentioned thing we could possibly do is to figure out what actually works and implement it. If we truly care, we will investigate, calculate, learn when to not get involved, and not promote ideas and solutions that we have not thoroughly discovered valid grounds for.
progress. Instead they took chances that resulted in a collapse in which everyone in the whole country was forced to foot the bill to resurrect them. Thirdly, there were the people who let their desire to better provide for their families cloud their judgment as to what was a prudent, feasible investment. Owning one’s own house is great, but not when there is a high risk of going bankrupt; there are other housing alternatives. Last but not least, as economist John Taylor points out, the Federal Reserve lowered their rates to help avoid deflation – when the interest rate drops, causing the value of debts to rise. The Fed’s actions ended up encouraging extra investment which led to artificial growth. The only thing the market can do with artificial growth is spit it back out because it has no room for it. The above example gives us a perfect illustration of just how little intentions can actually accomplish when they are not met with proper capability, knowledge, expertise, and foresight. They say the path to hell is paved with good intentions, and we certainly know the path to depressions and recessions is. Lest we continually fall into demise, we ought to vote for politicians who do not just try to help people but
“They say the path to hell is paved in good intentions” for those who actually can and do. It is not enough to just want everyone to have a house, health care, or every other need and want satisfied. It is much more complex than that, and it is unrealistic to think that we can just make do with hope ungrounded in hard facts. This brings us to another problem, though. Can politicians possibly have the requisite knowledge to make the decisions we ask them to and provide for our countless needs? I personally do not think they can, and I base that not on mere feeling but on facts. Asking a politician to do everything under the sun for the economy is like asking the economist to do your open heart surgery. So many times we listen to a politician’s explanation of economic things even if he is at 6
For Your Consideration: Immigration Joseph Zenge and transparent immigration policy is that it will be detrimental to taxpayers. There has been no scientific, empirical study ever conducted to ever conclude that a larger number of immigrants would hurt American taxpayers. There are some huge problems with this argument. First, illegal immigrants usually receive lower pay than natives and legal immigrants. Columbia University economist, Francisco L. Rivera-Batiz, says that many illegal workers do not complain about their low wages because of the primary fear that they will be discharged from their current place of employment and deported. Rivera-Batiz argues that the current state of affairs regarding immigration allows employers to possess a monopsony over the section of their workers who are undocumented. He also goes on to say that employers want to keep the situation the way it is because when workers make the transition from illegal to legal, they then possess the power to command a higher wage. He also states that there is a one dollar increase (about 15%) for workers when they become legal citizens. Legal workers also possess more mobility in respect to the capacity to move between current jobs to more desirable states of employment. Second, if immigration policies were reformed correctly, current illegal workers would be replaced by legal workers who would pay taxes and actually contribute to the national economy. Various studies actually conclude the opposite of the assumption that a larger number of immigrants would hurt American taxpayers. In fact, they state that the current system imposes more costs on the taxpayer. Actually, a more open and transparent system would lead to a gain for U.S. households, with the numbers ranging from $170-$280 billion. These new policies would create a surplus gain because of the additional legalized labor, which would have a quite positive effect on the national economy. The 2006 Comprehensive Immigration Reform Act would have had an enormous and wonderful effect on the federal budget of about $12 billion. The Congressional Budget Office stated
Every year, there are vast numbers of people who travel to the United States looking for a better life. Collectively, these individual human persons are known as immigrants. Many of these immigrants come to America for many different reasons. Some come for better jobs, a higher standard of education, and more opportunities. Some come to escape religious and/or ethnic persecution caused by their governments or even violent terrorist organizations. Some come because they have family already living in the country they wish to immigrate to. There are many reasons why people immigrate, but the one, uniting factor of these immigrants and their reasons is that they are motivated to improve their standard of living and live happier lives. While many of these immigrants are able and willing to move to the various different nations of the world (particularly the United States) in order to improve their standard of living, there are many different ways in which they have to do this. One might ask what it means to say that immigrants move in many different ways. These “different ways” that will be talked about are not referring to the various modes