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	<title>The Lesson Applied</title>
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		<title>Ponynomics: Economic Lessons from My Little Pony</title>
		<link>http://www.thelessonapplied.com/2013/01/19/ponynomics/</link>
		<comments>http://www.thelessonapplied.com/2013/01/19/ponynomics/#comments</comments>
		<pubDate>Sat, 19 Jan 2013 14:02:23 +0000</pubDate>
		<dc:creator>Josh Smith</dc:creator>
				<category><![CDATA[Uncategorized]]></category>

		<guid isPermaLink="false">http://www.thelessonapplied.com/?p=956</guid>
		<description><![CDATA[There are a number of important economic concepts illuminated by the excellent My Little Pony: Friendship is Magic episode &#8220;The Super Speedy Cider Squeezy 6000&#8243; (season 2, episode 15). I want to talk about them here, but warning, there are some pretty heavy spoilers within. First off, here&#8217;s an episode summary from wikipedia(NB, the Apples [...]]]></description>
			<content:encoded><![CDATA[<p>There are a number of important economic concepts illuminated by the excellent My Little Pony: Friendship is Magic episode &#8220;The Super Speedy Cider Squeezy 6000&#8243; (season 2, episode 15). I want to talk about them here, but warning, there are some pretty heavy spoilers within.</p>
<p><span id="more-956"></span></p>
<p>First off, here&#8217;s an episode summary from wikipedia(NB, the Apples are a family of ponies who live in Ponyville):</p>
<blockquote><p>Cider season has arrived but the Apples cannot make cider fast enough by traditional methods to satisfy everyone. The Flim Flam Brothers (Samuel Vincent and Scott McNeil) arrive with their &#8220;Super Speedy Cider Squeezy 6000&#8243;, claiming they can make as good a cider in a faster time. When the Apples refuse to accept a lopsided partnership, Flim and Flam instead challenge them to a cider making contest for rights to sell cider to Ponyville. The contest starts with the brothers in a strong lead, but Applejack&#8217;s friends offer their help to speed up production. With their lead quickly diminishing, Flim and Flam speed up their machine, disabling the quality control. They ultimately win the contest with the most barrels of cider but the cider is undrinkable and they quickly flee town. With all the cider made in the contest, the Apples celebrate with everyone else in town.</p>
<p>&nbsp;</p></blockquote>
<p><strong>My Analysis</strong></p>
<p>Before the Flim Flam Brothers arrive with their machine, we see that every day there is a long line of ponies waiting to buy cider, and each day when the cider made that day is gone, there is still a long line of unserved customers. These long lines mean a lot of idle, wasted time for ponies <a href="http://en.wikipedia.org/wiki/Opportunity_cost">who might rather be doing something else</a>. Time has value, and time spent wasted in a line is a non-monetary cost of buying Sweet Apple Orchard Cider, even for ponies who do get served. An economist observing a line of unserved customers would immediately suggest that the supplier should raise their price so that the market clears. (Even ponies who get cider wait in a long line. A solution to that might be to hire some ponies to run a second or even a third serving station.)</p>
<p>Remember, a &#8220;cleared market&#8221; is not one in which everyone gets what they want, but one in which everyone who is willing to pay the market price gets the amount they want at a price they are willing to pay. If the Apples keep their prices low, there is an incentive for someone else to enter the market and sell — at any price the pony customers will pay, above or below the Apples&#8217; price — to all the thirsty and under-served ponies.</p>
<p><strong>Making Cider</strong></p>
<p>Later in the episode we see that the process of making cider works thusly:</p>
<ol>
<li><a href="http://mlp.wikia.com/wiki/Applejack">Applejack</a> kicks a tree in <a href="http://mlp.wikia.com/wiki/Sweet_Apple_Acres">Sweet Apple Orchard</a>, and the apples fall off the tree.</li>
<li>Before they hit the ground, <a href="http://mlp.wikia.com/wiki/Apple_Bloom">Apple Bloom</a> scurries under with a basket and catches them.</li>
<li>When a basket is full, Apple Bloom takes the full basket to <a href="http://mlp.wikia.com/wiki/Granny_Smith">Granny Smith</a></li>
<li>Granny Smith sorts through the apples, discarding the ones she considers unfit for cider making, and sends the rest on down a chute, where they slide under a stone wheel, spinning under the power of . . .</li>
<li><a href="http://mlp.wikia.com/wiki/Big_McIntosh">Big McIntosh</a>, who trots on a treadmill next to the stone grinding-wheel.</li>
<li>Cider comes out of a spout at the base of the tub in which the grinding wheel sits. When a cask is full, Big McIntosh must cap it, and replace it with an empty cask.</li>
</ol>
<p>When the Flim Flam Brothers arrive, we see that they have a machine which does the following:</p>
<ol>
<li>Automatically retrieves apples from the trees via a large vacuum hose.</li>
<li>Sorts the apples for quality</li>
<li>Mashes the apples into cider</li>
<li>Outputs cider and seals the casks</li>
</ol>
<p>The only input involved in operating this machine — the titular Super Speedy Cider Squeezy 6000 — is some magic from the Flim Flams, who are unicorns (in the world of MLP:FIM, there are three types of ponies: unicorns, who have the power of magic; pegasi, who can fly and also control the weather; and earth ponies, who till the hard earth). It is certainly worth noting that not only is no direct labor involved in any of the steps of cider production for the machine, but it also saves steps, such as transporting from one stage to the next.</p>
<p><strong>Quality of Product</strong></p>
<p>Once the Apples&#8217; see the SSCS6K in action, they insist that the cider it produces must be of inferior quality to their more labor-intensive cider. Let us assume that the Apples&#8217; cider is in fact far superior to that put out by the machine. Assuming a sufficiently discerning customer base throughout Equestria, this means that the Apples can sell their cider for a higher price than the Flim Flams can. This is a good time to apply <a href="http://en.wikipedia.org/wiki/Alchian–Allen_effect">the Alchian-Allen Theorem</a>.</p>
<p>By what is almost certainly an enormous coincidence of an example product, AAT is often abbreviated as &#8220;ship the good apples out.&#8221; Here&#8217;s my summary of AAT: Assume you are a producer of a good that has differing levels of quality, like apples in an orchard. You quality grade some of your apples as High Quality and some as Low Quality. Further assume that you produce more apples than you can sell locally. Which apples should you ship out, the High Quality or the Low Quality? AAT postulates that, other things being equal, you should ship out the thing that sells for more money, as your shipping costs are the same either way, and this way you make the highest return on your shipping costs. (for more on this, I recommend the <a href="http://en.wikipedia.org/wiki/Alchian–Allen_effect">wikipedia article on it</a>.)</p>
