FACT & COMMENT
With Libra, Zuck is a hero.
MARK ZUCKERBERG TOOK a verbal beating over Libra (among other things), Facebook’s proposed cryptocurrency and payments system, when he recently testified before the U.S. House Financial Services Committee. Well aware of the low repute in which Facebook and other high-tech giants are held these days, most of the committee’s politicians couldn’t resist the temptation to scold and harangue Zuckerberg. Actually, issues such as privacy and money laundering are addressable. Facebook is already working with regulators on such concerns.
Nonetheless, regulatory pressures have forced a number of companies that were partnering with Facebook on this project to drop out.
And this gets to the real reason the idea of Libra is so troubling to so many politicians, government bureaucrats, banks and economists the world over: Libra could do to central banks what Uber and Lyft did to the taxi cartels— bust up their monopolies, or, to coin a phrase, give them a run for their money.
Libra would be backed by a basket of currencies and giltedged financial instruments, thereby overcoming the biggest flaw of other cryptocurrencies today—their instability. Four thousand years of experience demonstrates that gold would be the best tie, but Libra’s basket would still be vastly superior to anything else out there.
When Libra is up and running, a Facebook user could obtain a digital wallet called Calibra and could then send units of Libra to another Calibra wallet-holder anywhere in the world. The results would be instantly revolutionary. Under our current system, it’s expensive to wire money across borders, not to mention the hours or days it takes for funds to clear. Banks would be cut out of the process entirely!
What a combination Libra offers: convenience and currency stability.
Another enormous plus is that such a digital and mobile system would easily open up accessible banking services to the nearly 1 billion people worldwide and the 14 million in the U.S. who don’t have bank accounts. Amazingly—and unknown to most of the world—such digital banking has blossomed in Kenya, where millions of people, in response to the country’s lack of traditional bank branches and services, do their banking, in effect, via their mobile devices. China is also light-years ahead of the U.S. when it comes to digital transactions.
In the face of so much hostility, will Libra get off the ground? Zuckerberg has made it clear that Facebook itself won’t move forward on Libra without U.S. regulatory approval. Since the Libra undertaking is now in the hands of the new Libra Association—a group of companies (including Facebook) and nonprofits—and is formally independent of Facebook, Libra could still launch. But in reality, without Facebook, Libra will go nowhere.
It will take considerable diplomatic finesse and political skill for Libra to formally clear all the obstacles it faces, which is a shame, because something like Libra is eventually going to happen, and it would be nice if the creator were an American company. As Zuckerberg said in his prepared testimony, “While we debate these issues, the rest of the world isn’t waiting. China is moving quickly to launch similar ideas in the coming months. Libra . . . will extend America’s financial leadership as well as our democratic values and oversight around the world. If America doesn’t innovate, our financial leadership is not guaranteed.”
E-Cigarettes Are a Blessing
YOU’D NEVER know it from all the lurid headlines in recent months about the seeming epidemic of deaths from “smoking” e-cigarettes, but vaping is actually a publichealth godsend for smokers. The hysteria surrounding vaping says more about the peculiar fevers of our times than about the realities of puffing e-cigarettes.
Those deaths we hear about didn’t result from normal e-cigarettes but from tainted contents, particularly the active ingredient found in cannabis. The cries for prohibiting vaping make no more sense than banning milk because a few bad characters peddled adulterated versions.
The truth is that vaping is 95% less harmful than smoking. It lets users get nicotine without all the other carcinogenic contents and carbon monoxide that come from smoking cigarettes. Vaping is far more effective in helping people quit inhaling tobacco than are all the other props, including nicotine patches. Moreover, with many vaping devices, users can choose the level of nicotine they vape, including none at all. Vaping has enabled countless numbers of smokers to give up cigarettes and countless others not to take them up in the first place, thereby saving mil
lions of lives.
In vivid contrast to those in the U.S., British health authorities endorse e-cigarettes as a highly effective means of enabling people to give up smoking tobacco.
Nonetheless American politicians and government regulators—led by the FDA—are banning flavored e-cigarettes, claiming that they are designed to lure unwary teenagers to take up the habit. San Francisco—that haven for drug addicts and people who defecate on sidewalks—has even banned the sale of vaping devices. The reality is that almost all vapers—there are about 11 million adult users in the U.S.—prefer flavors to the taste of unflavored tobacco.
As for an “epidemic” in teenage vaping, there is little evidence e-cigarettes have become a gateway to cigarette smoking. Smoking among teenagers has, in fact, declined dramatically since the 1990s.
Banning e-cigarettes, prohibiting flavored versions or imposing draconian taxes (as a number of pols in Congress and elsewhere are pushing for) would have two bad results: more people smoking traditional—and highly lethal—cigarettes, and the rise of black markets for flavored e-cigarettes, with all the risks of unsafe versions that that would entail.
How to Save the Elephants
HOW’S THIS for a counterintuitive idea? One effective way to preserve elephants and other threatened wildlife in Africa would be to allow controlled big-game hunting.
Botswana’s president, Mokgweetsi Masisi, recently penned a provocative piece for the Wall Street Journal entitled “Hunting Elephants Will Help
Them Survive.” Unlike in the rest of Africa, in Botswana the population of pachyderms has exploded, from 50,000 in the mid-1990s to 130,000 today. The country can’t handle that many. “Forced to compete for scarce food and water, elephants have been moving out of their usual range into more-inhabited areas—with horrendous consequences,” i.e., the killing and maiming of people in rural villages.
Hunting would allow villagers to protect themselves, and rogue pachyderms “will quickly learn to keep out of areas where they shouldn’t be.”
By allowing local communities to get a cut of the hunting-license fees, they “will gain a strong incentive to value [the elephants]—and what you value, you take care of.”
What about other parts of Africa, such as Angola, where the lethal combination of rampant poaching and continuous civil strife drove the herds away, or the African savanna, where poaching and, to a far lesser extent, population pressures have knocked the elephant numbers down 30%?
These are areas in which an extensive program of controlled hunting and, where possible, greater property rights could be extremely helpful. Famed Johns Hopkins economist Steve Hanke, who years ago did extensive work in Kenya on how property rights might work, recently wrote for us: “Conventional approaches to wildlife management in Africa have failed, as witnessed by the dramatic declines in wildlife populations.” He concludes, based on his extensive groundwork in Africa, that “only by establishing secure property rights for land and wildlife would these resources be rendered valuable. Markets for them would then develop. They would be wisely used, protected and conserved. The prudent use of resources is, and always has been, all about property, prices, markets and legitimate trade.”
In addition, such rights would create more resources. For example, the U.S. pig population would plummet, and those remaining would become wild, if suddenly there were no market for bacon, ham, sausage, pork and pork rinds.