- The Washington Times - Wednesday, February 26, 2003

WASHINGTON, Feb. 26 (UPI) — The UPI think tank wrap-up is a daily digest covering opinion pieces, reactions to recent news events, and position statements released by various think tanks. This is the first of three wrap-ups for February 26.

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The Cato Institute

The European rift goes beyond politics

by Marian L. Tupy

WASHINGTON — The European enlargement is turning into a nightmare for the cozy Franco-German alliance that historically dominated the foreign policy of the European Union. The irrefutable sign that the gravity of power is shifting came when three new members of the EU — Hungary, Poland and the Czech Republic — joined Great Britain and Spain in expressing their support for the U.S. policy toward Iraq.

Within days, other new members, Slovakia, Latvia, Estonia and Lithuania, joined them. Even aspiring EU members, such as Romania, Bulgaria, Croatia, Macedonia and Albania signed up.

The reaction of Paris was one of shock as the perpetually servile Central and East European states entered the stage of European politics with a bang — and in opposition to La France. Imagine that.

The "new" Europeans, as Donald Rumsfeld called them, clearly do not think that European foreign policy should be shaped by French anti-Americanism. The new members are rather fond of the Americans — not least because they see the United States as having done much more to defeat communism than all the other European countries put together.

But the divisions between "old" and "new" Europe go much deeper than that. The accession of the new EU members threatens the post-war consensus regarding the social-democratic nature of the European economy. The type of economic arrangements that the Central and East European countries wish to follow seems unambiguous.

While the French and the Germans agonize about the preservation of their pay-as-you-go public pension systems in the face of growing expenditures and declining ratios between workers and retirees, the Poles and Hungarians have partially privatized their systems. While the governments in "old" Europe prepare for battle with powerful labor unions, the "new" Europeans continue to liberalize their labor markets and attract a growing share of foreign investment. While Brussels seethes over the "social dumping" and "unfair competition" of the new members, the Central and East Europeans see that the only way to escape the communist legacy of poverty is a vibrant free market.

Estonia, which had to accept a mind-numbing number of EU laws and regulations to qualify for EU membership, remains the freest economy in the former Soviet bloc. The country has introduced a flat income tax and effectively eliminated her corporate taxes. Slovakia is quickly turning into a poster child of economic reform. The bidding war has already started for licenses that the Slovak government wants to award to private pension management funds. In fact, Slovaks decided to go further than their neighbors and plan to privatize Slovakia's pension system in its entirety.

There are plans for school vouchers and tuition fees for university students. A flat tax of 20 percent is expected to kick in beginning January 2004. In the Czech Republic, the government made the difficult but necessary decision to gradually eliminate rent controls last month.

Even slow-moving Russia has begun to liberalize and introduced a flat tax of 13 percent in 2001. At that time, the move was seen as risky. But the flat tax has contributed to the 40 percent increase in revenue in 2001 and another 40 percent increase in 2002. In fact, Russia experienced a budget surplus of 1.4 percent of the GDP last year and this year the surplus is expected to reach 0.6 percent of the GDP. Russia is considering other reforms, including energy privatization and membership in the World Trade Organization.

To be sure, Russia will never become a part of the EU, but reforms in this former communist behemoth are symptomatic of a liberalizing wind sweeping through post-communist Europe. As her economy grows, so will Russian prosperity and influence.

In the short- to medium-term, however, it will be the British who will play a pivotal role in the whole European saga. The accession of the Central and East European countries will strengthen the British role in the EU and turn the United Kingdom into the undisputed leader of its reformist faction. Hopefully, this new bloc will check the power of the Franco-German alliance and succeed in reforming the fossilized edifice of the European economy — a necessary venture, which will in time release the creative potential of all European peoples.

(Marian L. Tupy is assistant director of the Project on Global Economic Liberty at the Cato Institute.)

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The Ludwig von Mises Institute

(The LVMI is a research and educational center devoted to classical liberalism — often known as libertarianism — and the Austrian school of economics. LVMI seeks a radical shift in the intellectual climate by promoting the market economy, private property, sound money and peaceful international relations, while opposing government intervention.)

In defense of pilfering

by Christopher Westley

AUBURN, Ala.— Stealing is wrong. It makes private property less secure and requires the diversion of otherwise productive resources to the uses necessary to reduce stealing in the future. Stealing appropriates the fruits of someone else's labor without his permission.

Nonetheless, those who are in the news for pilfering the shuttle debris that rained down on Texas and Louisiana earlier this month are getting a bad rap. In the weeks following the tragic ending of the space shuttle Columbia and the deaths of seven crew members, several individuals have been caught collecting the space garbage that littered their property, possibly impeding NASA's effort to investigate this latest government failure.

Several opportunists attempted to offer pieces of the shuttle for auction on eBay. Indeed, by 2 p.m. on the day of the shuttle crash, an item billed as "Columbia Space Shuttle Debris" listed there with an opening bid of $10,000.

Needless to say, many opinion-makers are shocked by such seemingly boorish behavior.

"These people aren't the underbelly of society," wrote The Press of Atlantic City (where much of the underbelly of society seem to live). "They're lower than that."

The Miami Herald's Carl Hiaasen noted that several individuals retrieved and then offered for sale the debris with full knowledge that they may be contaminated with potentially fatal chemicals and that prosecution can result in 10-year jail terms and $250,000 fines. Hiaasen considers these people the "chronically clueless" — so uniquely stupid, in fact, that science may benefit by studying their brains.

But to quote a famous Alabama philosopher, stupid is as stupid does. Such pilfering may be completely compatible with an ethic of liberty, and for the state to impose such harsh penalties on this activity may actually make the recovery process all the more difficult.

The argument against the pilfering is straightforward: Columbia is government property. Therefore, the government has the right to retrieve it, and its citizens have the responsibility to aid the government in this effort. Such an argument is loosely connected to a property rights theory. The pilferers are taking control of property that is not theirs.

However, there are several of problems with this argument. To say that Columbia is government property, or to say that anything is government property, is to say that it was built by the use of coerced capital. Taxation itself is a form of theft — both theft and taxes are examples of involuntary trade — so while NASA held legal title to Columbia, its very existence was made possible by resources appropriated by the threat of force.

This fact places the government's property right claim to the shuttle in a different light than one's property right claim to his car, assuming that the latter was appropriated through voluntary trade. Indeed, the pilferers might legitimately claim that they were recovering wealth that had previously been taken from them in the form of taxation.

In any event, pilferers are under no strict obligation to return debris that fell on their private property. While the government can retrieve shuttle remains on public lands in any way it sees fit, it cannot violate the rights of property owners simply because they were unfortunate enough to wake up one morning and find government property on their land.

Mistakes happen. Parties accidentally encroach on the property of others all the time. But there are established common law relationships that sort out the consequences that assure that the rights of affected parties are respected. The government's actions following the shuttle disaster illustrate what it thinks about such arrangements.

An example may illustrate. Assume a car accident on your street results in a damaged automobile being left on your front lawn. You would suffer legal damage if you appropriated the car for yourself or damaged it in any way, although you would also have protections insuring the vehicle's removal in a reasonable amount of time and compensation for any damage it might have done to your property. Civilized people would be appalled if the owner sent messages threatening violence if you tampered with the vehicle in any way.

Civility is not exactly one of the hallmarks of the modern state. Its harsh penalties being imposed on pilferers may ensure that NASA retrieves less shuttle debris than it otherwise would. Surely by now there has been much shuttle debris that has been appropriated by individuals that will never be found out of fear of strict consequences from being caught with it.

The penalty itself causes such debris' value in extra-legal markets to increase. Pieces that could fetch higher prices would more likely be hoarded to compensate the added cost of being caught.

NASA search efforts would have been much better served if it encouraged private individuals to collect as much shuttle debris as possible to sell on the market. This strategy would have created an incentive for those with possible knowledge of debris locations to come forward with it. Millions of dollars would have been saved while today's excoriated pilferers would instead be praised for providing a helpful service.

Instead, the government blunders on, forcing its will however it wants. Overzealous? Don't worry. The lawyers will fix it later. This latest episode of government failure shows once again how accustomed society has become to the lower standards associated with government action.

Any doubters of this statement should ask themselves: How long would it take for lawyers to contact potential victims of fallen debris following a similar tragedy that occurred to a private defense contractor? I don't know. But we can assume it would be faster than it takes to get an auction posted to eBay.

(Christopher Westley, Ph.D., is an assistant professor of economics at Jacksonville State University.)



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