<p>What I am getting at here is that the Apples&#8217; should ship their Sweet Apple Orchard Cider out to Canterlot, Cloudsdale, Appleloosa, Manehattan, etc., while the people of Ponyville drink the less expensive cider produced by the Super Speedy Cider Squeezy 6000. However, this proposal assumes that there are enough apples to meet both competing needs.</p>
<p><strong>There Isn&#8217;t Enough to Go Around</strong></p>
<p>On the one hand, the Apples make cider because that&#8217;s what the ponies in town want, but they&#8217;re not doing it for free. They make several dark and cryptic references to &#8220;losing the farm&#8221; if they somehow do not manage to sell all of their product. The incentive for them should be to make as much money as possible with their limited resources. If the people of Ponyville have sufficient demand, they can buy cider elsewhere (perhaps from the Flim Flam Brothers, as I suggested above, and provided the Flim Flams can get a supply of apples).</p>
<p>If the end goal is serving every pony in Ponyville, it&#8217;s clear that the scenario we have now is not optimal. There should be some middle ground in between the extremes of</p>
<ul>
<li><span style="line-height: 13px;" data-mce-mark="1">the Apples leave a huge line of thirst ponies at the end of every day and</span></li>
<li>the Flim Flam Brothers and drive the Apples into the poorhouse</li>
</ul>
<p>Perhaps a temporary lease at the beginning of the season to accumulate a store of cider for especially busy days when the artisanal cider supply runs dry, and hand-crafting for other times.</p>
<p>But these options are never on the table in the episode. Instead, Granny Smith foolishly puts her ancestral homestead and the livelihood of all those dear to her on the line <a href="http://en.wikipedia.org/wiki/John_Henry_(folklore)">against new-fangled machinery in a head-to-head, <em>speed-based</em> competition</a>. So they battle: and may the ponies who produce the most cider in an hour have exclusive rights to sell cider in Ponyville.</p>
<p><strong>The Faceoff</strong></p>
<p>Once they begin the competition, the Flim Flam brothers rest on a couch while their machine rapidly out-produces the Apples&#8217; fastest efforts. Applejack&#8217;s friends step in to help the Apples, and they begin to outpace the Flim Flams, so the Flim Flams turn off their quality control and begin outputting cider barrels that contain not only rotten apples, but leaves, sticks and liquified wood pulp from entire apple trees that get sucked into their input nozzle.</p>
<p>Once the time runs out on the competition, Flim and Flam have more barrels of cider stacked up than the Apples and are declared the winners with exclusive rights to sell cider to Ponyville. The Apples dejectedly declare that they must pack up and prepare to leave town.</p>
<p><strong>Gresham&#8217;s Law</strong></p>
<p>But of course, once any pony gets a taste of the Flim Flams most recently packaged brew, they spit the contents of their tankard right back in Flim and Flam&#8217;s faces. No pony wants to drink cider that is 80% wood pulp.</p>
<p>Should the brothers have even been declared the winner? Why was there not a quality floor set on what would constitute &#8220;cider&#8221; for purposes of the competition?</p>
<p>Here another economics concept rears its head: <a href="http://en.wikipedia.org/wiki/Gresham's_law">Gresham&#8217;s Law</a>. Gresham&#8217;s law as initially conceived applies to money. If the government issues coins with silver in them, and says that the coins are worth $1, and they have 80 cents worth of silver in them, everyone will use them as dollars in their day-to-day life, spending them when necessary. If there are other government issued coins that the government says are worth $1 which have $1.10 worth of silver, people will hold on to those coins and spend the others instead. Some people will even melt down those more valuable coins and sell the silver for it&#8217;s higher value (even though melting down coins or otherwise destroying government-issued money is often illegal). Gresham&#8217;s Law is often summarized as &#8220;bad money chases out good.&#8221; That is, the coinage which has the lower alternative value will be used as money, while coinage with a higher alternative value will leave the economy and sit idly or be destroyed for it&#8217;s alternative-valued use.</p>
<p>How do we get from there to &#8220;bad cider chases out good&#8221;? Well, the money aspect of Gresham&#8217;s Law can be analogized for other situations where something is asked for. Without what David Friedman calls &#8220;the discipline of constant dealings&#8221; — that is, the incentive to be nice, knowing that you will meet the person you are being nice to again and want them to be nice back —  the Flim Flams have no incentive to produce cider of any particular quality. Just as how the law calls for people to accept any legal tender for their debts, and so people use the lowest silver-content coins the can; similarly, when the bet calls for who produces the most &#8220;cider,&#8221; there is an incentive to produce the worst cider that can possibly be produced quickly.</p>
<p><strong>Quality Again</strong></p>
<p>What usually is, and should be, the arbiter of what is produced and sold on the market is customer demand. And we see in the episode that the Flim Flams can&#8217;t sell their lousy cider at any price. But this is a highly artificial outcome that has nothing to do with a real market. The owners of the two cider-producing firms made a bet that had nothing to do with actually pleasing their customers. They may as well have had a jet ski race to see who should sell cider (though it&#8217;s probably hard for a horse to operate the throttle).</p>
<p>If the Flim Flam brothers had not turned off their quality control, perhaps they would have produced something that ponies wanted to drink, even if not as fast as the Apples (with help from Applejack&#8217;s friends).</p>
<p><strong>Competition</strong></p>
<p>This episode is largely a bad example of market competition, in that the two firms chose to compete with something other than sales. Even typical market competition is not over who can produce the fastest, or who can sell the most, or anything as simple as that. All that matters to any individual firm is whether their revenue covers their costs, and that there is enough profit to encourage them to keep doing what they are doing rather than changing (to making something else or to producing in a different way, etc).</p>
<p>In then end, Apple Bloom observes that because of the race, the Apples have produced enough cider for everyone to get some (today). This illustrates that competition (even market competition) motivates producers to work harder than they otherwise might in order to satisfy their customers.</p>
