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Posted at 6:54 pm on August 18, 2010, by Vroman
Lets look at Rand Paul’s outline of political stances. I agree with Rand about 85%. I hold more or less polar views on the bioethics and immigration categories, and Paul’s anti-war feelings are a little tepid for my tastes. The remainder though is quite inspiring. I suppose if you ever find a candidate you agree with 100%, you are probably looking at your own name on the ballot. So Rand Paul is strikingly wrong on a handful of issues, but on net would be a welcome addition to the Senate. I establish this backstory in order to discuss Rand’s controversial Civil Rights Act statements a few months ago. Speaking for the anti-Paul critics, I appoint my magic card rival Stephen Menendian, who got face time on Huffington Post. Nice work Steve.
First let me tell a personal anecdote regarding the consequences of racial job discrimination. I currently work for the business my grandfather started in 1951. Between that time and his death in 2005, grandpa was the sole decision maker and as far as I know, never once hired a non-white employee. All my memories of my grandfather are very fond ones of an incredibly hardworking, charitable, devoted family man. Though its pretty unavoidable looking back he was passively racist. And he suffered because of it! By subtly passing up qualified colored workers, we got stuck with a lot of burn out white trash guys. Many headaches developed over the years via his perverse hiring criteria. Gramps was a visionary businessman on the big picture deals, but certainly cost himself a lot in the details. This is exactly the result one would expect when arbitrarily limiting oneself to a smaller pool of applicants via a non-relevant criteria. Its a Gresham’s Law scenario where the bad apples are foisted off on to the firms who refuse to compete for the full range of workers. Not only do you lose good black workers, you tend to get the worse white workers as well. Since I’ve been responsible for hiring, we have actually had a disproportionately high representation of black and hispanic workers, relative to St. Louis demographics, even accounting for this income bracket. Not because I want to help out minorities for its own sake, but because I’m an unapologetic capitalist. I want to pay as little as possible, and this is who shows up to accept our offered rates, while meeting my minimum standards. In fact in my dedication to laissez faire, I am an even more color blind employer than typical corporations, since things like criminal records, functional illiteracy, and active drug addictions, do not deter me, if the applicant comes recommended. Given the unfortunate higher likelihood of low income minorities coming from environments that have left them with such negative characteristics, my company is slightly easier job opportunity. Discrimination is bad practice for both employee and employer. But Smennen makes it clear he doesn’t care about the efficiency arguments of non-racism, its solely a moral issue to him. I could make the more abstract case that there is no difference between the two. I will remain on more familiar territory today. We’ll take the simple case of a sole proprietorship as opposed to publicly traded company. This business is some individual’s property, just like his home. An employment contract is an invitation by the employer to show up on his property, do some work, and receive payment. The invitee is free to decline. I do not see this as fundamentally different from an individual inviting individuals into his home for social purposes, which they are likewise free to decline. The fact that money changes hands is the business of these two people after they have agreed to meet on the owner’s property. There is no reason an individual should have any less discretion in who he extends invitations to at his business, than at his home. If said businessman were to foolishly only offer invitations to work for pay to select ethnicities, this is not force or theft against them. Like, Rand Paul, I would support a non-discrimination policy for tax funded posts, and other public functionaries, but it is really not the government’s place to enforce morality upon citizens that does not transgress others rights. One does not have a right to a job at any particular business, any more than they have a right to walk in to a stranger’s house. To say otherwise, would give government carte blanche to enforce other moral paradigms regarding citizen’s private behavior; for example their sex partners, etc. Since we have relatively little control of what moral agenda is advanced by the ruling party of the moment, it is a wiser policy to reject government’s power to dictate morality at all. This said, I do think Smennen has a point that Rand is dissembling somewhat by trying to obfuscate exactly what portions of the Civil Rights Act he opposes. I presume Steve’s analysis of the legal history is correct, and thus as a libertarian, I, and Rand, should indeed openly oppose the Fair Housing Act in entirety. I would stress that there exist far higher priorities though for the goal of reducing government interference. We are so far removed from an acceptable political environment, that I would hesitate to even call it progress should the FHA be repealed as a first step. Paul is in a difficult position of course, since the logical conclusion of laissez faire leads to very politically incorrect places. Rand is presenting himself as more mainstream than his father, which is hard to do and remain ideologically consistent. I sincerely hope he does not give in to populism. Still, Rand Paul is undeniably a step in the right direction. Filed under: Uncategorized Comments: None
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Posted at 1:05 am on June 18, 2010, by Vroman