of transportation in which immigrants arrive at their desired destination. It refers to the fact that some immigrants enter a country legally and some enter illegally. These may be confusing to some people because one might ask, “Why is it illegal for a human person to simply move from one geographical distinction to another?” Unfortunately, there are many reasons that bureaucrats and public intellectuals will use to attempt to convince people that immigrants should be limited or even completely kept out from entering the United States. Because of this, there are an estimated 10 million or more undocumented immigrants in the United States. It is an unfortunate fact that many politicians and others seek to keep immigrants out; however, it is a fact, and they present many flawed arguments in an attempt to support their xenophobic bias. One argument against creating a more open 8
that if the act would have become law, then there would be an increase of $56.3 billion in federal spending, but that would be offset by an increase in tax revenues of $65.7 billion. Another argument claims that more immigration will create a larger number of people on welfare. Many people claim that these immigrants will immediately apply for welfare when they have become legalized. However, immigrants who newly arrive in the United States are not eligible for welfare and other forms of government assistance, unless they possess refugee status. The current law states that immigrants (with the exception of refugees) cannot apply for various forms of government assistance until they have been legal residents for five years. In fact, there was a significant drop in the number of immigrants using welfare after Congress modified welfare eligibility rules in 1996. Also, most immigrants don’t receive welfare as less than 1% receive government assistance. The percentages of these immigrants receiving government assistance has significantly declined in recent years. For example, only 0.7% use AFDC/TANF (Aid to Families with Dependant Children/Temporary Assistance to Needy Families). Only 11.6% of non-citizens and 10.8% of naturalized citizens use Medicaid. Only 6.2% of non-citizens and 3.9% of naturalized citizens use food stamps. With regards to the state level, there are many different and complex rules from state to state. Many people also argue that immigrants are taking jobs from American citizens. However, this is false because many of these immigrants have a higher role in the labor force than native-born citizens. These same people also say that immigrants abuse the welfare system. While it is probably true that some immigrants abuse programs for government aid, it must also be noted that many native-born citizens abuse the system too. These people who are critical of immigrants using welfare usually hold a double standard and it is rare, if it ever happens, that these same people would criticize native-born workers who abuse the welfare system. This argument has no factual basis and usually functions in the capacity of a purely rhetorical device that is used by politicians as a mere attempt to gain support for political cam-
paigns. In one more argument, many people simply make the claim that people are breaking the law by crossing the border without any proper identification and they should be punished as a result. They claim that it shouldn’t be that hard to understand what the word “illegal” means. However, just because there is a law in place does not mean that the law is always correct. Holding such a view that something should be followed simply because it is a law would pertain to a form of strict legalism where people follow laws without always knowing the philosophical reasons for why the law is even there in the first place. This law ignores the fact that people seek to better their lives for many different reasons, such as better jobs, better education, more opportunities, and even to escape from religious/ethnic persecution. These laws, in their fundamental ideologically flawed structure, keep immigrants isolated in a geographical prison where there is sometimes no hope to rise up from the mass poverty or persecution which keeps them restricted. With more open laws, these people may one day have a more hopeful and brighter future. There are various, other claims that people make about immigrants; however, none of them prove to be true. In the end, it really comes down to a battle of semantics and whether it is acceptable for someone to deride another human being with the term “illegal.” It is unconscionable that one human being would ever call another one illegal. While I am not calling for a complete laissez-faire border (let’s remember that nations do possess the right to protect their borders), we do need some serious reforms (a.k.a., comprehensive immigration reform) to the current system in order to treat our non-native brothers and sisters with the respect that they deserve. Immigrants are a large benefit to the economy and society, but even more deeply, they are also human persons who possess the same level of dignity as any other member of our wonderfully diverse and multicultural human family. In short, we need comprehensive immigration reform as the remedy to our current dilemma. God bless. 9
Facts do not cease to exist because they are ignored. -Aldous Huxley