<p><strong>Final Lesson</strong></p>
<p>Episodes of My Little Pony: Friendship Is Magic usually end with a character writing a letter to Princess Celestia to illustrate what they learned that week (usually a lesson about friendship). Despite the many opportunities for learning in this episode, Applejack writes in her letter that she learned nothing. This is also contrary to Princess Celestia&#8217;s request that she get a letter from whichever pony <em>learned something</em>.</p>
<blockquote><p>&#8220;From this day forth, I would like you all to report to me your findings on the magic of friendship, when, and only when, you happen to discover them. &#8221;<br />
— Princess Celestia (season 2, episode 3)</p></blockquote>
<p>I will conclude with one final lesson that I feel that Applejack could have learned about capital. Capital is a blessing and not something that should be dismissed or disregarded. The apparatus that Big McIntosh uses to smash the apples to cider is capital; if not for that, they&#8217;d be crushing apples into cider by hoof. The baskets that Applebloom use to carry the apples around are capital; if not for those, she couldn&#8217;t carry as many, and each load of apples would take lots more work to move. Even the method the Apples use to manufacture their cider is a form of capital; if someone had not taken the time in the past to develop that method, they&#8217;d be serving apples alone to their customers, instead of delicious Sweet Apple Orchard brand cider. It&#8217;s easy to take the things we have around us for granted, but many of those minor things that make our lives more pleasant or convenient are the result of someone who came before doing lots of extra work — after their normal day&#8217;s work was completed — in order to find ways to make life better in the future. Inventors and enterprising individuals have to invest labor up front for an uncertain future payoff, but when they come up with something that increases convenience for themselves and others, it pays labor-saving dividends for years to come.</p>
<p>The Super Speedy Cider Squeezy 6000 is one such example. Equestria is a better place because there is a machine that can do the work of four hard-working ponies at once, with no additional labor input. Embracing technological change means more free time to plant trees, make things, and even sit and drink cider while enjoying a beautiful day. Work can be it&#8217;s own reward, but that is no reason to squander our precious and limited time by swearing off conveniences. Machines that make things easier mean more time to figure out and do whatever is most important to us.</p>
<p>Even though Applejack did not learn this (or any other) lesson, we still can.</p>
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		<title>Krugman Gets The Broken Window Wrong</title>
		<link>http://www.thelessonapplied.com/2012/09/12/krugman-gets-the-broken-window-wrong/</link>
		<comments>http://www.thelessonapplied.com/2012/09/12/krugman-gets-the-broken-window-wrong/#comments</comments>
		<pubDate>Wed, 12 Sep 2012 06:03:22 +0000</pubDate>
		<dc:creator>Lee Sharpe</dc:creator>
				<category><![CDATA[Economic Theory]]></category>

		<guid isPermaLink="false">http://www.thelessonapplied.com/?p=943</guid>
		<description><![CDATA[Recently, Krugman wrote that if you think the iPhone 5 will boost the econonmy, then you believe in the Broken Window theory. The Broken Window Theory, more accurately described as the Broken Window Fallacy, is the belief that destruction can boost the economy, as people, companies, and governments spend to replace them. Krugman is a [...]]]></description>
			<content:encoded><![CDATA[<p>Recently, Krugman <a href="http://krugman.blogs.nytimes.com/2012/09/11/broken-windows-and-the-iphone-5/">wrote that if you think the iPhone 5 will boost the econonmy, then you believe in the Broken Window theory</a>. The Broken Window Theory, more accurately described as the Broken Window Fallacy, is the belief that destruction can boost the economy, as people, companies, and governments spend to replace them. Krugman is a big proponent of this plan, even going as far to argue that <a href="http://www.youtube.com/watch?v=jaED2ErdIv8">spending to prepare against a space alien threat would be good for the econonmy, even if it turned out to be false</a>.</p>
<p>But I&#8217;ll focus here on Krugman&#8217;s iPhone argument. He writes:</p>
<blockquote><p>The key point is that the optimism about the iPhone’s effects has nothing (or at any rate not much) to do with the presumed quality of the phone, and the ways in which it might make us happier or more productive. Instead, the immediate gains would come from the way the new phone would get people to junk their old phones and replace them.</p>
<p>In other words, if you believe that the iPhone really might give the economy a big boost, you have — whether you realize it or not — bought into a version of the “broken windows” theory, in which destroying some capital can actually be a good thing under depression conditions.</p></blockquote>
<p>If the iPhone 5 boosts the economy, and I believe it probably will, it&#8217;s because consumers feel it will create more value for them than the other uses they may have for their money. The &#8220;destruction&#8221; Krugman refers to people&#8217;s previous phones. But their other phones are not destroyed!</p>
<p>They could sell their old phone, give it to a family or friend, donate it to charity, or any number of other options. But they find purchasing a new phone to be worth it. If their previous phone was so truly bad that it doesn&#8217;t have other uses anymore and the best thing to do is throw it away, then by definition nothing of value has been lost, so even in this case there is no real destruction as meant by the Broken Window Fallacy, where the owner of property suffers an involuntarily loss.</p>
<p>But suppose there was an involuntary loss. Let&#8217;s say their old phone broke down and was out of warranty. In this case there certainly was destruction, and the person is buying the new phone to replace their old one. Maybe this is the case that Krugman means, although I would argue this is small minority of the iPhone 5 purchasers. But if these people wouldn&#8217;t have bought an iPhone 5 if their broken phone still worked, is that really a boost to the economy in the aggregate? Only if you look at what is seen (buying the iPhone 5 and creating employment in that industry). But we also need to look at what is unseen: Not buying the iPhone 5 would mean spending that money on something else, which creates employment in whatever industry the money would be spent on otherwise. So really when the person&#8217;s old phone breaks, the economy is down one phone, which makes it worse off, not better.</p>