I heard Russ Roberts, noted rapper , speak tonight at some Republican club. Roberts expounded on strategies to rebrand small government propaganda efforts, and why this inspires a recent optimistic upturn in his perception of near future politics. Roberts is a good speaker, but I remain unswayed. Certainly his ideas have merit, but I don’t follow that implementing such will make a difference. Status quo corporatism is going to grind on indefinitely until cities are burning. Roberts makes the facetious observation that big-govt proponents have more marketable objective, and lofty goals are more attractive than a concrete method. Its more engaging to claim one is “saving the children” and yet be fuzzy on the details of accomplishing that, or even abjectly fail; than to have a clearly logical economic algorithm that results in pedestrian outcomes like marginal increases in prosperity. “No one writes folk songs about efficiency”, Russ quips. The upsides of decentralist thought are more about opportunity cost and deadweight loss, and other painfully real, but not readily visible effects. This results in us defaulting to the easier rhetorical tactic of simply exposing a litany of government failures, and thus getting a reputation as unfun cynics relegated to the sidelines. Roberts goes on to suggest re-framing the debate as not government vs business or collectivism vs individualism, but rather recognize that people are drawn to comforting concepts such as community and cooperation. Thus small-govt advocates should boldly co-opt the left’s central term, Socialism, re-defined as a system where people are given the incentives to freely socialize in all respects from the bottom-up, rather than top-down central planning. All well and good, and maybe this or variations on the theme could indeed spark some life into general anti-statist sentiment. But bottomline, I see no reason to predict any change in the underlying systemic variables that allows continual siphoning of wealth into the inner circle of lobbyists and decision makers. Ever. To people who naively accept face value assumptions that policy output ever has true common-good motivations, I suggest imagining the company you work for ran the government. Would your co-workers, bosses, and employees do a good job running the country? Of course not. They would have the exact same personality clashes, vested interests, and petty power plays they do in mundane private industry. Government bureaucracies are no different than any other institution composed of self interested human beings. Sure there are exceptions of self-sacrificing crusaders, but on net, structural incentives dominate. These are the key powerful incentives faced by government and those it serves: -Regulatory capture At any given juncture, if a negative-sum policy is on the table that reduces overall economic activity, but diverts a net gain in resources to a minority, there is a tendency for the minority to devote a greater percentage of their aggregate potential gains towards lobbying efforts to ensure the policy is enacted, than the percentage the majority is willing to spend of their potential losses. Making the reasonable assumption that behind the scenes government policy is a flat bidding war, then the special interest will get its way the lion’s share of the time. In this way there is a ratchet effect that generates on net ever more restrictive regulation and protectionism. On the other end of the equation, in terms of transfer payments, a slim majority will always have the incentive to take any opportunity to vote itself payouts from the fund that all of society pays into. Again a ratchet effect that ensures ever larger welfare schemes and public projects. Government will always be called on to tax, spend, and regulate more, because it serves those with the power to make the decision at that moment, regardless of the damage to overall standard of living. The economy will produce less, while spending rises. The deficits will be financed by borrowing for a time, but in the end inflation has to take over, and yet still nothing changes the underlying incentives, so trade will be stifled even more, more taxes will discourage remaining productive opportunities, and more spending will be piled on. Even up until the final moment, none of this changes. Wheelbarrows of fiat currency, martial law, emergency powers, etc. There has to be some kind of violent disconnect between our current structure and any hypothetical stable growth encouraging system. There is no way the political process as it exists now can smoothly self correct toward a laissez faire environment. I suspect what Roberts and other optimists think they can accomplish via re-education is effectively increasing the percentage of potential losses that majorities are willing to spend to defend themselves from predatory minorities. A large part of this is just making many people in the non-special-interest-bloc aware that they stand to lose at all. However, I posit that its a natural law of political science within non-constitutionally constrained democracies (ie USA since at least 1860 if not earlier) that the legislative process is in effect a shadow market and special interests will always bring disproportionately higher bidding power to bear. They won’t always win if the stakes are too mismatched, but the tendency over time will always be to create more restrictions and spending excuses, rather than remove them. Thus in a weighted random walk, results inevitably in a fully restricted, hyper-inflated economy. Filed under: Uncategorized Comments: None
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Posted at 9:04 am on April 9, 2010, by Christine Harbin
