knowledge problem

A question on adverse selection for the economists

Rick Weber Economics , , ,

I can’t think of an example of adverse selection occurring without asymmetric information. Does anyone else know of one?

But as long as I’m here waiting for answers, let me think through an aspect of this…

The classic example of adverse selection in my mind is the Death Spiral. (My dad sells group benefits, so growing up I would hear about some of the weird outcomes of different states’ insurance regulations on things like pre-existing conditions.) Trying to pull apart adverse selection (AS) and asymmetric information (AI) has led me to an interesting thought: The adverse selection problem created by preventing insurance companies from using the (very sensible) policy of not covering pre-existing conditions (i.e. of only insuring insurable things) may unravel some epistemic aspect of this situation.

The private costs of sharing information about pre-existing conditions falls and this might have modest benefits to offset the significant costs of AS. I’m sure health economists would be happy to have this sort of information, and maybe it would give insurance companies’ actuarial division some new insights that could apply to other markets.

The Fog of Foreign Policy

Edwin van de Haar Links , , , , , ,

“The Fog of Foreign Policy: Why only ‘least bad’ options are available in Syria, Iraq and other global hotspots”

rr4

Sound libertarian analysis, highly recommended!

How the Left Failed France’s Muslims: A Libertarian Response

Brandon Christensen Current Events, Links, Politics , , , , , , , , , , , ,

Walden Bello, a sociologist in the Philippines, has a piece up over at the far-Left Nation titled “How the Left Failed France’s Muslims.” As with everything Leftist, it was packed with mostly nonsense coupled with a couple of really good nuggets of insight. The nonsense can be explained by the Leftist urge to attribute grand theories that don’t involve an understanding of supply-and-demand to problems dealing with oppression. Below is a good example of another weakness of the present-day Left:

Failure of the French Model of Assimilation

In the “French model,” according to analyst Francois Dubet, “the process of migration was supposed to follow three distinct phases leading to the making of ‘excellent French people.’ First, a phase of economic integration into sectors of activities reserved for migrants and characterized by brutal exploitation. Second, a phase of political participation through trade unions and political parties. Third, a phase of cultural assimilation and fusion into the national French entity, with the culture of origin being, over time, maintained solely in the private sphere.”

What the technocrats didn’t face up to was that by the 1990s the mechanism sustaining the model had broken down. In the grip of neoliberal policies, the capitalist economic system had lost the ability to generate the semi-skilled and unskilled jobs for youth that had served as the means of integration into the working class for earlier generations of migrants. Youth unemployment in many of the banlieues reached 40 percent, nearly twice the national average. And with the absence of stable employment, migrant youth lacked the base from which they could be incorporated into trade unions, political parties and cultural institutions.

Impeded by ideological blindness to inequality, political mishandling of the Muslim dress issue and technocratic failure to realize that neoliberalism had disrupted the economic ladder to integration, authorities increasingly used repressive measures to deal with the “migrant problem.” They policed the banlieues even more tightly, with an emphasis on controlling young males—and, most notably, they escalated deportations.

Notice how Bello doesn’t challenge the fact that the French government has a model for integrating human beings into a system it assumes is already in place? That’s the problem in Europe (and Japan/South Korea), but instead of acknowledging this – or even recognizing it as an issue – Leftists throw in terms like “capitalist economic system” and “neoliberalism” to explain away the failures of the French state’s central planning efforts. Naturally the real threat according to Bello is a Right-wing populism rather than the widespread, unchallenged belief (including by Bello) that government can assimilate one group of people with another in stages.

Just keep government off the backs of people, and they’ll associate in peace (peace is not the absence of conflict, of course, but only the ability to handle conflict through peaceful means, such as through elections or boycotts or marches or consumption). Does this make sense? Am I being naive here?

Ceding power to a central government in order to integrate immigrants into a society in a manner that is deemed acceptable to the planners is going to cause conflict rather than temper it. Planners are beholden to special interests (this is not a bug of democracy but a feature; ask me!), and they cannot possibly know how their plans are affecting the individuals being planned for. Immigrants, left largely to their own devices (which include things like communities, religion, and creativity), are beholden to their own interests (again, which include things like communities, religion, and creativity). Which way sounds less likely to cause resentment all around? Again, am I being naive here? Am I knocking down a straw man? Is this really how European governments approach immigration and assimilation? Is this really how the US approaches immigration and assimilation? These are genuine questions.