<p>Krugman attacks the Broken Window fallacy, as he doesn&#8217;t believe it&#8217;s a fallacy at all. But the truth is that economic growth created by the iPhone 5 will be because it creates more value for consumers than it costs them to buy it, not because of any destruction that is happening. For a more thorough explanation of why the Broken Window Fallacy is a fallacy, I highly suggest watching this video:</p>
<p><iframe src="http://www.youtube.com/embed/QG4jhlPLVVs" frameborder="0" width="560" height="315"></iframe></p>
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		<title>Demand Is a Consequence of Production</title>
		<link>http://www.thelessonapplied.com/2012/08/14/demand-is-a-consequence-of-production/</link>
		<comments>http://www.thelessonapplied.com/2012/08/14/demand-is-a-consequence-of-production/#comments</comments>
		<pubDate>Tue, 14 Aug 2012 18:26:37 +0000</pubDate>
		<dc:creator>Brian McCall</dc:creator>
				<category><![CDATA[Economic Theory]]></category>

		<guid isPermaLink="false">http://www.thelessonapplied.com/?p=940</guid>
		<description><![CDATA[A question to you of a chicken and egg sort. If you have a group of people in a flat empty world with nothing in their possession, how do you get them to have things? Would you: A) Give everyone pieces of paper with faces on them, call it money, and tell them to wait [...]]]></description>
			<content:encoded><![CDATA[<p>A question to you of a chicken and egg sort.</p>
<p>If you have a group of people in a flat empty world with nothing in their possession, how do you get them to have things? Would you:</p>
<p>A) Give everyone pieces of paper with faces on them, call it money, and tell them to wait for someone to devise a way to accumulate those pieces of paper for himself, and hope that the means he devises results in people getting stuff?</p>
<p>B) Or would you give them tools, machines, and other various means to produce things they want? Would you give the knowledge and the means to make the tools?</p>
<p>The answer here should be obvious. Yet, I am always astounded to hear people say that the way to generate economic growth is to stimulate demand, or speak as if the money itself has some kind of intrinsic value. Demand is an artifact; it is a consequence of production, not its progenitor.</p>
<p>It wasn&#8217;t the vast network of highways that induced Henry Ford to start building cars. It wasn&#8217;t the airport runway that induced the Wright Brothers to put wings on a lawnmower. And it isn&#8217;t the existence of currency that induces people to make things. We make things because we want things. Money is merely the means by which we coordinate and communicate our individual desires and interests to others. If no one else is making anything, currency doesn&#8217;t communicate anything.</p>
<p>A currency is not a measure of the total demand. It is a measure of overall production. The dollar is the inch on this yardstick. I explained it this way the other day: If you have a length of rope, and you wish it were longer, you don&#8217;t make a longer rope by making more notches in your yardstick, and call the new divisions &#8220;inches&#8221;. You still have the same length of rope, just smaller units of measure. Your inches are shorter, and it is a deception to say that just because now it takes more &#8220;inches&#8221; to measure the same length of rope, that you have a longer rope.</p>
<p>So consider this when someone claims that the economy isn&#8217;t growing because no one has money, or that companies are hording it all. Well, that makes just about as much sense as saying you have a shorter rope because you&#8217;ve erased some notches and now your &#8220;inches&#8221; are longer.</p>
<p>Of course, there is a general kind of demand that the production takes advantage of, but this is a generic phenomenon that doesn&#8217;t change or modulate in intensity. A demand for the needs and comforts of life are not specific, and are always present. But the means by which they are satisfied are specific and can take an infinite variety of forms.</p>
<p>So it is not merely enough that humans will always want and demand ways to conserve their energy and save labor. That is a given. Nor can that kind of demand be stimulated by giving out pieces of paper.</p>
<p>Nor will handing out pieces of paper get you from point A, that generic, formless and inchoate sort of demand to something as specific as an internal combustion engine — the internal combustion engine being only one way that general demand can be satisfied. To perhaps borrow from Keynes&#8217; interpretation of Say&#8217;s Law, the production of internal combustion engines creates a demand for internal combustion engines.</p>
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		<title>First, Do No Harm</title>
		<link>http://www.thelessonapplied.com/2012/08/03/first-do-no-harm/</link>
		<comments>http://www.thelessonapplied.com/2012/08/03/first-do-no-harm/#comments</comments>
		<pubDate>Sat, 04 Aug 2012 05:30:53 +0000</pubDate>
		<dc:creator>Justin M. Stoddard</dc:creator>
				<category><![CDATA[Culture]]></category>
		<category><![CDATA[Foreign Policy]]></category>
		<category><![CDATA[Public Choice]]></category>

		<guid isPermaLink="false">http://www.thelessonapplied.com/?p=929</guid>
		<description><![CDATA[Just as the Kony 2012 phenomenon swept through the Internet earlier this year, so now does the current Chick-fil-A kerfuffle. Don’t worry, this post isn’t about Chick-fil-A specifically, but instead about some things I’ve learned and observed over the past few weeks as I followed (and often commented upon) the controversy. The comments Dan Cathy [...]]]></description>
			<content:encoded><![CDATA[<p>Just as the Kony 2012 phenomenon swept through the Internet earlier this year, so now does the current Chick-fil-A kerfuffle.</p>
<p>Don’t worry, this post isn’t about Chick-fil-A specifically, but instead about some things I’ve learned and observed over the past few weeks as I followed (and often commented upon) the controversy.</p>
<p>The comments Dan Cathy made about same sex marriage didn’t greatly disturb me apart from the notion that they were completely wrong-headed and just blatantly silly.  After all, the president of the United States pretty much expressed the exact same opinions up until recently when we learned that his views had “evolved.”  One can be cynical about that, as he is up for re-election and the timing of that “evolution” was, how do I put it, convenient.  But, one can also be charitable about it.  We tend to admire a person who is willing to change their mind on an issue.</p>
<p>Still, the comments in and of themselves were enough to dissuade me from doing business there.  Truth be told, this was not anything near a huge sacrifice for me as I’ve only been a patron there less than ten times in my entire life.</p>