Earlier this week, the Wall Street Journal published an article that explained how NBC Universal is using its television programming to send a subtle message to viewers to improve their lifestyle. From the article:
This illustrates how the private sector can address problems like global warming and encourage healthy behavior simply by setting a good example–not by legislating or by nudging via choice architecture. Since NBC’s effort encourages other companies to adopt and be affiliated with corporate social responsibility, I would not be surprised if this had a larger “behavioral” multiplier than the public sector’s efforts. [Cross-posted at Amateur Philosophy.] Filed under: Uncategorized Comments: 2 Comments
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Posted at 12:02 am on April 7, 2010, by John W. Payne
Cato Institute executive vice president David Boaz warns libertarians against the imagined limited government utopias of America’s early days that were actually far less libertarian than today in many important ways:
This is vitally important information to keep in mind. Sure, there was no Federal Reserve, income tax, or drug war in 1800, but the government still did plenty of unspeakably awful things back then. Of course, some people go too far in the other direction and claim that we have only gotten freer over the years. Although there might be a general trend towards liberty in the last four centuries or so, that trend has never been constant, and it is in no way a necessary fact about the world. I truly believe that we can make it to a society of maximum individual freedom, but we won’t get there by looking for it somewhere in the past. Certainly we can and should make use of the past to show the tragedies of state control and the successes of civil society and the market, but to the best of our knowledge, there has not yet been a completely free human society. A few have come close, and many more recently have allowed people to be freer than the vast majority of humanity that has ever lived, but freedom is an idea that still has yet to be tried in its totality. Cross-posted at Rough Ol’ Boy. Filed under: Uncategorized Comments: 3 Comments
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Posted at 10:16 pm on April 3, 2010, by Christine Harbin
In an op-ed published on Thursday, the editorial board at the Wall Street Journal criticizes Washington’s latest attempt to bail out homeowners. They argue that this intervention will be as ineffectual as the those that preceded it, and that homeowners would be better off if the government hadn’t intervened. From the editorial:
The practice of bailing out homeowners has several unintended negative consequences. The following are among the most egregious, in my opinion.
(1) Bailouts discourage employment. Just like any other type of unemployment benefit, payments to homeowners decrease an individual’s incentive to be employed. This contributes to a higher and longer-lasting unemployment rate.
(2) They penalize individuals who borrowed responsibly, and they encourage people to live outside of their means. Why put 20% down for a cramped ranch-style when you could buy a McMansion and have the taxpayers pay for it? (3) Many people bought houses that they couldn’t afford anyway, and they will foreclose on them in the future. For many people, a bailout is just delaying the inevitable. As described in a relatively recent article in the New York Times:
(4) They cause housing prices to be artificially high. Here is a Washington Post article on the subject. The latest proposal, like many of its predecessors, inflates home prices. Additionally, the $8000 homeowner tax credit allowed individuals to buy a more expensive house than they could otherwise afford. (5) There is a moral hazard problem. If a person knows that they are likely to be bailed out, then they are more likely to assume risk. I oppose bailing out people who bought houses that they couldn’t afford, and I disagree that the government should encourage homeownership. When a person invests her money, she assumes risk. Higher returns are supposed to be the payoff for accepting larger amounts of risk. Buying a house is just like any other investment outside of Treasury Bonds — there is a possibility that the individual will lose money. In some aspects, real estate is riskier than stocks because houses are not diversified (i.e., in the event of a natural disaster, a person’s entire investment is wiped out). A person should do thorough research before she makes what will be one of the largest financial decisions of her life. I recommend the article “5 myths about home sweet homeownership” by Joseph Gyourko, chairman of the real estate department at the University of Pennsylvania, in the Washington Post. It repudiates the commonly-held idea that homeownership is a investment that has good returns and no risks. To me, the following is the most eye-opening statistic in the article:
[Cross-posted at Amateur Philosophy.] Filed under: Government Spending, Market Efficiency, Uncategorized, Unintended Consequences Comments: None
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Posted at 11:19 pm on March 29, 2010, by Caitlin Hartsell