Obama(doesn’t)Care Mariette Van der Wegen and therefore wherever Congress puts the tax has no influence on the division of taxes. However, both employer and employee will share the increase in taxes, since the employee will pay for the increase in costs by receiving lower wages. The sample principle is for consumers and businesses: prices for consumers will rise as costs for businesses rise. Secondly, the ACA will destroy jobs and reduce wages. As basic economics tells us, raising the costs of hiring discourages job creation. Many people are insured through their employers, which normally is a cheaper way to obtain health insurance. However, the ACA creates a tax penalty for employers who cannot provide the government set standard of coverage for their employees. The impact of this new law is a reduction in hiring of employees. Firms with 50+ employees need to provide this new health insurance; hence employers will lower their hiring to 49 employees. Therefore an increase in the unemployment rate is inevitable. Moreover, the increase in costs decreases company profits, since employers will have to allocate a bigger percentage of the annual revenue towards employee health insurance. Employees are compensated for their work by benefits and wages. If there is an increase of costs in the benefits the wages will go down, since the employers will have to compensate for the extra costs. Every employee working 30 or more hours a workweek needs to have health insurance provided by their employer, so employers will lower work hours or hire more part-time workers. Combining point one and two, the decrease in jobs has a negative impact on the economy, since it decreases the total tax revenue and it decreases wages. The ACA also increases costs for consumers, therefore lowering the standard of living. These negative results of the ACA slow down economic growth, which is much needed to recover from the Great Recession. The ACA will provide health insurance, regardless of pre-existing conditions, which will rack up
President Obama mandated that the Affordable Care Act (ACA), also known as ObamaCare, went into work at the beginning of this year. This controversial addition to the current health care system has caused more problems than it helped people obtain health care insurance. Current government health programs, such as Medicaid and Medicare, already insure many people and these programs are very poorly designed and executed. Therefore, this new Affordable Care Act is merely adding a new health insurance program to an already broken insurance system. The ACA states that every person living in the United States needs health insurance and it offers subsidies for certain groups of people that do not have the ability to pay for it. ObamaCare’s goal is to help the American people get access to affordable and quality health care; however, it has serious drawbacks. I will address a few of the most prominent economic drawbacks of ObamaCare in this article. First off, ObamaCare will increase taxes and add new taxes, which results in a tax revenue of more than $500 billion over the upcoming 10 years, as stated in C.S. Dubay’s article on ObamaCare and New Taxes. This figure will only rise as time goes on. The increase in taxes is money is taken from hardworking Americans, who now have less money to spend and invest, and transferred to government-run entitlement programs and subsidies. Most of the hardworking Americans will never see a dime of the money they paid into the system, because they are not eligible to receive any of these government funded programs. The tax increase decreases the incentives to earn money; therefore it discourages people to work and save their money. On top of that, costs of goods and services will go up, because economic theory shows that market forces of supply and demand determine who pays the tax. It is not solely the consumer, nor solely the producer who pays for taxes, but both parties divide the costs. Congress does not regulate the market forces 11
implemented in this system and its procedures are immoral. Catholic hospitals refusing to perform and refer for abortions are put in an impossible position to practice their faith. Catholic hospitals should be exempt from the subsidies and acceptance of elective abortions and of health insurance providers that include abortion coverage. Health care providers and personnel should be protected from ObamaCare when it conflicts with their faith and morals. There is another threat facing our society with ObamaCare being legal, which is already an issue in multiple other countries. The total amount of elderly people in the United States is increasing because the baby boomers are aging. This creates another burden on health insurance systems, because there are less people able to pay into the system. This leads to the arguments about the ethics of life. Since there are so many elderly and our current government is increasingly secular, pro-euthanasia arguments will be highly favored, solely on monetary grounds. It would be a simple way to cut health insurance costs if there were less elderly people to take care of. This is completely immoral, but this should be a reality check for everyone favoring the new laws created by the ACA. The goal of helping the American people have health insurance increase their lifespan is actually threatened by the costs of ObamaCare and its poor design. Concluding, ObamaCare is intended to make health insurance affordable for everyone living in the United States and increase quality of life. However, there are many economic reasons that show that the Affordable Care Act is actually a threat to society: unemployment rates will go up, prices will go up, wages will go down and the sanctity of life is threatened under the ACA.
