Oxfam: Combined wealth of the 85 richest people is equal to that of the poorest 3.5 billion – half the world’s population

Rick Weber Economics , , ,

I’ll bet the 85 richest people in the world have been beneficiaries of a good deal of rent seeking, but I still think there’s a positive spin to stories like this.

Let’s say (for the sake of not working too hard to write this post) that when we adjust for theft and its dead weight costs, the net productive wealth of group A (the wealthy) is just 25% the total wealth, that’s a mean productive wealth of 10.3 million times the average member of group B. For a humanitarian, this means that their fight to improve the plight of the world’s poor, has the potential to pick up trillion dollar bills off the sidewalk. This isn’t just little embossed portraits of old dead white men, it’s genuine human flourishing! Of course this message would be more meaningful if the numbers were something like “combined wealth of the poorest 3.5 billion is equal to the combined wealth of the poorest X million residents of OECD countries.”

That made up percentage, if it’s even remotely accurate, is a similar call to arms for those of us opposing politically supported privilege. And it just so happens that the humanitarian and libertarian causes overlap nicely! There is institutionalized theft and there is poverty, and that’s bad news. But the problems have been recognized and solutions are being fought for.

Around the Web

Brandon Christensen Current Events, Links , , , , , , , , , , , , , , , , ,
  1. Reading Tocqueville in Qatar and at Georgetown
  2. Colonialism and Anti-Colonialism: Blame Nationalism for Both
  3. The Issue of Selective Prosecution
  4. Eric Prince: Out of Blackwater and into China; The WSJ‘s weekend interview with the founder of Blackwater is particularly good. If you hit a paywall, just copy and paste the title and enter it into your Google search bar. Click on the first link and voila.
  5. A short history of economic anthropology (grab a cup of coffee first)
  6. The market may be colorblind, but politics isn’t: Race, class and economic opportunity

Nice Weather, Female Exhibitionism, and Scientific Research

Jacques Delacroix Current Events, Religion , , , , , ,

Something interesting happened in Santa Cruz the past two or even three weeks. (I write on January 25 2014.) Or rather, something did not happened that should have. (I am alert to the dog that did not bark, as in Sherlock Holmes.)

For a long time now in the winter of 2013-014, comments on the weather have been in the national news much more frequently than is usual.

It’s been rather warmer here in Santa Cruz this January than it usually is in the middle of August. The Japanese cherry tree across the street has even been fooled into blooming! Although it’s a small city, I think Santa Cruz is a world center for warmism and for climatism (also for organic foodism, for vegetarianism, for nutism – it means eating only nuts – for deadly bicyclism,* for primitive feminism, for obligatory lesbianism, for residual Trotskysm, for holistic medicine, and perhaps also for holistic plumbing, I am not completely sure.)

Yet, yet, I never heard a peep through the local grapevine in the past few weeks about how the unseasonably warm weather was another proof of global warming. I only refer to the informal grapevine; I wouldn’t know if the local press had said anything. I don’t read it much; I have many unimportant things to do.

I have two explanations for this apparent surprising silence, one pretty sure, one tentative.

First, warm weather in January puts people in a good mood, even in California, even if they don’t want to be in a good mood. For one thing, the young women were walking around for days with the smug little look of nearly all women, everywhere, who get to show a bit of skin at a completely unexpected time. Their ebullient mood is catchy. The young men appreciate though they have been taught to avert their eyes lest they be accused of visual rape. The old guys frankly stare and smile, trying to remember why they do. (I know wherewith I speak!) The older women don’t seem to mind; it brings back warm memories, I would guess.

How about this: The strength of a national feminist movement is inversely correlated with mean winter temperatures?

My second, and tentative hypothesis about the lack of sententious comments about the warm weather in California is that ordinary people have finally caught on: You cannot argue that unexpectedly high temperatures in one fifth of the country are proof of global warming while maintaining that unprecedented low temperatures, at the same time, in three fifth of the countries do not contradict this view. You can’t have it both ways.

Of course, there is that other, newer beast, “climate change.” It goes like this:

If it’s warmer than usual, it’s because of man-made greenhouse gases. If it’s colder, it’s because of man-made greenhouse gases.

I laugh, I laugh stupidly but I could actually see this kind of argument made in a legitimate manner. You could try to show oscillations around a baseline. The baseline would have to be fixed. You couldn’t chose another baseline every time you did not like the weather facts. You would have to show that the oscillations have greater amplitude than was/is the case in some other test period or place (planet?). The greater amplitude oscillations would have to last for some reasonable period (not six years, for example). Finally, you would have to make a credible effort to show that high-magnitude oscillations are causally linked to greenhouse gas emissions. You couldn’t simply show two graphs looking a little bit alike and beginning and ending at times of your convenience, for example.