After reading the comments that appeared on Andrew Veen’s re-posting of Jen Pierce’s excellent post on a newcomer’s perspective of libertarian arguments, I wanted to address one of the major problems I’ve encountered when having political debate with libertarians and non-libertarians alike: false comparisons. This is especially a problem when talking about health care, which admittedly is a difficult topic. The argument people sometimes present is “perfect government” (in which the efficient government delivers services efficiently) versus “imperfect markets.” Other times, it’s “perfect markets” versus “imperfect government.” Neither is very useful, as what really needs to be looked at is the actuality of how markets and government play out. Any debate that happens needs to involve what can be realistically expected from both the market and the government. Market solutions, even in “perfect markets,” are relatively upfront about their negative points. A market solution, like one for health insurance, may not “include” everyone; a competitive market will bring the price down to a certain point so as to include more people (and sometimes, even most people) but there may be people who are still priced out and cannot afford the service, or insurance, or good. This is a flaw that is often used to attempt to discredit the solution. The problem is that the government solution has flaws that are not initially apparent. For instance, in places like Massachusetts, Canada, and Great Britain, everyone has health insurance and coverage, but that equates to long wait times and rationing of care and quality. A lack of competition (and an excess of bureaucracy) stifles innovation possibilities and slows any moves toward efficiency. Also, governmental solutions have the backing of the law behind them; if one is unhappy with the service, there are limited legal methods to bypass them. (Tangential note: Some may argue that rationing happens currently in the system we have, but rationing by price is a very different and more efficient mechanism than rationing by political clout. At any rate, the current system is too distorted by special interests and governmental infrastructure to be considered a market.) The case of the sick little girl that Jen mentioned draws upon another part of the argument oft overlooked by pro-government solution proponents: the role of private charities. In the competitive market solution, people have more money to spend on other goods, including private charity. Private charities must do good work in order to garner further donations; so in the long-term, the better charities will receive the most money and make the most impact. The market may leave some people out, but the private sector can pick up the loose ends. So, while the market solution admittedly does not “include” everyone, it is disingenuous to compare it to a governmental solution that does “include” everyone. Each has their own faults, but the market solution has mechanisms to fix them, whereas one must resort to the black market to get around the flaws in the governmental solution. (Also posted at Lady Libertarian) Filed under: Economic Theory, Government Spending, Health Care, Uncategorized Comments: 1 Comment
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Posted at 9:01 pm on March 29, 2010, by Audrey Spalding
According to a report from The Lottery Post, 18 states are considering expanding state gambling laws and institutions in order to make up revenue shortfalls. Right now, New Hampshire is considering a bill that would allow video slot machines and table games at six casinos. To use an over-used phrase, it looks like state lawmakers and local media outlets are “all in.” The Concord Monitor colored the state’s budget problems as unavoidable and unfixable. Even though some New Hampshire lawmakers have put forward propsed budget cuts, reporter Shira Shoenburg wrote, the cuts just aren’t enough to cover the state’s deficit. So really, the reasoning goes, the only hope is to increase state revenues somehow. Sen. Lou D’Allessandro, a major proponent of expanding casino operations in the state, offers up this rosy forecast: “If the gaming proposal is passed, there will be a significant influx of jobs and revenue. Some people have seen the light.” Let me be clear. I don’t have a problem with gambling per se. However, there are several reasons that make state legislators’ turn to gambling as a budget shortfall fix especially awful: 1. Cuts can be made. The choice presented, that New Hampshire can either make up its budget shortfall with new gaming tax revenues, or cut extremely important programs to the detriment of state residents, is a false one. I guarantee that New Hampshire still has some programs and dubious spending that the state could cut. New Hampshire could eliminate some state tax credits, thereby leveling the field for businesses. The state could also take a long, sober look at its budget, and reconsider how much it pays its highest-paid employees, the usefulness of certain regulatory boards, and whether some of its agencies really need to spend as much as they do on “professional development,” “awards,” and travel. 2. Legislators cannot have it both ways. I thought that the reason states imposed restrictions and regulations on gambling was because it was an unsavory activity, judged by many to be immoral, or was considered costly to the state. As reported in The Concord Monitor, New Hampshire Senate President Sylvia Larsen never supported expanding gambling — until her state needed the extra money. If Larsen truly believed in her publicly stated convictions, that gambling is in some way harmful, the recession should have changed none of that, and she has no excuse for supporting such unsavory activity. Along those lines, because states have welfare programs designed to bail out those who, say, gamble away their paychecks, I doubt that expanding gambling would, in fact, help states’ bottom lines. A 1999 report from the National Gambling Impact Study Commission estimated the nationwide cost of gambling, which includes things like welfare payments and unemployment benefits for gamblers who bet the farm, as about $5 billion per year. Either state-sanctioned gambling is morally bad for the state, or it is morally good; either gambling has a net positive economic impact or a net negative one — the verdict shouldn’t change based on the government’s budget. 