<p>When it came out that Chick-fil-A had given millions of dollars to groups who actively advocate for and use the power of government as a means to deny basic individual rights, it brought up the level of ire I had towards the company.  If Chick-fil-A were to go out of business tomorrow, that would be just fine with me.</p>
<p>But, things rapidly got out of hand, as the issue became more inflamed.  A call for a general boycott turned into calls for government action against Chick-fil-A.  Various mayors and city council members vowed that they would not allow any new franchises within their cities.  State-funded universities began campaigns to ban the stores from their campuses.</p>
<p>I must give credit where credit is due, as many liberal minded people opposed these actions.  But there were (and are) plenty of people who support these measures.</p>
<p>This, of course, set off a counter-protest where people flocked to Chick-fil-A to show their support.  I like to think of myself as a rather incredulous person, so I’m not overly impressed with many of the claims that this was a counter-protest in support of “free speech.”  I’m sure there were people involved for whom that was their primary motivation, in that they were protesting an obvious overreach and stated threats from clueless and bumbling government officials.</p>
<p>No, this was a counter-protest that wrapped itself in the moniker of “traditional family values,” which the people involved believed were under attack.</p>
<p>The obvious point that needs to be made here is, one is not very credible if they say they are protecting “free speech” with one breath while advocating against another basic human right.</p>
<p>Thus, during and after the counter-protest, those who opposed Chick-fil-A began to ratchet up the issue.  I received two private messages from friends on Facebook informing me that they noticed that I had “liked” Chick-fil-A’s page.  They were sure, they said, that this was done in the past, but they wanted to point it out to me so I could correct that error.</p>
<p>Now things were getting downright creepy.  It was then that several things occurred to me.</p>
<p>I witnessed very few people (on either side) being intellectually consistent about this issue.  I decided to test this theory out by asking (on various threads and in person) this question, as can be seen in <a href="http://www.thelessonapplied.com/2012/08/01/i-have-a-very-simple-question/">this blog post</a>:</p>
<blockquote><p>“Chick-fil-A gives money to groups that advocate against individual rights.  That’s bad.  It’s why I won’t be doing business there anymore.  You seem to be showing a great deal of outrage over this, so allow me to reframe the problem on a larger scale.</p>
<p>The president of the United States actively assassinates people in other countries.  He reserves the right to assassinate American citizens by way of secret committee.  He reserves the right to keep any of that information from you.  He maintains a prison on an island where no average American is allowed to go, where he oversees a program of torture and secrecy.  He actively rejects the “will of the people” by violently shutting down marijuana dispensaries in states that have democratically elected to allow them.  He has deported more people from the United States than any president in U.S. history, and he still does not actively campaign for same-sex marriage.</p>
<p>In my estimation, the president of the United States has done inestimably more damage to humanity than Chick-fil-A could ever hope to accomplish.</p>
<p>Will you be withdrawing your support for him this coming election?”</p>
</blockquote>
<p>Only one person said yes to that question, and he made that decision long ago.  The responses ranged from (and I’m paraphrasing, here):</p>
<ul>
<li>Romney would kill more people.</li>
<li>Not voting would only add to the problem.</li>
<li>The president wouldn’t do those things if it wasn’t for the Republicans.</li>
<li>It’s not a fair analogy.</li>
<li>You have to work within the system if you want to change it.</li>
</ul>
<p>It seems to me that these are very unsatisfying answers.  My reply to these assertions would be:</p>
<ul>
<li>Should I eat at Chick-fil-A because another restaurant would be more homophobic?</li>
<li>Would boycotting Chick-fil-A only add to the problem?</li>
<li>I find it hard to believe that a president who gives himself the authority to assassinate Americans couldn’t also find the authority not to assassinate Americans.</li>
<li>It’s an apt analogy in that you’re holding a restaurant up to a higher moral standard than the president you vote for.</li>
<li>If that’s the case, you should be spending your money at Chick-fil-A in hopes that they will change their stance.</li>
</ul>
<p>Those are specific examples.  The overall gist of the counter-arguments was that Romney will do all those things but also fight against same sex marriage, abortion rights, women’s rights, and financial regulation.</p>
<p>The counterpoint here is obvious.</p>
<p>The price that some people are willing to pay for same-sex marriage, abortion rights, women’s rights, and financial regulation is assassination, torture, deportation, murder, and misery elsewhere.</p>
<p>I rephrased the question:</p>
<blockquote><p>“If the president of the United States were successfully able to completely change the policies in Russia so that same-sex marriage were legal, women’s rights were enshrined, abortion rights were protected, and there was complete universal health care coverage and drastic financial regulation, but actively targeted Americans with drone attacks, tortured them without due process, and randomly inserted heavily armed soldiers into metropolitan areas, would you still vote for him?</p>
<p>If not, why?”</p>
</blockquote>
<p>I’ve received no answer to that question.</p>
<p>The inherent contradiction between the answers to those two question (though they are the same in every way, except for the people affected by the policies) is this.</p>
<p>People delude themselves in thinking that the first choice is at best virtuous, and at worst necessary, and recognize that the second choice is murderous.</p>
<p>But, in fact, both choices are murderous.</p>
<p>The last question I ask is, what’s the threshold?  What act would the president have to do that would be so vile, so evil that you would not only withdraw your support for him, but actively oppose him?</p>
<p>If targeted, secret assassinations of American citizens by way of secret committee and operating a secret prison where people are tortured without due process on an island where no average American can ever visit isn’t enough for you to oppose him, where are you willing to draw the line?</p>
<p>I’m not overly optimistic about the answers I would receive to that question for this reason: Groupthink, identity politics, and the idea of “collective rights” makes us do incredibly stupid and evil things.</p>