An even bigger question remains, of course: how can Europe better assimilate immigrants? Open borders, discussed here at NOL in some detail (perhaps better than most places on the web), is one option, but in order for open borders to work you need political cooperation, and political cooperation means more than just cooperation on matters that interest libertarian economists. Thus, I argue for federation instead of plain ol’ open borders. Another option would be to have governments in Europe cease planning the lives of immigrants for them. This option is a very viable short-term policy that probably does not get the attention it deserves because Leftists are currently unable to see the forest for the trees. Exposing neoliberalism and capitalism is, arguably, more important than petty day-to-day politics after all.

Thoughts on climate change

Rick Weber Current Events, Economics, Politics , , , , , , , , , ,

Last week I heard a sermon on climate change (no, it was an actual sermon). I’m roughly agnostic on the existence and degree of climate change, but I err on the side of assuming it is a large problem of externalities with no obvious property rights solution and will have costs. And I think that under those assumptions there is an important moral element to it. With that in mind, below are some of my thoughts on the weak points of the sermon:

1) Authority is only a starting point; we cannot defer ultimate responsibility to authority. If an expert or someone I trust tells me something about X, and I don’t have any prior knowledge about X, then I believe them. In the case of global warming there are two basic sorts of information you will get from information: a) diagnosis (temperatures could rise X degrees in the coming century), and b) prescription.

The climatology involved in a) is well above my pay grade, and so rather than undergo the costs of informing myself on the existence or importance of climate change, I just figure the truth is somewhere in the middle of what reasonably informed people say and instead focus my effort on my areas of comparative advantage. Now the actions in b) are typically about reducing waste and that’s well within the realm of economic thinking, so I’ll comment on that!

1b) Blindly deferring to authority to assuage your guilt is wrong and bad. Someone says you should drive an electric care to save the environment? Don’t do it before thinking through the matter, this is a big decision for most people. Where’s the energy coming from to power that car? (Coal. That is burned hundreds of miles away from your car… that’s like having a car with a hundred mile long drive shaft.) How much energy and material does it take to make the car? (Hint: look at prices.)

2) It’s called climate change, not climate universal and uniform worsening. If climate change means a warmer climate for Canada and Russia, that will come with extended growing seasons and savings on winter heating costs. Burma? It’s probably going to suffer a lot. Climate change will surely have the biggest impact on the poorest people in the world, and this is where I see the real moral issue because…

3) We can respond to climate change in a way to reduce suffering. Specifically, we can open borders. First off, that would increase human well being, with an enormous benefit to the world’s poorest people. Second, the effects of climate change won’t harm the poor as much as they could. Is climate change still a bad thing if we do this? Sure, but if a building is burning, why not help people get out?

Loose ends:

Should I recycle everything? Only if it will actually help. Recycled aluminum is chemically identical to virgin aluminum and uses fewer resources to produce (which is why it’s cheaper!). Recycling paper creates a lower quality product, uses a lot of energy and creates pollution.

Paper bags are brown, that’s good, right? Plastic bags are almost ethereal; they use a fraction of the material per unit of carrying capacity resulting in big savings. Yes, there are offsetting costs to using plastic, but it isn’t as simple as “this brown, it must be natural and therefore good!” And while we’re on the topic, brown M&Ms are stupid. There’s a layer of white sugar between that brown outer layer and the actually brown chocolate. Brown M&Ms are as unnatural as any of the other colors.

Should I buy local? Maybe if you live in California, but not if you live in Massachusetts. The biggest environmental impact of food is growing it; plowing fields, planting, watering (outside where the water could just evaporate!), and harvesting use a lot more energy than transportation. So if you live in a place with poor growing conditions, then buying local only does more harm. That said, fresh food tastes better, so by all means pay the cost if you value the flavor, just don’t delude yourself into thinking you’re reducing energy usage by doing so.

Consider opportunity cost and present value! So you’ve got a solar panel and now electricity is free for the next 20-30 years! Or you’ve installed new modern insulation for your home. Or you bought a car that costs less to run (and you’ve promised not to increase your usage). But at what cost? If your solar panel used 40 years worth of energy to build and install, then you’ve done more harm than good. And you’ve done that harm upfront. Even if one of these investments has a positive return (it saves more resources than it uses), you should still consider whether it’s a good investment. We don’t have unlimited resources, and that means that if you spend $10,000 on insulation that will give you a 0.4% ROI then you’ve given up the chance to invest that money into something that will generate more good.