You would also have to publish prominently all the results of well designed research that indicated no greater oscillations than usual or no link between greater oscillations and the magnitude of man-made greenhouse gas emissions. Honestly, you would also have to explain which man-made emissions do what: car exhausts, air pollution from nuclear plants, cattle belches. (The seconds don’t exist, I am just toying with your minds; the third is not a joke at all; look it up.)

Note that I did not use at all the word “proof.” A reasonably objective demonstration satisfying all the above would give this denier pause. Also, climate scientists who, I am told, overwhelmingly “believe” in climate change would have to make an creditable effort to stop the irresponsible media bullshit spread every day in their names. (More on the last point another day soon.)

Not much to ask and a tall order!

* See my piece “Global Warming and Child Sacrifice” at Facts Matter

Why Young Women Are Stupid (If They Are): A Scientific Inquiry

Jacques Delacroix History , , , ,

The Victoria’s Secret catalog mailing list is several tens of thousand times longer than the mailing list of the National Organization For Women. The feminist wheel has turned enough for brave male social scientists like me finally to consider from a scientific viewpoint an issue that has been with us forever.

Here is the issue: Anyone who has ever tried to win an argument with a reasonably well-informed eleven-year old girl and lost knows that something pretty bad must happen – on the mental front – to the females of our species shortly after they reach that age. (A lexicographic irony is that “front” is the French word for “forehead.” )

I won’t affirm that young women tend to be stupid, for two reasons. First, it would offend my young Indian niece, back in Calcutta. (The parenthetical part of the title is in deference to her feelings.) Second, as my super-intelligent wife often states in a an accusatory tone of voice, I am still a kind of closet liberal. This is the same wife who suspects Attila the Hun was kind of a big softie with his silly cut-off heads of his enemies hanging from his saddle. Incidentally, I owe my wife many of my late-life insights about womanhood.

As so often happens in a the Verstehen school of sociological philosophy, my first grasp of the problem came to me during a moment of idleness. I was contemplating my twelve-year old son watching television with his index finger in his nose up to the elbow. The incongruous thought hit me: “In two or three years at most, some pretty young woman is going to think him irresistible!” I started chuckling when the double thought crossed my mind that I was facing a veritable scientific quandary and possibly the seeds of its solution.

Now, to get a handle on the problem, we need to go back a few thousand years, a few hundreds of thousands of years actually. Let’s remember that we, humans, have only known agriculture and animal husbandry for about 10,000 years. Both were discovered or invented in the Middle-East, widely defined, or in India. (An Indian friend of mine keeps telling me that India already had advanced agriculture when my European ancestors were still trying to figure out how to come down from the trees. That is pure slander; my ancestors walked from East Africa; they did not brachiate.) Before that, for as long as there have been humans, and proto-humans, they led a precarious existence.

At the center of this precariousness lied the cave bear. Imagine a carnivorous creature with ten inch-canines standing ten feet tall when irritated and weighing in at one thousands pounds. (That would be the smaller ones.) Our ancestors hanged out near cave bears much of the time for two reasons. First, they used the same caves as the bears to protect themselves from the elements. Second, they soon discovered in themselves a predilection for the carrion cave bears left lying around, like all predators.

With this propinquity, meals where our ancestors were themselves the main course, and close-calls, unavoidably occurred frequently. That we survived as a species nevertheless calls for an explanation. Here it is below. Although it’s somewhat speculative, it’s in full accordance with what we know of the more general forms of human behavior and with evolutionary theory both.

Grandpa and Grandma Caveperson most likely lived in small extended family groups of fifteen and to fifty people. There are good technical reasons for this explanation centered around what semi-nomadic humans can carry and, especially, the number of babies and small children. In close encounters with cave bears, you can be sure there were young males, teen-age boys, who stayed behind to throw stones at the monsters. Probably no one could lob rocks heavy enough, or with enough force, to do serious damage to any bear. Yet, an avalanche of rocks could delay the bear long enough to allow many, or some, women with small children, and pregnant women to scamper away.

This survival strategy poses one problem though: The young rock throwers must have suffered a high rate of mortality. Thus, the very traits of brashness, courage, and accuracy that saved the group at Time 1 were in constant danger of disappearing with those who bore those traits and thus to be unavailable at Time 2.

Something had to compensate for the high mortality among the young rock throwers. That something is obvious: They had to be able to reproduce disproportionately. Do the arithmetic: If one in ten of the wimpy youths dies before siring offspring but one in two of the tough ones, after a short while, the propensity to stay behind and taunt the bears will disappear in the population. That is, unless the surviving rock artists manage somehow to have more than twice more children that their timid brothers and cousins. It turns out that the best solution to this quandary, widely observed in many species, including humans, is female mating choice.

If young human females actively wanted to mate with rock throwers, the right traits could be transmitted down the generations forever. But of course, intelligent young women wanted to have nothing to do with the morons. Accordingly, they reproduced, and their children survived, at an inferior rate. Thus, the traits supporting simple good judgment had a tendency to thin out in the relevant populations.

Female air-heads, who were hot for the delinquents, passed on their genes in large numbers to both their female and their male children. And so on, to this day where we encounter few cave bears. These things are hard-wired. It takes a while for a trait that was useful previously to vanish from a population because it has lost its usefulness. The trait may never disappears if it does not become dysfunctional in the current situation. And this, my friends is why young women would be stupid (if they were stupid).

Scientific note: One condition that would hasten the demise of female stupidity would be if intelligent women had more children surviving to reproductive age than stupid women. There is no reason to believe that they do, overall. By the way, that’s what the phrase “survival of the fittest” means: Having children who themselves have children.

If you are of the female persuasion, Dear Reader, and if my sage observations make you livid, or red with anger, as the case may be, stop and ask yourselves: How many of your girlfriends actively demonstrate their erotic attraction to bad boys?

Creative Destruction in the Levant

Brandon Christensen Current Events , , , , , , , , ,

Creative destruction ain’t just a place for the marketplace, baby! The National Interest has an article out by Mark Donig on “The Twilight of Sykes-Picot.” It’s a great piece that basically acknowledges the end of an era (European imperialism and cartographic arrogance), and what this will mean for the United States.

Sykes-Picot is an agreement between France and Great Britain that divided the Ottoman Empire up between the two after World War I (the article goes into a bit more detail if you’re interested). Russia was also a part of the negotiations for carving up Europe’s sick man, but after the Bolsheviks seized power all imperial pretenses associated with the West were abandoned in Moscow. European cartographers abandoned the Ottoman approach (learned over centuries of trial and error) to governing territories in the Levant and instead carved up the region as they saw fit. The end result was, of course, a number of states that could only be held together by a strong man. Today, these post-colonial states are collapsing and in their place are a greater number of pseudo-states.

In many of these pseudo-states, Islamists run the show. Donig, an international law student, is worried that if states like Syria and Iraq collapse, the chemical and biological weapons stockpiled in secret locations will fall into the wrong hands. Donig’s suggestion is that the US pay very close attention to what is happening in the Levant, but I think he is much too pessimistic.

The US should embrace political disintegration in Levant wholeheartedly. Doing so would mean recognizing sovereignty of nasty-looking regimes. Yet is would also end the power struggles for the “center” in Sykes-Picot states, which would in turn end the reign of strong men in the region for good (for a concise explanation on why strong men emerge in post-colonial states, see “Imperialism: The Illogical Nature of Humanitarian Wars“).

Were the US to embrace decentralization in the Levant, it would be wise for Washington to play an active role implementing trade agreements both between the new states  as well as with Washington. The separatist movements in Scotland and Catalonia illustrate my garbled point well. Scots and Catalonians don’t want independence without membership into the international trading confederation known as the EU, and membership in an international confederation requires relinquishing some sovereignty (Daniel Larison inadvertently makes this point here; people on both the Left and Right who point to evils of EU rarely acknowledge that many states and regions would love to be a part of this confederation, warts and all, and that they stake their very separatist claims on such a membership).

Trade agreements would play an integral role in making or breaking these new states within their newly decentralized region (see Becker or yours truly on the importance of trade in politically fragmented regions). Once recognizing sovereignty of new states, the US would gain some much-needed trust from the peoples of these new states, and then Washington could use that influence to push for more economic integration (between the new states and with the new states) while at the same time recognizing the reality of political fragmentation in the region.

At any rate, full-on American diplomacy in this area is a must, especially given the TNI report’s account of possible chemical weapons stockpiles. This is something the US could work with Russia on, thus building a measure of trust which could, in turn, be used to work with Moscow elsewhere (especially in Europe). It still surprises me that dovish policymakers in Washington and Moscow have not yet used their respective government’s mutual enemy (Islamism) to build much-needed bridges between the two countries.

Weekly Wakeup 01-24-2014

Adam Magoon History, Liberty , , ,

Making this a quick copy paste job today.  It has been a busy week.

To make a long story short, read this.

Myth:  The Great Depression was caused by government inaction in the face of a failing economy.

Reality:  The Hoover administration was the most active interventionist of a non-war economy in American history.

To quote the man himself:

“[W]e might have done nothing. That would have been utter ruin. Instead, we met the situation with proposals to private business and to Congress of the most gigantic program of economic defense and counterattack ever evolved in the history of the Republic. We put it into action.

No government in Washington has hitherto considered that it held so broad a responsibility for leadership in such times. . . . For the first time in the history of depression, dividends, profits, and the cost of living have been reduced before wages have suffered.”

And to quote the Murray Rothbard about Hoover’s actions:

At St. Paul, at the end of his campaign, Hoover summarized the measures he had taken to combat the depression: higher tariffs, which had protected agriculture and prevented much unemployment, expansion of credit by the Federal Reserve, which Hoover somehow identified with ‘protection of the gold standard’; the Home Loan Bank system, providing long-term capital to building-and-loan associations and savings banks, and enabling them to expand credit and suspend foreclosures; agricultural credit banks which loaned to farmers; Reconstruction Finance Corporation (RFC) loans to banks, states, agriculture, and public works; spreading of work to prevent unemployment; the extension of construction and public works; strengthening Federal Land Banks; and, especially, inducing employers to maintain wage rates. Wage rates ‘were maintained until the cost of living had decreased and the profits had practically vanished. They are now the highest real wages in the world.’ But was there any causal link between this fact and the highest unemployment rate in American history? This question Hoover ignored.

Hoover had, indeed, “placed humanity before money, through the sacrifice of profits and dividends before wages,” but people found it difficult to subsist or prosper on “humanity.” Hoover noted that he had made work for the unemployed, prevented foreclosures, saved banks, and “fought to retard falling prices.” It is true that “for the first time” Hoover had prevented an “immediate attack upon wages as a basis of maintaining profits,” but the result of wiping out profits and maintaining artificial wage rates was chronic, unprecedented depression. On the RFC, Hoover proclaimed, as he did for the rest of his program, “Nothing has ever been devised in our history which has done more for those whom Mr. Coolidge has aptly called the ‘common run of men and women.'” Yet, after three years of this benevolent care, the common man was worse off than ever.

Hoover staunchly upheld a protective tariff during his campaign, and declared that his administration had successfully kept American farm prices above world prices, aided by tariffs on agricultural products. He did not seem to see that this price-raising reduced foreign demand for American farm products. He hailed work-sharing without seeing that it perpetuated unemployment, and spoke proudly of the artificial expansion by business of construction “beyond present needs” at his request in 1929-30, without seeing the resulting malinvestment and business losses.

While claiming to defend the gold standard, Hoover greatly shook public confidence in the dollar and helped foster the ensuing monetary crisis by revealing in his opening campaign speech that the government had almost decided to go off the gold standard in the crisis of November, 1931—an assertion heatedly denied by conservative Democratic Senator Carter Glass.

The spirit of the Hoover policy was perhaps best summed up in a public statement made in May, before the campaign began, when he sounded a note that was to become all too familiar to Americans in later years—the military metaphor:

The battle to set our economic machine in motion in this emergency takes new forms and requires new tactics from time to time. We used such emergency powers to win the war; we can use them to fight the depression (321-323).

Myths about Libertarianism

Fred Foldvary Current Events, Economics , , , , , , ,

Many articles have recently appeared in magazines, web sites, and social media criticizing free markets and libertarian ideas. It seems to me that this opposition is a result of a growing interest in freedom as people realize that the economies of the world are in serious trouble. As people see continuing high unemployment, slow growth, ever greater government debt, environmental disaster, more turbulent weather, and endless wars, some folks seek solutions in greater freedom while others seek solutions in greater state control. The critics of libertarianism and economic freedom have fallen for several fallacies.

1. Critics confuse today’s mixed economies, a mixture of markets and government intervention, with a “free market.” A truly free market is an economy in which all activity is voluntary for all persons. Government intervention changes what people would otherwise voluntarily do. A pure market would not impose the taxation of labor and capital. It would not prohibit trade with Cuba. Free markets would not subsidize industry. Any peaceful and honest action would be free of restrictions and taxes. That is not the economy we have today in any country.

2. Critics use the term “capitalism” to falsely blame markets for economic trouble. Those opposed to private enterprise call today’s economies “capitalist.” They then note that the economy has trouble such as poverty, great inequality, unemployment, and recessions. The critics conclude that “capitalism” causes these problems. This illogic uses a sly change in meaning. They use the term “capitalism” as a label for the current economies and also to refer to free markets. It makes no sense to label the economy as XYZ and then say XYZ causes problems. The critics use the double meaning of “capitalism” to blame the non-existing free market for social problems. This confusion is often deliberate, as I have found that it is almost impossible to get the critics to replace their confusing use of the term “capitalism” with clearer terms such as either the “mixed economy” or the “pure market.”

3. Critics think that the “market” means “anything goes.” For example, they think that a free market allows unlimited pollution. They often call this, “unbridled capitalism.” But freedom stops at the limit of harm. In a pure market with property rights for all resources, pollution that crosses outside one’s own property is trespass and invasion. This violation of others’ property rights would require compensation, and that payment would limit pollution.