<p>There are many people still alive who not only actively apologize for, but support the tens of millions of deaths that occurred under the Stalin and Mao dictatorships.  There are many more who still claim that dropping two atomic bombs on Japan was “the right thing to do.”</p>
<p>Today, there are people who explicitly support assassinations, murder, and torture for ideological reasons.  There are also many who <i>implicitly</i> support it because of their ideology.</p>
<p>Meaning, the concept of gay rights or women&#8217;s’ rights or class rights are more important to them than individual rights, namely the right not to be murdered or tortured.  They are choosing the group they identify with over the individual.  So long as the president perceived as working for these group rights, individuals elsewhere pay the price.</p>
<p>They are just as bad as the people counter-protesting in the name of “free speech” while advocating for the rights of Christian values.  As long as Christian values are being upheld, the individual does not matter.</p>
<p>Groupthink clouds judgement.  Mob mentality destroys it.  The group infused with overwrought emotion and righteous indignation discourages dissent or reason.</p>
<p>I’ve known people in my life who have said bigoted things.  Some of those people I love dearly. I know, to the deepest depths of my soul, that most of them are not bad, bigoted people. They have expressed mistaken views, which can change.  If I didn’t believe that, I would not associate with them.</p>
<p>If I am intellectually honest, I must admit that others have the same qualities.</p>
<p>Acknowledging these simple things decouples you from what the group thinks and forces you to relate to individuals qua individuals.  When you’re facing an individual rather than ideological groupthink, it tends to tamp down the anger a bit.</p>
<p>Which brings me to my conclusion.</p>
<p>The concept of rights based on identity politics is a ridiculous notion.  I don’t believe in gay rights or women’s rights, or rights for the poor, rights for the rich, for the handicapped, men’s rights, transgender rights, American rights, terrorist’s rights, or for any other group rights.</p>
<p>There are only individual rights.</p>
<p>I fight for same-sex marriage not because I have many friends who are gay and have a personal stake in the matter.  I fight for same-sex marriage because it’s a fundamental right, left up to only the individuals involved.  I fight for the free movement of people across borders not because I identify as an immigrant, but because it is a fundamental individual right to go where you please, so long as you’re not hurting anyone.  I fight for the rights of children not being murdered in Afghanistan, not because it gives me an ideological advantage over someone else, but because it is a fundamental human right not to be murdered from the sky.</p>
<p>I cannot and will not make a choice between them.  I’m not willing to shrug my shoulders at one issue to gain an ideological victory on another issue.</p>
<p>People tend to get very indignant when I tell them I do not vote in national elections.  Whatever reason I give them, it only makes them more angry. I’ve been told that I’m apathetic (clearly not true), that I have no right to complain (ironically ironic), that I am contributing nothing (obviously false) or that I should be ashamed (I’m not).</p>
<p>Countering these points almost always leads to more conflict.</p>
<p>That’s understandable.  When it comes down to it, it’s a religious debate, and people tend to get very uncomfortable and defensive when their beliefs are challenged.</p>
<p>But the real reason I don’t vote is simple.  I’m an individual.  I try to face the world on those terms.  I try to identify with everyone (regardless of gender, race, or country of origin) on those terms.</p>
<p>Voting is a mob action.  Voting makes people view the world through a collective lens.  It’s always an issue of “us” against “them.”  When it’s “us” against “them,” the end result is always someone else suffering so you can get what you want.</p>
<p>Nobody should suffer because of my preferences.  Nobody need die for abortion rights or the right to get married to whomever you please.</p>
<p>That’s why I am completely disengaged from the political process.</p>
<p>I don’t ever want to be put in the position where I hold the restaurant I eat at to a higher moral standard than the president I vote for.</p>
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		<title>Nobody Believes What They Say They Believe</title>
		<link>http://www.thelessonapplied.com/2012/08/01/nobody-believes-what-they-say-they-believe/</link>
		<comments>http://www.thelessonapplied.com/2012/08/01/nobody-believes-what-they-say-they-believe/#comments</comments>
		<pubDate>Thu, 02 Aug 2012 03:20:53 +0000</pubDate>
		<dc:creator>Justin M. Stoddard</dc:creator>
				<category><![CDATA[Culture]]></category>
		<category><![CDATA[Public Choice]]></category>

		<guid isPermaLink="false">http://www.thelessonapplied.com/?p=919</guid>
		<description><![CDATA[According to a recent Gallup Poll, 46% of Americans believe in creationism over evolution. That is, they believe that the earth was formed roughly 10,000 years ago and was first inhabited by Adam and Eve. Another 32% of Americans believe that evolution was/is theistically guided; meaning that life took millions of years to evolve, but [...]]]></description>
			<content:encoded><![CDATA[<p>According to a recent <a href="http://www.huffingtonpost.com/2012/06/05/americans-believe-in-creationism_n_1571127.html">Gallup Poll</a>, 46% of Americans believe in creationism over evolution.  That is, they believe that the earth was formed roughly 10,000 years ago and was first inhabited by Adam and Eve.  Another 32% of Americans believe that evolution was/is theistically guided; meaning that life took millions of years to evolve, but God guided the process.  This fits in line with the intelligent design argument.</p>
<p>These numbers are often referred to with great shock and concern from the scientific community. Many on the left of the political spectrum are also very anxious about the implications. Evolution, after all, is a scientific fact. It&#8217;s been proven to a degree of certainty which leaves no serious scientist in doubt. We know via empirical evidence that the earth is billions of years old. We have a rough, but fairly good, understanding of how life was created. We understand the evolutionary process. Nearly every field of science confirms at some level that evolution is a hard fact.</p>
<p>When people get together and insist that creationism or intelligent design be given time in the classroom, there is always a loud and ferocious cry of protest. In recent history, nearly every single proposal to do so has been soundly defeated. Intelligent design took such a beating in the first decade of this century that it&#8217;s not seriously considered by much of anyone, anymore. Creationists have taken their education outreach to the confines of the <a href="http://creationmuseum.org/">Creation Museum</a> in Petersburg, Kentucky.</p>