the costs of health insurance programs. Government-run health insurance is a PayGo system, which means that someone spends the money paid into the system by someone else. This means that those who currently work are paying for those who are currently receiving benefits. The increase in people receiving benefits, due to lack of screening for people with pre-existing conditions, will transfer the burden of paying into the system to those who are currently employed. Therefore, there must be either more people paying into the system or an increase in premiums. Since there are not enough people able to pay into this system, the premiums have gone up. The whole goal of ObamaCare. which was to make health insurance more affordable, is not met. Young adults are hit hardest by the increase in premiums, because with increasing unemployment and lower wages people are not able to afford health insurance anymore. The addition of another government health insurance program will add to the government deficits, not help the American people. Already existing government programs have created an enormous government deficit, which still has not been fixed. Medicare and Medicaid are both run without a budget and their costs increase every year. Adding another program
“Even individuals who choose life will have their tax dollars spent on abortions.� to these two already failing programs will only increase the deficit. The increase in taxes needed to fund ObamaCare comes nowhere near fixing the already existing deficit, created by other government-run entitlement programs. In addition to the increase in deficit, ObamaCare offers federal assistance to those who choose to have elective abortion procedures done. Even individuals who choose life will have their tax dollars spent on abortions through ObamaCare. There is no guidance programs or conscience protections 12
The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.
-F.A. Hayek
Lessons From an Economist: Book Review of Why Capitalism? Kenny Senour United States following World War II, and ends his book by inferring that inflation will eventually return to the economy. Meltzer begins by explaining that each time a financial crisis occurs, opponents always seem to hint toward the end of the capitalist system (2012, p. 3). However, capitalism is an economic system which has been through hostile governments, the threat of communism, and the continued stagnation that government regulation encourages in market economies. Many of those in the media do not convey or perhaps understand that no two capitalist systems are the same. Capitalism grows and develops in each culture in a different way and can therefore adapt to the variety of cultures throughout the world. Meltzer points out that even communist China has embraced the notion of a free market economy and has since experienced significant economic growth (2012, p. 3). Meltzer also explains the Kantian principle that capitalism recognizes, which is that because man is a morally imperfect being, so too will the institutions be which man creates and lives in (2012, p. 5). Capitalism recognizes this reality, while its various alternatives do not. The greed and corruption which seems to be commonly present in capitalist economies is a result of the actions of individuals more than it is of the system itself. While it is not a perfect system, it does not expect humans to be perfect, in contrast to capitalism’s Marxist alternatives. Meltzer states that “Capitalism permits choices and the freedom to make them” (2012, p. 17). This is a simple yet profound point made by the author, as it shows that capitalism is in line with the notion of democracy and promotes individual freedoms without hurting overall economic growth. In a socialist system, the people are in a sense given what others above them have already chosen for them (Meltzer, 2012, p. 17). The chapter goes on to explain the postwar growth associated with an increasingly free market economy as well as how Democratic captilism permits voters to choose how income levels and
In view of the recent financial crises that have been occurring across the globe, the media has turned the opinions of many toward a negative viewpoint on the system of capitalism. As banks collapse and credit markets freeze, many people are looking for the source of these major economic problems and have thus chosen to blame capitalist markets for the recent events. In the book Why Capitalism?, Allan H. Meltzer makes the strong argument in favor of capitalism and explains why it is not capitalism, but rather the overregulation by governments, that has in fact been doing the most damage to economic systems throughout the world. Meltzer argues that “Democratic capitalism” has three outright strengths that are unparalleled against the alternatives to the economic system. In the preface of his book, Meltzer explains that Democratic capitalism allows individual growth without stifling economic growth and that it can adapt to a diversity of different cultures (2012, p. 1). He also points out that while opponents of capitalism argue that it promotes an inequality of income distribution, in a Democratic system voters choose the tax rates which satisfy the majority of citizens in a nation (Meltzer, 2012, p. 2). Another point Meltzer brings up in his introduction is that the alternatives to capitalism seem to commonly promote some type of utopian vision of mankind, yet the events that occurred in the recent 20th century showed that this vision commonly comes with brutal enforcement and oppression, such as the mass murder that occurred under the rule of the Soviet Union (2012, p. 2). While capitalism is not by any means a perfect solution to mankind’s problem, Meltzer understands that it is a system that “works with humans as they are” and not as they should be, as in the case of capitalism’s alternatives (2012, p. 2). Meltzer then goes on to address the question itself, “Why capitalism?” and presents various strengths in his first chapter. He discusses the effects of government regulation, the welfare state, why governments are now faced with massive deficits, the growth of the 14