4. Critics confuse privatization with contracting out. They then blame private enterprise for problems such as occurs with private prisons. When government contracts with private firms to produce roads, it is still a governmental road. When governments hire private contractors to provide services in a war, it is still government’s war. Government sets the rules when firms do work under contract. Genuine privatization means transferring the whole ownership, financing, and operation to a private firm.

5. Critics overlook subsidies. Government distorts the economy with subsidies to agriculture, energy production, and other corporate welfare. The biggest subsidy is implicit: the greater land rent and land value generated by the public goods provided by government and financed mostly from taxes on labor and enterprise. Critics not only ignore this implicit subsidy but also overlook the explicit subsidies to agriculture and programs such as the promotion of ethanol from corn.

6. Critics do not understand the crowding out of private services because of government programs. The critics of libertarianism say that with less government, old folks and poor folks would starve and die because they would not receive social security and medical care. What they overlook is that the reason many of the elderly have little savings for retirement is that government took away half their income while they were working. Income taxes reduce their net wages, while sales taxes raise the cost of living. Low-income people pay little or no income tax, but they pay hefty sales and excise taxes, and they indirectly pay property taxes from their rental payments to landlords. Libertarians want to abolish poverty and have a society where all people have good medical care. They just want to accomplish this by letting workers keep their full pay, which would enable them to pay for their own medical services. Also, with no taxes on interest and dividend income, people would be better able to provide for their own retirement income, indeed to have much more than social security now provides.

7. Critics fail to understand contractual governance. A pure market would not consist of isolated individuals. Human beings have always lived in community associations. In a free market, communities such as condominiums, land trusts, and civic associations would provide the public goods that the members want.

8. The critics of market believe that corporations control the economy, exploit labor, and plunder the planet. Corporations do have power, but mainly because they obtain subsidies and monopoly privileges from governments. But labor unions and lawyers also lobby the government for power and favors. Rather than blaming private enterprise, the critics should examine how the structure of government enables special interest to obtain power and wealth.

Leo Tolstoy wrote in 1905 that nobody really argues with the economics and philosophy of Henry George and public revenue from land rent; the critics either misunderstand the concepts, or they create misinformation. The same applies to critics of libertarianism. The fact that the critics falsify the free market in criticizing it implies that the actual concept is sound, otherwise they would provide valid arguments.

Nobody has refuted the free market and the libertarian ethic of “live and let live”. The critics of liberty either misunderstand it or else falsify it. Even when their errors in logic, their false evidence, and their confused terminology are pointed out, the critics persist in their falsification. They are stubbornly anchored to their viewpoints. Why this is so is a problem I will leave to psychologists to figure out.

“The Idea Trap” e o nacional-inflacionismo venezuelano-argentino

claudio Liberty ,

Minhas breves observações sobre a Venezuela e a Argentina. Aqui.

Seven Ways Libertarians Sometimes Run Off the Rails

Warren Gibson Economics, Liberty, Politics , , , , , , , , , , , ,

I’m a dedicated libertarian but my first allegiance is to accuracy.  It pains me when I see libertarians making arguments that are inaccurate, irrelevant, or just plain wrong.  When they do so, they do themselves and our movement a big dis-service.  I list seven such arguments here.  More could be added.

  1. The Fed is privately owned. This is true only superficially. Member banks own shares of stock in one of twelve district Federal Reserve Banks and they receive dividends on those shares. But they have little in the way of genuine ownership privileges. They cannot sell their stock and their voting rights are very limited. The President of the United States appoints the Board of Governors. Just because a legal arrangement is given labels that suggest private ownership, that doesn’t make it so.

  2. The Bureau of Labor Statistics disguises the true unemployment situation by excluding workers who are “discouraged,” i.e., not seeking jobs. This is true of the U-3 unemployment figure which is the most widely cited figure, and the one the Fed says it is targeting. That figure is currently about 6.5%. The BLS also publishes its U-6 figure, which includes discouraged workers and currently stands at around 13%, down from about 17% at the height of the Great Recession. The BLS is not covering up anything here, although politicians may certainly choose to emphasize one figure or the other depending on what ax they’re grinding. Which is the “true” unemployment rate? There’s no such thing. The figures are what they are and observers can make of them what they will.

  3. “Chain-weighted” versions of the Consumer Price Index are politically motivated.  These adjustments are intended to recognize the substitution effect, the classic example of which is when the price of beef rises and the price of chicken doesn’t, people eat less beef and more chicken. Peoples’ cost of living rises less than it otherwise would. CPI increases as measured by a chain-weighted formula reflect this fact, and the resulting price inflation estimates come out lower than under the old approach. That flashes a green light to some conspiracy theorists. While these adjustments are tricky business, substitution effects are real and the attempt to compensate for them should not be impugned.

  4. The Consumer Price Index is politically manipulated by excluding food and energy. There are many versions of the CPI. One of them excludes food and energy because those prices are usually very volatile. That figure may be useful to economists who want to filter out volatile effects and focus on secular trends. Again, the figures are what they are, and politicians or for that matter we bloggers can use or misuse them as we wish.

  5. “Banksters” control the U.S. government. There is a grain of truth in this one. The big banks are both victims and beneficiaries of government dominance of banking and finance. The reality of government regulation is that regulated firms employ many very smart and very well paid individuals who are constantly finding ways to manipulate or sidestep the regulations to which they are subject. The fact is that the regulators and the regulated are very thick. Banking and finance are controlled by a cabal of government and Wall Street firms and individuals. It’s a mistake to say that either group totally dominates the other.

  6. Global warming is a myth and a scam. Ron Paul, whom I admire very much, blotted his copy book when he said on Fox News, “The greatest hoax I think that has been around for many, many years if not hundreds of years has been this hoax on […] global warming.” A few basic facts are beyond dispute: (a) carbon dioxide is a greenhouse gas, (b) CO2 levels are at an all time high, and (c) human activity is the primary cause of the increase. Beyond that, the evidence starts to get sketchy and incomplete. We do seem to have melting polar ice caps, record high temperatures in some places, droughts, etc. But overall there has been almost no temperature increase during the last ten years or so.  Projections of rising temperatures and rising sea levels appear to be too pessimistic. This is a very complex issue and one where biases can overwhelm us if we aren’t careful. Statists are prone to accept the global warming thesis because they see it as a way to increase state power. Libertarians want the issue to go away for the same reason. This would be a great time for all parties to step back an exercise some epistemic humility. There’s a great deal about this issue that we just don’t know.

  7. Let’s get rid of the state entirely, and all will be well. Given the present primitive degree of evolution of our species, a new state will pop up wherever an existing one is overthrown. The key to peace and prosperity is not anything so simple as abolition of the state, but to convince enough people, thoroughly enough, of the advantages of long-term cooperation. Good institutions will follow.

Do we have a Natural Right to be Annoying?

Fred Foldvary Liberty , ,

by Fred Foldvary

Suppose somebody is walking along the sidewalk carrying a big sign saying “I hate you.” Is he violating your natural rights? Should the state prohibit him from being annoying? Does freedom imply being protected from being annoyed, or does it protect our right to be annoying?

The citizens of Brighton, Michigan, believe that we have a right to not be annoyed. In 2008 the city council enacted an ordinance authorizing the police to cite anyone who is annoying in public “by word of mouth, sign or motions.” Violators will pay a fine. Brighton is not alone in this war on annoyance. Royal Oak, Michigan, also had such an ordinance, which serves as a model for other cities to copy.

A common source of public annoyance in some cities are beggars who ask for money as one passes by or, worse, come up to you with a sad story. Now, with the anti-annoyance ordinance, one can call the police, and the beggar will have his food in jail if he refuses to accept the ticket.

In some places, guys walk down the street in baggy pants that hang low. Another annoyance is inconsiderate guys who walk around with a loud portable music player; the music itself is often cacophonous, hence annoying, Those who are annoyed by such fashion and bad taste can now call the police and ask to have the offenders cited.

In economics, uncompensated bad effects on others are called “negative externalities.” The textbooks say that government can correct this by charging the person who emits the externality for the social cost. Evidently Royal Oak and Brighton have implemented this principle. You annoy, you pay.

Unfortunately, if you walk into a shop and seek some service, but the worker there is yakking on her cell phone, it is very annoying, but in Brighton you may not call the police, since the shop is a private place.

But what if the police are annoying? The police should not be above the law. If you are annoyed by a police officer, you should be able to call other police and have the officer cited.

You get a traffic ticket and the judge pounds the gavel and declares, “guilty!” Very annoying, and the court is a public place. You can get back at the judge; call the police and have the judge cited! But that would annoy the judge, so he will have you cited too. Now you have become annoyed again, and can have the judge cited for citing you. After all, if judges are above the law, we have no law.

What a wonderful weapon is this anti-annoyance ordinance. If your neighbor annoys you by hanging underwear in his back yard, call the police! Threaten to cite him, and he will have to do as you say. But that might annoy him, and then you have to do what he says. Whoops, now they are both slaves of one another. At least it’s equal.

Children are often annoyed by the restrictions and punishments imposed by their parents. They can now do something about it. When they are shopping or otherwise out in public, parents are often annoyed by their children whining, crying, complaining. parents can now tell their children that they will call the police if the kids don’t stop being annoying.

Perhaps the residents of Brighton and Royal Oak find this editorial annoying. Too bad; they can’t do anything about it unless I show up in those towns. I will make sure I never enter those towns.

The unemployment rate in Michigan is nine percent, and its major city, Detroit, is in bankruptcy. What I want to know is, if the residents find the bad economy annoying, who gets cited?

(Note: this article is adapted from “Do we have a Constitutional Right to be Annoying?” in The Progress Report, 2009.)

Some quick thoughts about political entrepreneurship

Brandon Christensen Law , , , , , ,

The Wall Street Journal has a weekend interview feature with an entrepreneur who founded Airbnb, a company that has been getting rich by exploiting the so-called “sharing economy.” Overall it’s an interesting read (I think the term “sharing economy” is misleading, but it is a stroke of marketing genius; “I’m not making money: I’m helping people share stuff!”).

However, after reading Rick’s recent thoughts on entrepreneurship and re-reading my own musings on how democracy works, this passage stood out to me like a sore thumb:

By year’s end, Airbnb says it will have booked more overnight stays than the Hilton and InterContinental hotel chains.

As might be expected, hoteliers and hospitality-industry regulators are suspicious of the Airbnb model. In October, New York state sued the company for violating a law passed in 2010—just when Airbnb was picking up steam—barring private citizens from renting an entire apartment for less than 30 days.

Why on earth would New York state undertake such a ridiculous ban? Ostensibly for safety reasons, right? Or maybe to better ensure that labor regulations remain up to par?

The law that hotel chains used to sue its competition strikes me as the perfect example of how cronyism works. The hotel chains are losing some of their market share to innovative competitors, but instead of improving upon their own models they turn to the political process, which (at least in the US) provides guaranteed access to any faction who would like to use it.

Just like in the marketplace, though, guaranteed access does not mean guaranteed results. Enter the entrepreneurial spirit. Except instead of finding ways to make money, the political entrepreneur is finding ways to prevent competition. This second type of entrepreneurship is also driven by self-interest. Libertarians, I think, recognize the dual nature of self-interest (in markets: good; in government: bad), but I cannot think of any literature off the top of my head that deals with this topic.

What I can note is that many people get the nature of self-interest completely wrong. In the minds of many, if not most, people, self-interest is something that only occurs in the marketplace. From this mindset springs many of the fallacies about government regulations and taxes that we often read about in the press. Whether this mindset is a product of genuine or willful ignorance is a topic that I think deserves further scrutiny.

Why is it, for example, that many people do not see that self-interest drives the political process itself? I know that the discipline of ‘political economy’ deals with self-interest in the political process, but even here I see a tendency to treat political entrepreneurs as more noble than the entrepreneur of the marketplace (with a few exceptions, of course). Support for higher taxes on corporations, or support for more stringent government regulations, is often very prominent among the general public and among elites. The general public thinks it is supporting itself against “big corporations” when it supports these policies, as do elites, but in reality these regulations and taxes are driven by an entrepreneurial process that desires to favor one faction over all others.

Am I missing anything? I know I’m missing a bunch of stuff.

Around the Web

Brandon Christensen Current Events, Links , , , , , , , , , , ,
  1. Recent Mexican reforms and the impact on the United States. From Gary Becker.
  2. Is the Pope’s Capitalism Catholic? Read this for the concise history lesson on Argentina rather than for the Pope’s opinion about public policy.
  3. Sandy Ikeda asks: Who is really threatened by innovation? Rick’s recent musing on political entrepreneurs can also shed some light on Ikeda’s question.
  4. The Liberty Constitution, Or, What About Slavery? Some libertarian legal theory for dat ass.
  5. “Diplomacy.” A transcript of Rand Paul’s recent speech on US foreign policy.
  6. Why the world needs more globalization, not less.

David Theroux’s latest on Secular Theocracy, Part 2

Brandon Christensen Current Events, Links, Philosophy , ,

“Duck Dynasty and the Secular Theocracy, Part 2”

Part 1 can be found here. For more Secular Theocracy as a concept, start here. David founded the Independent Institute, a highly-regarded think tank in the San Francisco Bay Area. In the summer after my first semester of college (2009; I started college in Feb of 2009 after hanging out in Ghana – long story!) I had the opportunity to attend the Independent Institute’s summer seminar for students.

In fact, that summer I attended four seminars put on by various libertarian think tanks and the Institute’s was the first of the summer. I really, really enjoyed it and was able to make some lifelong connections. For example, Dr Foldvary – the co-founder of this blog – was one of the lecturers there. Here is the Institute’s main web site.

Introducing the Weekly Wakeup

Adam Magoon History, Liberty , , ,

History is one of my passions and one I share with the late Murray Rothbard.  His examinations and refutations of the commonly accepted truth were one of my early inspirations into exploring libertarian thought.  I urge you to consider this quote from Plato’s Apology: “I am wiser than this man, for neither of us appears to know anything great and good; but he fancies he knows something, although he knows nothing; whereas I, as I do not know anything, so I do not fancy I do. In this trifling particular, then, I appear to be wiser than he, because I do not fancy I know what I do not know.”  This is the first in what should be a long series of weekly blurbs about common misconceptions and downright lies about history.  I will be looking forward to responses and suggestions for future topics in the comments.

Weekly Wakeup for 01-17-2014

Myth:  Early European colonists in North-America enacted a systemic genocide of native peoples from the start.

Reality: “The most hideous enemy of native Americans was not the white man and his weaponry, concludes Alfred Crosby,’but the invisible killers which those men brought in their blood and breath.’ It is thought that between 75 to 90 percent of all Indian deaths resulted from these killers.”

Another source confims:

“[B]ased on the data, the team estimates that the Native American population was at an all-time high about 5,000 years ago.

The population then reached a low point about 500 years ago—only a few years after Christopher Columbus arrived in the New World and before extensive European colonization began.

Study co-author Brendan O’Fallon, a population geneticist who conducted the research while at the University of Washington in Seattle, speculates that many of the early casualties may have been due to disease, which ‘would likely have traveled much faster than the European settlers themselves.’

For instance, the Franciscan friar Toribio de Benavente—one of the first Spanish missionaries to arrive in the New World in the early 1500s—wrote that Mexico was initially ‘extremely full of people, and when the smallpox began to attack the Indians, it became so great a pestilence among them … that in most provinces more than half the population died.'”

Myth: This disease epidemic was directly caused by settlers through planned biological warfare.

Reality:

“Unfortunately for this thesis, we know of but a single instance of such warfare, and the documentary evidence is inconclusive. In 1763, [ed. Notably long after the “500 years ago” mark where the population was already markedly declined] a particularly serious uprising threatened the British garrisons west of the Allegheny mountains. Worried about his limited resources, and disgusted by what he saw as the Indians’ treacherous and savage modes of warfare, Sir Jeffrey Amherst, commander-in-chief of British forces in North America, wrote as follows to Colonel Henry Bouquet at Fort Pitt: ‘You will do well to try to inoculate the Indians [with smallpox] by means of blankets, as well as to try every other method, that can serve to extirpate this execrable race.'”

I would like to point out that this attack, if it ever did actually happen, was initiated not by individual settlers but instead by the military government in that region.  A group that I do not and would not defend under any circumstances.   I would also like to preemptively say that I am not attempting to justify the forced relocation of Native peoples later in history, wars waged by either side or the murder of civilians by either group.  Instead I merely wish to question the assertion that there was an intentional and premeditated genocide.  A fact that seems obvious when you consider up to 90% of the native population was already dead from disease before the first colonists even arrived.

What is entrepreneurship and why should you care?

Rick Weber Economics , , , , , , , ,

The word entrepreneurship is thrown around a lot, but rarely defined. As far as I can tell nobody really believes (or is willing to admit they believe) that entrepreneurship is anything less than highly important (“Green child entrepreneurs are our future! Support our troops against breast cancer!”). It’s probably a wise political move to not pin down the idea because it means anyone’s cronies can be considered entrepreneurs. Speaking of which, “crony” is almost the antonym of entrepreneur. Cronyism evokes images of stagnation, inefficiency, “innovations” that make things worse, and opportunities for genuine improvement that are ignored.

Invisible hand

So what does entrepreneurship mean? There are two general definitions, and both bear on the question of how to go about having a peaceful, productive, and morally praiseworthy society. The more general of the two is judgment in the face of uncertainty. That is, given that we don’t know what tomorrow will look like, and we certainly don’t know what the world will look like in 10, 25, or 50 years, we have to make wise, forward-looking decisions. We don’t have enough information to simply plug the relevant data into an Excel spreadsheet and get the “correct” action from a formula. In other words, understanding the ubiquity of entrepreneurship means that we still consider The Use of Knowledge in Society to be relevant.

The more specific definition is pursuit of pure economic profit (above “normal returns to capital, labor, etc.”) by pursuing hitherto un- or under-exploited opportunities. Such breaks from the status quo are the creative acts necessary for economic progress. Entrepreneurship is the human face of economic change that provides a micro-level description of what economists might otherwise wave their hands over and call “technology.” This sort of entrepreneurship is an important source of uncertainty about the future. 2014 is so much different from 1964 because of the actions of innovative entrepreneurs out to improve their own lives.

You’ll notice that I haven’t defined entrepreneurship in a way that actually is inimical to cronyism. That’s because not all entrepreneurship is productive. Destructive entrepreneurship is the pursuit of economic profit that makes the entrepreneur better off at the expense of someone else resulting in a net-loss. So we should be concerned not only with allowing individuals the autonomy necessary to be entrepreneurial (rather than merely reacting formulaically to top-down commands), but also with establishing institutions that direct people to help others.

Invisible hand