<p>Atheists, in particular, make a much concerted effort to pile onto creationists. They are derided, made fun of, insulted, mocked, slandered, and generally reviled at conferences, in various fora, etc.  One need only make a brief visit to any serious atheist or left-leaning website to see what I&#8217;m talking about.</p>
<p>Now, it may be that creationists often overreach and deserve some of the criticism. There is, after all, the pretty well defined Exclusionary Clause of the First Amendment. Regardless of what people believe or don&#8217;t believe, people generally don&#8217;t want other people to push their beliefs on them or their children.</p>
<p>Being a creationist may also signal other intentions to people. You may be against stem cell research, or gay marriage, for example. People make assumptions. Some assumptions are right, and some are wrong. It all just depends.</p>
<p>Regardless, those who don’t believe, or don’t believe as strongly seem to view those who do as extremely irrational, if not just plain stupid. I suspect there is more than just a bit of class warfare going on, here, but the basic point remains. For the most part, nonbelievers loathe the irrationality of those who do believe.</p>
<p>I think atheists and those on the left often overstate their case for alarm on the issue. There is good evidence to suggest that even though 46% of people say they are creationists, a good portion of them don&#8217;t actually believe it. Here&#8217;s where it gets tricky. They may believe they believe it, but their actions often belie those beliefs. Many creationists are taking a literal interpretation of the Bible, after all, but clearly nobody actually literally follows the tenets of the Bible. You don&#8217;t see people taking and killing slaves, or murdering their children, or adhering to the abstinence of shellfish or woven cloth because the Bible dictates it.</p>
<p>If people actually literally believed in the tenets of the Bible or the Koran, then there would be an incredible amount of bloodshed, violence, and anguish in this world. Also, there would never be any such thing as &#8220;interfaith&#8221; dialogues. If your way is the only way to heaven, what&#8217;s the point in understanding other beliefs?</p>
<p>People like Sam Harris are extremely alarmed that the former head of the Genome Mapping Project and current head of the NIH is a person who has a &#8220;close personal relationship&#8221; with God. It seems to me, however, that Francis Collins is a brilliant doctor and scientist regardless of his personal religious beliefs.  In other words, his belief in God has nothing to do with how he conducts his job, regardless of what Sam Harris thinks.</p>
<p>I perceive religion in America as something that&#8217;s been tamed. As Bryan Caplan says in The Myth of the Rational Voter:</p>
<blockquote><p>Given the separation of church and state, modern religion has a muted effect on nonbelievers. Scientific progress continues with or without religious approval.</p>
</blockquote>
<p>There&#8217;s more to that quote, which I&#8217;ll reveal in a bit.</p>
<p>There was a time when I would have seen these poll results as extremely troubling, but not really anymore, given the reasons I&#8217;ve explained above. The problem isn&#8217;t usually with religion, but in how government sometimes favors religion over the individual.</p>
<p>Here are the <a href="http://cityroom.blogs.nytimes.com/2012/05/14/new-york-voters-support-minimum-wage-hike-poll-says/">results of another recent poll</a> taken in New York State. Regardless of political allegiances, nearly 70% of voters from every region polled favored raising the minimum wage from $7.25 per hour to $8.50 per hour. Certainly more Democrats than Republicans agreed with the proposal, but even 58% of Republicans were in favor.</p>
<p>Just as with creationism (as pointed out above), the case against minimum wage laws has been definitively made. They don’t work. It has been empirically proven that minimum wage laws <b>increases</b> both unemployment and poverty. They adversely affect African Americans and teenagers the most. They quite literally shut people out of the workplace.</p>
<p>It can be argued that creationism is wrong and irrational, but in today’s modern society, you’d have a harder time proving that it was overly harmful. Contrast that with minimum wage laws, which are clearly very harmful.</p>
<p>My question is, why does one belief get so roundly derided by the public at large (even when the majority of the public believes in God), when the other belief gets pretty much a free pass?</p>
<p>In fact, it’s more than a free pass. People who believe in minimum wage laws are afforded an elevated social status. Don’t believe me? Go to work tomorrow and say the following: “Minimum wage laws hurt the poor, cause more poverty, and create unemployment.” What do you think the reaction will be? You’d be perfectly correct in saying it. Facts would be on your side. You could cite countless empirical studies and refer to most any economist (left or right) on the subject, and they would back you up.</p>
<p>Creationism is banned from the classroom, but incredibly harmful economic beliefs aren’t.  Why?</p>
<p>I suspect it’s a bit of psychological projection. Voters may think they are being rational about a subject, but they most likely aren’t.  As the rest of Bryan Caplan’s quote goes:</p>
<blockquote><p>“Thus, it is in <i>mind set</i>, not practical influence, that voters resemble religious believers. Given the separation of church and state, modern religion has a muted effect on nonbelievers. Scientific progress continues with or without religious approval. Political/economic misconceptions, in contrast, have dramatic effects on everyone who lives under the policies they inspire&#8211;even those who see these misconceptions for what they are. If most voters think protectionism is a good idea, protectionist policies thrive; if most believe that unregulated labor markets work badly, labor markets will be heavily regulated.”</p>
</blockquote>
<p>And if voters think that minimum wage laws are good idea, then minimum wage laws will be implemented, regardless of whether they actually work.</p>
<p>This is because voters have no incentive to be self interested in the voting booth. Votes are free, and a person’s chance of swaying an election one way or the other may be anywhere from one in millions to astronomical.  This means that a person can vote socially and enjoy the social benefit of doing so.</p>