3. This is not found money, it is a terrible wealth transfer. Just like everything else, gambling tax revenues are not found money. The money came from someone. In this instance, the person (cash cow) at least chose what to do with his or her money, and was taxed and charged accordingly. However, expanding casino operations is not akin to creating money or jobs. It is simply transferring them from a different, possibly less taxed, part of the state’s economy. Furthermore, when politicians do try to justify wealth transfers, they explain the process as necessary to help the needy. Under that rationale, we have programs such as welfare, and we have student-equalized state payments to public school districts instead of leaving each district to raise all of its revenues within district boundaries. I see expanding gaming, if it does in fact increase state revenues, as a transfer of wealth from the less well off to the middle class. As John W. Welte noted, people with more money tend to try gambling; ”…but higher socioeconomic status gamblers had lower rates of pathological gambling, and lower extent of gambling involvement, particularly for lottery.” 4. Who really thinks this will work? Interestingly, one major reason states are considering gaming expansions is that gaming revenues have fallen, likely due to the fact that people have less money to play around with. From 2008 to 2009, according to The Lottery Post’s report, gambling revenues fell an average of 5.6 percent. Some states, like Illinois, are facing declines greater than 14 percent. So, people have less money, and are prioritizing accordingly. Turns out, gambling is not a top priority for many. Why do states think that expanding gambling might change that fact? Again, from The Lottery Post: “People don’t have as much to spend,” said Freda Lofthus, 71, as she was playing slot machines at Prairie Meadows Racetrack and Casino near Des Moines. “I spend about half of what I used to.” 5. Why is the state involved in the first place? Lest I get too much gaffe from the libertarians for reasoning within the constraints of the current system, let me point out that the state really shouldn’t be involved in gambling in the first place. State-sponsored lotteries that claim to fund schools seem, to me, to be even more deceptive than a private casino claiming that I can strike it rich. The state stamp of approval adds a certain authoritative nod that this sort of activity is somehow safe, and a good idea. I submit that if the state were not involved in gaming regulation, then perhaps casino competition would increase, maybe even along the lines of increased return rates and a better overall experience — instead of casino owners working to curry favor with politicians. Filed under: Uncategorized Comments: 1 Comment
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Posted at 3:56 pm on March 26, 2010, by Jen Pierce
Eric suggested that, as a relative newcomer to libertarian philosophy, I have some recent insight into the process that the average person goes through when considering these ideas for the first time. I’m sure everyone’s introduction to libertarianism is different, but having now been on both sides of the debate, I wanted to share a couple of common themes I’ve noticed in people who are having their first conversations about free-market policy. The first is something I run into very consistently, which I’ve come to know as the “oh… you don’t eat babies after all” moment. The number one concern I hear from people with left-leaning viewpoints is that, under a capitalist system, the poorest and weakest among society will be overlooked. The homeless, the sick, the mentally challenged, and the poor in general will have no resources, no assistance, and no hope. The core of the libertarian response to this, as I understand it, is that if private charity is allowed to take the place of government programs, they will be run more efficiently and, even if the overall financial contribution is smaller (as compared to current government spending on public aid programs), more aid will be delivered to more people. I’m speaking in extremely general terms here, because there are infinite rabbit holes into which one could plunge at this point. I will, however, share one specific example of this line of thinking, from a recent conversation about health reform. A friend of mine with a four-year-old daughter is ecstatic about the new health care bill, because she previously had problems with doctors refusing her daughter treatment because they were afraid it wouldn’t be covered by insurance. She stated, “Anyone who is opposing health reform would change their mind if they’d seen my little girl suffering from double pneumonia last winter.” This is a great example of a fundamental misperception about economic conservatives. Lots of people assume that anyone who is arguing for less government intervention in business is just out to make as much money as possible. Which might be true, but they fail to understand the deeper premise – that we care just as much about that sick daughter, and because we understand that the market is the fastest way to get the most benefit to the most people, we campaign passionately to leave the market unhindered, to let it do its job. They don’t understand that profit represents a well-run business effectively providing goods and services. And, who can blame them? The average person hears stories about corporate corruption or abusive monopolies, chalks it up to greed, and decides that consumerism is evil, to be avoided at all costs. They don’t necessarily look deeper, to understand the role that lobbyists and government intervention play, or to realize that more freedom for business leads to more competition, which is always in their best interest. This is old hat to everyone reading this, which is all the more reason to occasionally remember that this is not the way