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

American Foreign Policy: Predictions, Assumptions and Falsehoods

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

On November 1st 2011 I got into an argument with Dr Delacroix about US foreign policy. During that time, if you’ll recall, a debate on the merits and demerits of bombing Libya was raging across the blogosphere and in the halls of power. Here is what I wrote in the heat of the moment two years ago today:

Time will tell, of course, which one of our predictions comes true. In two years time, Tunisia, which did not get any help from the West, will be a functioning democracy with a ruling coalition of moderate Islamists in power.

The Egyptian military will be promising the public that elections are just around the corner, and Libya will be in worse shape than it is today. Two years from today, Dr. J, you will be issuing an apology to me and making a donation to the charity of my choice.

Since you are very good at avoiding the facts on the ground in the name of democratic progress, I think we should establish a measurement rubric by which to measure the progress of Libya. How about GDP (PPP) per capita as measured by the IMF?

Not too shabby, eh? In case you haven’t been staying up to date on current events in the Middle East, Tunisia is a functioning democracy with a ruling coalition of moderate Islamists in power. It is not Switzerland or Iceland, but it is doing much better than the two states who were on the receiving end of US “help” during the Arab Spring.

Egypt, for example, is currently being run by the (US-funded) military, and the military is promising Egyptians that elections are just around the corner.

In Libya, GDP (PPP) per capita for 2013 started off the year at $11,936 (in international dollars). In 2011, prior to the uprisings and subsequent US bombing campaign, Libya’s GDP (PPP) per capita clocked in at $14,913 (you’d have to look at 2010 to see where Libya started off). That’s a nearly $3,000 drop in purchasing power parity. Here is the relevant IMF data (it starts off in 2010 and you can go from there).

Perfectly predicting the current mess in the Middle East has less to do with my genius than it does with applying a general libertarian framework to the situation. For example, I know that government is very bad at doing nearly everything. Government is a name we have given to an organization that has a monopoly on force. This monopoly on force is usually consented to because it is expected that it will provide an honest court system and a way to interact with other polities (“diplomacy”). When this monopoly on force is applied to anything other than these two functions, peace and prosperity give way to war and impoverishment. The trajectory that war and impoverishment take in a society depends on any number of variables, but the general libertarian framework I just outlined never fails to impress.

Now, my perfect prediction was made in the heat of the moment during an argument. If my argument was right, what did the other side of the debate have to say? Is it at all possible that Dr Delacroix had an argument that somewhat conformed to reality as well? Decide for yourself, and remember, this was written near the end of 2011:

There are several benefits to the Libyan/NATO victory for this country […] First, rogues and political murderers everywhere are given a chance to suppose that if you kill Americans, we will get you afterwards, even if it takes twenty years […] Two, Arabs and oppressed people everywhere are figuring that we mean it when we say we like democracy for everyone […] Three, this Obama international victory will cost him dearly in the next election. A fraction – I don’t know how large – of the people who voted for him the first time around oppose all American military interventions.

I don’t know about you, but it looks as if Dr Delacroix got Libya, the rest of the Arab world and American domestic politics horribly wrong, and on every level possible. If I am being disingenuous or unfair to Dr Delacroix’s argument, please point out to me where I go wrong in the ‘comments’ section.

Let’s take a second to reflect on something here. I was factually correct in my assessment of what would happen in the Middle East if the US intervened militarily. Dr Delacroix was factually incorrect. I think the drastic difference in outcomes occurred because our assumptions about how the Middle East works are informed by different history books. This is odd because we agree on nearly everything else.

Were I proved to be wrong, and shown how devastating the effects of my assumptions on societies could be,  I know I would do some deep questioning about my prior assumptions of how the world works.

There are four assumptions Dr Delacroix makes, in recent blog posts, that I believe are unfounded. When these unfounded assumptions have gained traction policy-wise, the consequences have been devastating. When these unfounded assumptions have been defeated in open debate, the consequences have been minute. By pointing out these assumptions, and ruthlessly criticizing them, I hope to provide a framework for those who read this blog to use when thinking about foreign affairs.

  • False Assumption #1: “Bullies will try to pull off worse and worse brutalities until they become intimidated. The unopposed brutalities of one bully encourage others to go further. Some who had the potential but never acted on it will be encouraged by the impunity of others to become bullies themselves.”

Comparing leaders of authoritarian states to schoolyard bullies is a bad way to go about understanding international relations. I think this is done on purpose, of course, in order to obfuscate the reality of a given situation. Dictators in authoritarian states often enjoy broad coalitions of support from the populaces over which they rule. In Iraq, for example, Saddam Hussein enjoyed support from Sunni Muslims, Christians, secularists, socialists, trade unions, domestic corporations, women’s rights groups and the poor. Dictators often enjoy broad support from their populaces because of the fact that they bully, to use Dr Delacroix’s term, the bullies (see False Assumption #2 for more on this).