that are not in line with the government’s classic role of merely providing national defense, traffic rules, and a police force (Meltzer, 2012, p. 32). Related to the increased government regulation in financial markets, the too-big-to-fail policy was embraced, in which the government would prevent the failure of large banks in the event of a crisis in order to minimize the negative economic impacts (Meltzer, 2012, p. 34). However, during the financial crisis of 2008, the government failed to uphold its’ formerly customary policy when it let Lehman Brothers fail, leading to a massive amount of market uncertainty in which the banks seemingly could no longer rely on the government to bail them out (Meltzer, 2012, p. 34). Such a case illustrates the effects of the regulated welfare state emerging in the United States and in markets throughout the world. The crusade for “fairness” and “justice” has weakened the role of capitalism in the U.S. market and has resulted in a massive government spending program in which regulation seems to permeate every aspect of the economy, from banks and financial institutions to education and healthcare. Meltzer concludes that the U.S. formerly avoided massive expenditures by keeping a strict post-war budget. However, as America moves into the 21st century this mindset has ceased to exist. Deficits continue to rise with no attempt for a balanced budget (2012, p. 62). The root of Meltzer’s criticisms about the increased role of the government in preventing bank failures and manipulating interest rates may be summed up in his own words: “Capitalism without failure is like religion without sin” (2012, p. 131). In this simple comparison, Meltzer conveys the fundamental idea of capitalism. If businesses, firms, banks, companies, and other institutions are not efficient enough to compete in the market, they should be allowed to fail. Competition encourages innovation and ultimately more freedom for the individual who has the power to choose. Capitalism promotes incentive and efficiency in the economy. If there is one lesson to be learned from Meltzer, it is that regulation, however well-intentioned, can at times be excessive and lead to market stagnation. In this way, Meltzer answers his simple question, “Why capitalism?”
are distributed rather than the government choosing for them. Another important point is that capitalism encourages innovation by rewarding those who create a more efficient and useful product, which in turn leads to more economic growth (Meltzer, 2012, p. 22). The author concludes by reiterating the point that “Capitalism in not a utopian system, but there is no better system for providing growth and personal freedom” (Meltzer, 2012, p. 27). This point is illustrated by Meltzer’s arguments against capitalism’s alternatives and his examples which show how increased government regulation has led to sluggishness in the economy. He finally concludes with the point that capitalism, despite the claims of its critics, has continued to spread throughout the world rather than come to an end. For critics of the free-market system, it is important to note the results of economies which attempted alternatives to capitalism during the 20th century. Socialism ranged from a democratic form in Great Britain following WWII to an authoritarian regime, as experienced by those who lived in the Soviet Union (Meltzer, 2012, p. 31). He is quick to point out that all of the former regimes of the 20th century, with the exceptions of North Korea and Cuba, have either failed or have been replaced by a more capitalist system (Meltzer, 2012, p. 31). While many of the socialist institutions failed, people still called for fairness and eventually recognized that capitalism can increase the funds available for redistribution (Meltzer, 2012, p. 31). Alexis de Tocqueville predicted that increased demands for income redistribution would threaten the democratic government if left unchecked, in turn leading to higher taxes, inefficiency, and slowed economic growth (2012, p. 31). In recent decades, this point has proven to be true in which in response to calls for “fairness,” the government has passed a number of bills increasing regulation and limiting both economic and personal freedoms. The regulations passed by governments initially intended to provide services in the event where markets failed, such as the classic example of police protection (Meltzer, 2012, p. 32). Regulation has grown, however, to extend into banks, financial markets, the environment, and a number of other areas 15