most people see the world. The majority of people aren’t used to thinking in terms of mathematical systems. Emotion, sympathy, and a personal sense of what seems fair are decision-making tools that can pretty much get a person through his day, for pretty much his whole life. And, someone who is concerned that libertarian policy ignores the human equation can easily find reasons to be concerned. Respectable economists make serious arguments that real-world data should be completely ignored when deriving policy. Asking someone to embrace, or even to consider, this idea is demanding that they make some fundamental changes in their understanding of how the world works. Speaking from my own experience, I find that I’m a lot more inclined to trust a libertarian argument if a couple of things are true. First, I like to hear concessions up front. In the absence of government health care, will there be a section of people who are too high-risk to insure and will be dropped? I want to know about them. I’m still willing to consider that this might be superior to a government-run system. Too often, I find that libertarian crusaders try to gloss over uncomfortable points like this; the more energy I have to spend rooting out the worst-case-scenario, the less I trust or care about their argument. Secondly, and this is my primary point here – when talking to someone who is really new to this stuff, it’s essential to establish common ground. Everyone basically has the same goal here; provide as much as possible for as many people as possible. Create circumstances that allow for the best quality of life you can have. For libertarians, there’s the additional criterion of interfering with others’ definitions of “quality” as little as possible. But the point is, without spending a fair amount of time seriously considering these ideas, people may legitimately not understand that libertarians don’t burn down orphanages and eat babies in the name of profit. It’s worth taking some time to emphasize the seemingly obvious common goal, and then stressing that we are simply arguing for a better way to get there. Filed under: Uncategorized Comments: 6 Comments
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Posted at 11:20 pm on March 25, 2010, by Vroman
In Human Action and elsewhere, Ludwig von Mises asserts that GDP and other aggregate economic data are meaningless; furthermore that economics is categorically not an empirical science; no economic experiments are worthwhile, and no intertemporal comparisons between transactions can be validly made. Mises insists that the whole of economic theory can be derived logically from correct standard axioms, without relying on real world proof. Mises makes the analogy between Galileo rolling marbles down ramps with consistent results, and then converting this data into laws of motion; as compared to the very muddled, psychologically sensitive, reality of human behavior, whether concerning finances or any other matter. However, if I were a 17th century Natural Philosopher, I could take Galileo’s marble data and then come up with an answer for the speed of light, and be derided for using ‘meaningless’ numbers since I would surely be orders of magnitude off, and would be missing entire categories of subtleties like the reference frame paradox, etc. The point is that there is a definite speed of light, though the tools available at the time were grossly insufficient to precisely nail it down. Just so, I hold that it is possible to empirically prove economic theory, we simply are not able to cost-effectively achieve the necessary level of precision. Because economic theories can only be demonstrated by people practicing them, and if the theories are incorrect, those people will endure possibly extremely miserable conditions. And then you get a bloody coup de’tat and your whole experiment is ruined. Thus it is not feasible to run strictly controlled nation-wide econ experiments, though not necessarily impossible. On the other hand, I certainly am sympathetic to the Misesian conclusion that economic data should not be trusted currently. The problem with economics as a science is that it directly impacts the standard of living of those espousing competing theories. Select groups of people have much to gain or lose from which theory is put into practice, so have huge incentive to twist data, if that is the deciding framework. If we’re trying to determine the speed of light via marbles and the naked eye, and group X somehow stands to win a free ride in life, depending on the answer, they will come to a different conclusion than scientists genuinely interested in c for its own sake. So group X shows up to conferences with skilled lobbyists and a propaganda barrage to confuse the debate among laypeople, and insert tremendous amounts of unnecessary emotional morality play theatrics every step of the way. Thus in practice I am a firm supporter of Mises’s idea that economic theory should be provable by internal logic, and outside data isn’t necessary, but only because this is the best we can do at the moment. While I certainly appreciate the manipulability and questionable methodology of CPI and such, I disagree with Mises that such numbers are fundamentally unknowable. In the long run the transaction costs for data collection will diminish. For example, as online commerce becomes an increasingly large part of total economic activity, it will be cheaper and cheaper to number crunch the whole of human transactions, and eventually come up with “real” real GDP, et al. Filed under: Uncategorized Comments: 1 Comment
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"[T]he whole of economics can be reduced to a single lesson, and that lesson can be reduced to a single sentence. The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups."