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Three weeks from today, I say goodbye to my life as a UNC undergrad and embrace an uncertain future. Many of my friends have good entry-level jobs or plans to attend grad school. Some may just move in with their parents for a while. But the closest thing I have to a plan is a plane ticket to China.It’s not my first time there; nor, I hope, will it be my last. I look forward to reliving my last trip to Asia, full of excitement, adventure and romance. But there is one thing I probably can’t look forward to: a job.While globalization has created extremely mobile capital markets, global labor markets remain much more restrictive. Governments across the world — including Chinese and American — maintain antiquated immigration laws that make little sense in a competitive global economy. My B.S. from UNC is no small achievement, but it probably won’t get me a work visa.The United States is a prime example of the mismatch between economic realities and actual public policy. Immigrants are essential to the U.S. economy, in both low- and high-skill industries. Of the 3 million workers hired each year for American crop harvests, only a quarter are legal residents. American farms couldn’t survive without foreign labor, and crackdowns on illegal immigration are threatening harvests. High-tech industries are also strongly tied to foreign labor. Famous tech giants like Intel and Google had foreign cofounders. In fact, more than half of all Silicon Valley start-ups between 1995 and 2005 had foreign-born cofounders. Those companies had $52 billion in revenue and employed 450,000 people.Despite this economic dependence on foreign-born labor, U.S. immigration law is extremely restrictive. Only 65,000 H-1B visas for highly skilled workers are allowed each year under current law. As of September 2006, more than 1 million skilled foreigners were waiting to gain legal residency status. With the increasing growth of Indian and Chinese economies, many foreigners who studied in American universities are choosing to return home rather than contribute to an American economy that cannot legally utilize their talents. Less skilled workers face larger obstacles, since it’s even more difficult for them to enter the country. Without legal options, it should be no surprise that 12 million immigrants live and work in the U.S. illegally.Discriminating against workers based on nationality is little different than racism, sexism or any other arbitrary and unjust prejudice. We expect the law to protect employees from prejudices, but our immigration laws outright encourage it. What sense does it make, morally or economically, to restrict a person’s job prospects based on which side of an imaginary line he or she was born?I would be more than happy to live and work in China and to contribute to their economic growth, just as many Chinese are eager to do the same here in America. Yet we are treated as burdens rather than blessings. A global economy demands a global workforce, and it’s time for the nations of the world to recognize that fact and set aside nationalistic prejudice.
Some people might have been shocked in September when several UNC students were arrested for selling cocaine. And, if the charges prove true, they probably weren’t making the best career choice in the world. I wouldn’t be too surprised. After all, illegal drugs are big business.In 2003, the United Nations estimated that the global illegal drug trade was worth nearly $322 billion. Cannabis is America’s top cash crop, with a market value greater than corn and wheat combined. In a survey of more than 1,700 UNC students I conducted through Facebook, cannabis use was consistently more common than tobacco use.Laws prohibiting recreational drugs haven’t eradicated demand, as is obvious from the size of the market. Unlike the markets for office chairs, television sets or dish towels, the drug market is strongly linked to violence. But, contrary to drug warriors’ claims that drug use is the primary cause of such violence, it’s the drug war itself that’s largely to blame.Most businesses operate within the scope of the law. Laws create rules for securing property rights, enforcing contracts and guaranteeing peaceful transactions.But prohibition forces the drug business far outside of any legal framework. Without courts to settle disputes or police to protect ownership, drug dealers must resort to enforcing their own rights through violence. Harvard economist Jeffrey Miron, after analyzing U.S. murder rates and anti-drug enforcement, found that the murder rate is 25 percent to 75 percent higher than would be the case without prohibition. Faced with direct government antagonism, it should be no surprise that drug dealers reach for a gun rather than dial 911.Prohibition — regardless of the substance — enriches violent killers. Al Capone’s vicious criminal enterprises were fueled in large part by illegal liquor sales. The ruthless Pablo Escobar became one of the richest men alive by exporting Colombian cocaine and killing anyone who stood in his way. In Afghanistan, some provinces had completely eradicated poppy production. Now, as the Taliban struggles to fund its insurgency, it accounts for more than 90 percent of the world’s opium trade. And near our southern border, crackdowns on the sale of marijuana have led to 18,000 deaths in Mexico since 2006, according to the BBC.Pablo Escobar’s policy was “silver or lead,” meaning you either were on his payroll or a target for assassination. But his maxim works just as well to describe the outcomes of legalization versus criminalization. Drugs could be legalized, allowing legitimate and peaceful businesses, like Amsterdam coffee shops or California dispensaries, to take the place of violent criminals and terrorists. Public health could also improve; Portugal legalized drugs in 2001 and has seen declining drug use and more treatment for addicts, according to Time magazine. But if governments continue their policies of prohibition, would-be businessmen will be crowded out by deadly thugs. Rather than spend money on treatment of serious drug addictions, we’ll waste it on enforcement that only encourages dealer ruthlessness. We need to choose which world we prefer: the “silver” world of commerce, or the “lead” of an endless war.