Here is another example: Bashar al-Assad has broad support in Syria because he protects religious and ethnic minorities from the passions of the vulgar mob. Dictators rarely care about the actions of dictators in other countries, unless it serves their own domestic purposes, and slaughtering people randomly is something I have never heard of a dictatorship doing. A dictator’s attacks are calculated, quite coldly I admit, so as to bolster support from the factions they are allied with. Dr Delacroix would like nothing more than to have the Middle East actually be a place where dictators take comfort in the actions of other dictators. Were this to be true, his argument would be right. His predictions would come to pass. Alas.

  • False Assumption #2: “By the way, as little as four years ago and even less, Western liberals and misguided libertarians were still blaming the American military for Iraqi on Iraqi violence. The US military is gone; the violence is rather worse.”

Attempting to sweep the violence and high death count associated with the US invasion of Iraq under the rug does nothing to inspire confidence in Dr Delacroix’s framework. The Iraqi-on-Iraqi violence occurred after the US military illegally removed the bully’s bully from his position of power. Prior to the US military’s illegal invasion, the Iraqi-on-Iraqi violence Dr Delacroix points to was kept in check by Saddam Hussein’s heavy-handed tactics. When Hussein gassed Kurds, for example, he did not do so simply because the Kurds “revolted” against his rule. He did so because the Kurds had been murdering Arabs and engaging in terrorist activities that targeted Iraqi infrastructure. The intrastate warfare in Iraq was quite negligible until the United States decided to break its own laws and illegally invade and occupy Iraq.

Of course, you can always choose to believe Dr Delacroix’s theory of events, but I think the results of our predictive power speak for themselves (on the inevitability of intrastate warfare in post-colonial states, see the discussions about “post-colonialism,” “secession” and “decentralization” here at NOL).

  • False Assumption #3: “In World War Two, we could have stopped the genocide of the Jews or slowed it to a crawl. We did not because there was a strong but vague reluctance to ‘get involved.’”

In 1939 France and the United Kingdom had worldwide empires. The Soviet Union was 25 years old. So were the small, independent states of Turkey, Hungary and Austria. Germany, despite its defeat in World War 1, was an industrial power. The was no such thing as cruise missiles. There was no such thing as jet airplanes. There was no such thing as satellites. Or the internet. The Jews that were slaughtered in Europe lived in places that could not be reached by the American military of 1939. Indeed, they lived in places in Europe that could not be reached by the American military of 1945. The Eastern Front in World War 2 was many things, but certainly I think you can see why it wasn’t a “reluctance to get involved” on the part of the American people that is partly responsible for the Holocaust. To assume that the American military could have marched into Eastern Europe during World War 2 and stopped, or even slowed, the Holocaust is delusional.

  • False Assumption #4: “Today, I am ashamed to be an American because of our passivity with respect to the slaughter of Syrian seekers for freedom.”

Since the end of World War 2, when the US assumed its place as the world’s most prominent polity, Washington has continually opted to support the socialists (Ba’athists, Nasserists, Ghaddafi, etc.) over the Islamists in the Arab world (liberal Arabs simply, and unfortunately, emigrate to the West). The most obvious reason for this support is that the socialists do not send their agents to fly planes filled with people into commercial buildings filled with people. Pretending that the US is putting its head in the sand is disingenuous. Washington is well-aware of the consequences of letting Assad fight it out with the Islamists. We have made our decision after weighing the costs and benefits of every option available. We did this through open debate. Socialists make better enemies (and allies) than Islamists.

Now, these are just some small examples of jingoism and delusions of grandeur I have picked out. There are many more examples, especially in the national press, but Dr Delacroix’s are much, much better reasoned than any of those. If you are reading the op-eds in the national press rather than Dr Delacroix you are going to be woefully misinformed about the nature of the world. Your brain will be slightly more malnourished than it otherwise would be (this is one of the reasons why I like blogging with him). His arguments are informed by a lifetime of prestigious scholarship; they are informed by somebody who has the benefit of understanding two distinct cultures in an intimate way.

And look how incredibly wrong he has been proven to be. Assumptions matter. So, too, does truth and falsehood.

See the Cat: The Heart of Economics in One Story

Fred Foldvary Economics , , , ,

A man was walking down a shopping street and came to a store window where there was a big drawing full of lines and squiggles. A sign by the drawing asked, “Can you see the picture?”

All the man could see was a chaos of lines going every which way. He stared at it and tried to make out some kind of design, but it was all a jumble. Then he saw that some of the lines formed ears, and whiskers, and a tail. Suddenly he realized that there was a cat in the picture. Once he saw the cat, it was unmistakable. When he looked away and then looked back at the drawing, the cat was quite evident now.

The man then realized that the economy is like the cat. It seems to be a jumble of workers, consumers, enterprises, taxes, regulations, imports and exports, profits and losses – a chaos of all kinds of activities. Here are fine houses and shops full of goods, but yonder is poverty and slums. It doesn’t make any sense unless we understand the basic principles of economics. Once we have this understanding, the economy becomes clear – we see the cat instead of a jumble. We then know the cause of poverty and its remedy. But since most folks don’t see the cat, social policy just treats the symptoms without applying the remedies that would eliminate the problem.

What is this economics cat? It starts with the three factors or resource inputs of production: land, labor, and capital goods. Land includes all natural resources and opportunities. Labor is all human exertion in the production of wealth. Capital goods are tools (such as machines and buildings) used to produce wealth. The owners of land get rent, workers get wages, and the owners of capital goods get a capital return.

Picture an unpopulated island where we’re going to produce one good, corn, and there are eleven grades of land. Continue reading →

A Free Market in Medical Services

Fred Foldvary Economics, Law, Politics , , , , , , , , , , ,

There are two directions for the reform of the U.S. medical services systems. One is towards welfare statism, the control of the medical system by the federal government, and the other is towards economic freedom, providing individuals and families a free choice in medical care.

Economic theory points to a pure free market providing the most productive and equitable economy and therefore medical services. Central planners lack the knowledge to efficiently allocate resources, and politics skews the outcome towards special interests.

Here are the reforms need to have a really free market in medical services: Continue reading →

The Predictable Failure of the Iraq War

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

I’ve gone over the knowledge problem associated with foreign policy before, and I believe it is sufficient to say that libertarians were right in deflating predictions by hawks that the illegal invasion and occupation of Iraq would go over smoothly. Hawks on both the Left and the Right oversimplified the situation in the Middle East. Their condescending tone towards both the Iraqi people and the broader Middle East guaranteed failure from the outset. Anybody who believes that a state – no matter how wealthy and powerful – can just waltz in to another state – no matter how poor and weak – and impose its will upon it is a fool.

Gene Healy reports from DC:

In a 2001 debate on Iraq with former CIA Director James Woolsey, my Cato Institute colleague, then-Chairman William Niskanen, argued that “an unnecessary war is an unjust war” and one we would come to regret having fought.

Niskanen was right. A new report from the Watson Institute for International Studies at Brown University tallies up the costs: nearly 4,500 U.S. troop fatalities, an eventual budgetary cost of some $3.9 trillion and more than 130,000 civilians as “collateral damage.”

[…]

Bill Niskanen, who passed away last year at the age of 78, never tired of reminding conservatives that war is a government program — and an especially destructive one at that.

If you add up the harsh economic sanctions imposed upon the Iraqis by the Democrats earlier in the decade, the 130,000 civilian toll increases significantly (to about half a million, most of whom were children).

Only a foreign policy based around commerce, peace and honest friendship will succeed in both the short and the long runs. Luckily for us, it appears that there is a growing consensus on this argument among the population of the United States. It helps that most advocates of the war are either remorseful or they are becoming more and more discredited by the day. From Hitlery Clinton to Dubya to John McCain, the old guard is steadily giving way to a breath of fresh air. Air that is more suitable for a republic dedicated to individual liberty.

From the Comments: Foreign Policy and the Rule of Law

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

This excerpt comes from a debate I had with Dr. Delacroix on his main blog awhile back. It pretty much made me a star within Santa Cruz libertarian circles (i.e. four people now know my name). Behold:

The idea – nay wish! – that the newly liberated people of the Arab world will somehow elect secular, Western-friendly governments after 50 years of oppression by regimes that were perceived by the Muslim public to be secular and Western-friendly belongs to be filed under the category of ‘fantasy’, not foreign policy.

and this:

I think Egypt and Libya are going to be just as bad as they have been, if not worse. Only Tunisia, which did not rely on foreign support AND recently elected Islamist parties to their new government, will come out of this for the better. I hope I’m wrong, of course, but libertarians rarely are!

and finally this:

The idea that Paul knows everything about anything is one that sure does look a lot like dogmatism at first glance. But Ron Paul will be the first to claim that he does not know everything. That’s why he insists that everything go through the Constitutional process – including overseas activities. That is to say, Ron Paul’s idea of dogmatism is to adhere to The Rule of Law. Imagine that!

I highly, highly recommend reading through the whole exchange (it starts after a few other comments in the thread; just scroll down, you won’t regret it, and don’t forget the popcorn!).

From the Comments: Climate Change Advocates and Religion

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

Jacques Delacroix has a thoughtful response to an equally thoughtful comment by a climate scientist (full disclosure: the climate scientist is also a childhood friend of mine and a fairly decent man; I say “fairly decent” because he sometimes associated with people like me!) in his post on the peer review process. I thought I’d reproduce the whole thing here: Continue reading →

Bad Idea of the Year: Raise the Minimum Wage

Warren Gibson Current Events, Economics , , , , , ,

Who can live on $8 per hour these days? Surely, in a country as rich as ours, no one who is willing and able to work should suffer the indignity of such paltry wages. The solution is simple and obvious: pass a law. If you work, you get at least $10 per hour, period.  Anything less is downright indecent. And so we have a ballot initiative to make this happen in San Jose, California.

It’s anything but simple and obvious if we stop and look and think about what’s happening in the real world. Today I went to a small family-owned sandwich shop near my house. They are very popular and so four young workers, probably students from the nearby college, were jammed in the tiny shop with the two owners. The sandwiches are great but I also enjoy watching them hustle at lunch time. I’m quite certain the helpers were all earning minimum wage but had other sources of income or support. Far more important than their wages, which will quickly be spent, is the work experience that will last them a lifetime – and the confidence that comes from knowing they are earning their money by doing a job in the very best way they can.

The McDonald’s near me employs a few senior citizens, likely at or near minimum wage. They almost certainly have other income. Just being active and involved in productive activity gives their lives meaning and may well enhance their health and longevity.

The sandwich shop operates on thin margins which are being squeezed by rising food prices. If they had to pay their young helpers $2 more per hour they would probably close. But the nearby Safeway store, which has a sandwich bar, would very likely absorb part of the wage increase and pass the rest on to customers, which would be easier to do with their family-owned competitor knocked out. Continue reading →

Seeing the Forest for the Trees: Humanitarian War and the Omnipotent Expert

Brandon Christensen Current Events, History, Links , , , , , , , , , , , , , ,

I have made an effort in my blogging escapades to continually point out the underlying reasons for military intervention in poorer (often former colonial) states. Two things that have stood out to me are (1) the condescending display of arrogance on the part of the interventionist in regards to both differing arguments and the people involved in a conflict and (2) the high levels of confidence that these advocates have in their ability to predict the future based, presumably, on past experiences.

If you haven’t made the connection yet, these two characteristics are often exuded in Leftist intellectual circles, in Leftist popular culture, and in the Leftist’s moral compass.

Oftentimes, when I come across an advocate for humanitarian war (the doublespeak alone is enough to make me wonder), I am presented with the example of the mass slaughter of civilians in Rwanda during the ongoing conflict there in 1994. The gist of the argument seems to be two-fold: (1) that the West was hypocritical in its treatment of Rwanda and (2) that the West could have prevented, or at least, stunted, the horrific massacre of over half a million people in three months time. Continue reading →

Foreign Policy and Human Ignorance: The Attack on Non-Intervention

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

I have recently been having more than a few back-and-forth debates with my old sparring partner Jacques Delacroix concerning matters of foreign policy.  The most recent debate has produced a number of great insights and opportunities to further enhance an understanding of foreign affairs.

Against the backdrop of this lively and hopefully continuing debate is the recognition that both of us are extremely ignorant human beings, and that we know far too little about anything to be in a position to command or direct institutions that are not based upon mutual consent and agreement.  The one institution – government – that is widely regarded to be necessary for the use of coercion should have its monopoly on force widely distributed throughout various avenues of power and severely restricted by the use of legal precedent.  This small paragraph essentially sums up the foundation of both libertarian and conservative thought in the United States, and as you read through this essay (or any other writings believed to expound upon conservative or libertarian ideals) I would highly recommend remembering this small but important fact.

Indeed, if I had to pinpoint the exact locus of difference between a Leftist and a conservative/libertarian, it would be this fundamentally opposite view of man that each camp harbors.  Seldom have I met a Leftist  Continue reading →