I’ll start with the prosciutto, the shrimp cocktail and the Caesar salad. And for my entrées, I’d like the lobster tail, the filet mignon and the penne with chicken.”My friends and I ordered such wonderfully gluttonous dinners every night of Spring Break. All food aboard the cruise ship was free, so we gorged ourselves to near sickness without a moment’s hesitation. There was no feeling of wastefulness if we failed to finish our food — after all, we weren’t paying a dime. We had every reason in the world to consume without end, and that’s exactly what we did.Carnival Cruise Lines hardly invented the idea of the free lunch; it dates back to at least the mid-1800s. Saloons would offer free meals to patrons, but charged high prices for alcohol. Many patrons rightly criticized the practice, complaining that the lunch was hardly free after buying drinks.“There’s no such thing as a free lunch,” has become a popular rejoinder toward promises of something-for-nothing. Milton Friedman, the late Nobel laureate economist, even used the phrase as the title of an economics textbook. But this idea has implications far beyond Spring Break bar tabs; it’s a profound statement about how our market economy works.Free stuff is a myth: Somebody always has to pay, whether or not that somebody is you. Every product and service is created with an investment of resources by hard-working people. The prices we pay reflect both the scarcity of resources and everyone else’s demand for them.In those unassuming little numbers, we convey information about the vast and complex sum of human activity. Billions of human beings, most with wildly different goals, peacefully coordinate their activities thanks to the elegant simplicity of prices. It’s not necessary to know every piece of the production puzzle when prices so succinctly summarize the most relevant details.If a late frost ruins Florida orange crops, I can remain totally ignorant of that fact while still conserving my use of oranges. Oranges become scarcer, their price rises, and I have all the incentive I need to buy fewer oranges. Since I’m using less, there’s more to go around for everyone else. No one has to tell me to conserve — the higher price tells me to cut back.Prices encourage conservation, not because it’s morally right, but because wastefulness hits us where it hurts: our wallets. A very relevant example is our broken U.S. health care system. In 2006, only 12 percent of all U.S. health care spending came directly from consumer’s pockets — the rest was paid by government and private insurers. It shouldn’t be surprising, then, that out of $2.2 trillion spent on health care, $1.2 trillion is wasteful, going mostly to redundant or unnecessary procedures, according to PricewaterhouseCoopers.Americans expect third parties to pick up the check for medical care, so it’s no wonder that we use more than we may need. But like the free lunch, the costs of our consumption eventually come back to us in higher premiums and taxes.There’s no such thing as a free lunch, or free health care, or free anything. Everything costs something, regardless of how that cost is distributed. Someone, somewhere, always pays the price for your consumption—and don’t be surprised if, sooner or later, that someone is you.
From the top-floor conference room of the Copenhagen headquarters of ISS Group, I could see the constant Danish rain trickling down the windows. An employee was giving a presentation on their corporate strategy. ISS works in facilities management, employing janitors, groundskeepers, caterers, etc. The presentation was pretty standard fare for a business student on a corporate visit, but his talk of regulation stuck in my mind.“We want to professionalize the industry,” he said, describing their lobbying efforts with the European Union. He told us that under present laws, anyone with a mop and a bucket could call themselves facilities managers and go into business. That, ISS Group reckoned, wasn’t fair to customers who couldn’t tell the difference between themselves and amateurs. I fidgeted in my seat, taking something from his presentation very different from what he must have intended.What I heard was, “I hate poor people, and we shouldn’t let them compete with us.”ISS is not an evil company. All the buildings I’ve seen them service were immaculate, and the presenter seemed to genuinely believe that greater regulation of their industry would be a good thing. But the sorts of regulations they were advocating create clear barriers to competition. The result: ISS wins; poor Mr. Mop-and-bucket loses.Big businesses like ISS frequently look to government regulation to avoid the pains of competition. Examples of laws protecting established interests are too numerous to count.American sugar growers have enjoyed tariffs on foreign sugar since 1789. The result? Americans pay on average twice as much for sugar than the rest of the world. Ever wonder why your Coca-Cola is full of high-fructose corn syrup? Wonder no more. Upton Sinclair’s “The Jungle” created an uproar about the sanitation among Chicago meat packers. Despite criticisms of embellishment from fellow socialist Jack London and President Theodore Roosevelt, the public demanded new inspection laws. How did the biggest players in the business react? They supported the idea without reservations. New regulations would not only restore consumer confidence, but also slam smaller meat houses with new costs. Sometimes business regulations do more than raise prices. Last summer I met Clark Neily, a senior attorney with civil liberties law firm Institute for Justice. Clark told me the story of a woman he was representing who arranged flowers in Louisiana. She was forced out of work because of unfair licensing requirements, lobbied for by state florists. Impoverished, without work and displaced by Hurricane Katrina, she fell ill and died alone in a hotel room before her case could be decided. In the wake of the financial crisis, it’s easy to clamor for more government regulation of business. But as history shows, business interests know how to bend allegedly public-spirited legislation to their own ends. The result often kills off competition — and sometimes, it literally ends human lives. The best medicine for this societal ill is a healthy dose of skepticism for ever-increasing regulation.
Hippies and drug dealers surrounded me. The houses and shops, covered in murals and graffiti, were cobbled together from the remaining scraps of the abandoned Danish naval base. From the stalls along aptly-named Pusher Street , you could buy eclectic trinkets, questionable fashions and every sort of pipe, bubbler and bong imaginable. The sale of cannabis was barely concealed in the shadows nearby. The outdoor bar served local organic beers, and the biggest industry was a bicycle shop. The squatters’ paradise of Christiania made Carrboro look solidly right-wing.And as I walked through this counter-cultural commune nestled within the Danish capital of Copenhagen, I could only think one thing: “I have never seen more capitalists in my life.”Confused? Let me explain.Free markets have taken a lot of heat recently. Wall Street bankers made fortunes from the destruction of Main Street, they say. We blame unchecked greed for wiping out savings and leaving so many unemployed. It’s certainly true that banks made huge mistakes, hurting millions of people around the world. But looking to Wall Street as a shining example of free markets is like looking to John Edwards as an example of fidelity.The essence of the free market is voluntary action. Christiania was built on little else. Wall Street survives because we were forced to bail them out. Pusher Street, however, thrives solely on nonviolent, voluntary trade.The same entrepreneurial spirit can be seen here in Chapel Hill. The Campus Y is raising money to alleviate the suffering in Haiti. Scott Maitland expanded his operations at Top of the Hill with the new Great Room and Back Bar , with plans for a distillery. Adam Bliss is keeping his hookah bar open, and is choosing to fight the recent smoking ban rather than go out of business. You’re part of a free market whenever you give blood, buy a hamburger, go on a date, send your mother a birthday card, donate to charity or plan a road trip.Interacting with others voluntarily, without the use of force or fraud, is what best defines true free market societies.Understanding free markets is crucial to America’s peace and prosperity. Life under the Bush administration saw a massive erosion of these peaceful principles.America recently lost its ranking as a free economy in the Index of Economic Freedom, and it’s no surprise why. Wall Street has become a revolting capitalist-socialist hybrid, where profits are private but losses are John Q. Taxpayer’s concern. Access to health care is limited by senseless regulations that stifle competition and lessen consumer choice of insurance.For a true picture of the free market, forget the crony capitalism of Wall Street. Look to the independent risk takers of Pusher Street, Franklin Street and Main Streets across the nation. They’re the ones making our world prosperous, creating value through trade rather than force. They accept that there are risks to business and that failure is possible. They don’t expect to be bailed out by their political buddies. They, not the CEOs with multi-million dollar bonuses, are the true capitalists.