<p>If voters were really as self-interested as everyone insists, they would be spending much more time determining the truth of the matters they are voting on.  For example, if a single vote cost a person $10,000 and only affected him and his loved ones, he’d probably get it right.  Since votes are free, effect everyone equally, and have little to no chance of making a difference, you are free to skip self interest and vote socially instead.  Minimum wage is popular, so that’s the way you go.  Being against gay marriage is popular, so that’s the way you go.</p>
<p>As with creationism, it’s my opinion that even though people say they are enthusiastically in favor of minimum wage laws, they don’t actually believe what they say they believe. If minimum wage laws really did help the poor, helped alleviate poverty, and were inclusive for all minorities, they would be advocating for even higher wages. Why not more than $100 per hour?</p>
<p>Currently, we have very smart people like Sam Harris, Richard Dawkins, and Neil deGrasse Tyson advocating for <a href=”http://www.samharris.org/blog/item/how-rich-is-too-rich/”>income redistribution</a>, the idea that robotics will eventually cause mass unemployment and poverty, <a href=”http://www.forbes.com/sites/chrisbarth/2012/03/13/neil-degrasse-tyson-invest-in-nasa-invest-in-u-s-economy/”>a call for mass “investment” into NASA</a>, and governmental health care reform.</p>
<p>These ideas go from pretty silly to economically horrible. Sam Harris shows little understanding or depth in his arguments. Neil deGrasse Tyson makes horrible errors in logic, and Richard Dawkins just gives us feel-good rhetoric without understanding the economic ramifications of what he’s espousing.</p>
<p>Compared to these ideas, creationism is the very least of my worries.</p>
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		<title>I Have a Very Simple Question</title>
		<link>http://www.thelessonapplied.com/2012/08/01/i-have-a-very-simple-question/</link>
		<comments>http://www.thelessonapplied.com/2012/08/01/i-have-a-very-simple-question/#comments</comments>
		<pubDate>Wed, 01 Aug 2012 23:28:27 +0000</pubDate>
		<dc:creator>Justin M. Stoddard</dc:creator>
				<category><![CDATA[Foreign Policy]]></category>
		<category><![CDATA[Freedom of Expression]]></category>
		<category><![CDATA[Immigration]]></category>
		<category><![CDATA[Politics]]></category>

		<guid isPermaLink="false">http://www.thelessonapplied.com/?p=915</guid>
		<description><![CDATA[Conor Gaughan makes a very good and salient point about Chick-Fil-A and the current controversy surrounding the company. When gays get so angry about a chicken sandwich, it is because Chick-fil-A has given around $5 million to fight to discriminate against us. When we praise brave Eagle Scouts who give up their badges in protest of the [...]]]></description>
			<content:encoded><![CDATA[<p><a href="http://www.huffingtonpost.com/conor-gaughan/chick-fil-a-homophobia_b_1711566.html">Conor Gaughan</a> makes a very good and salient point about Chick-Fil-A and the current controversy surrounding the company.</p>
<p>
<blockquote>When gays get so angry about a chicken sandwich, it is because Chick-fil-A has given around <a href="http://www.businessinsider.com/heres-how-much-money-chick-fil-a-gives-to-anti-gay-groups-2012-7" target="_hplink">$5 million</a> to fight to discriminate against us. When we praise brave Eagle Scouts who give up their badges in protest of the Boy Scouts of America&#8217;s prejudice, it&#8217;s not about scoring political points; it&#8217;s because there are kids in dens who are being taught to believe that they are less than equal. When we rant about the pastor who preaches that gays should be thrown into a concentration camp, we scream out of fear. And our fears are justified &#8212; in the last seven days, a lesbian in Nebraska was <a href="http://www.nydailynews.com/news/national/gay-nebraska-woman-tied-mutilated-hate-crime-assault-police-article-1.1120649" target="_hplink">carved</a> with a knife, a gay man in Oklahoma was <a href="http://www.rawstory.com/rs/2012/07/25/hate-crime-suspected-after-gay-man-burned-by-firebombing-in-oklahoma/" target="_hplink">firebombed</a>, and a girl in Kentucky was <a href="http://www.huffingtonpost.com/2012/07/19/kentucky-victim-17-attack_n_1686852.html" target="_hplink">kicked and beaten</a> &#8211; her jaw broken and her teeth knocked out &#8212; while her assailants allegedly hurled anti-gay slurs at her.</p>
<p>I am your coworker, your frat brother, your cousin, your neighbor. And I am watching as you defend institutionalized discrimination.</p></blockquote>
<p>And right he is. This is precisely why I don&#8217;t give any money to Chick-Fil-A.  It&#8217;s precisely why I gave up on the Boy Scouts and sent them back my Eagle Scout award over 15 years ago. I don&#8217;t like associating with bigots. I would rather not give them my time, or my money. To me, bigotry (whether it targets homosexuals, asians, African Americans, or any other group) is the most base form of collectivism.</p>
<p>Let me now write my own paragraph.</p>
<p>When people get so angry about the president, it&#8217;s because the office has given <a href="http://en.wikipedia.org/wiki/Foreign_aid_to_Pakistan">billions of dollars</a> to prop up countries that actively <b>kill</b> homosexuals and other groups not in line with the regime.  It&#8217;s because the president has admitted that it is pretty much he alone (along with a select, *secret* committee) that targets people for assassination by drone attack in various countries around the world.  Thousands have been murdered thus, the majority of them innocent bystanders or children.  To get around this, the president unilaterally pronounced that anyone near a drone strike was from now on labeled a viable military target.</p>
<p>We get angry because the United States has the highest prison population per capita in the world.  The majority of which are non violent offenders. These people languish behind bars when a simple brush stroke from the president would at least set in motion the process of freeing them.  So far, no word comes from the president.  In fact, he has ordered the DEA to step up raids of marijuana dispensaries in states which democratically voted to allow them.</p>
<p>We get angry because this president has deported more people from the United States than any president in history.  We get angry because GITMO is still open, and in fact is receiving a multi million dollar upgrade, despite his promise that the very, very first thing he would do would be to close it.</p>
<p>I emphatically make this point, and a dare anyone to refute it.  The actions of the President of the United States over the past 3 1/2 years have had monumentally more ruinous effects on society than Chick-Fil-A could ever dream of achieving.
<p>Chick-Fil-A actively gives money to people who spout hate?  The president actively murders people half way around the world.</p>
<p>Now, let me ask a question. To all the people out there righteously angry at Chick-Fil-A. To all who are calling for a boycott (which I support), or encouraging municipalities and college campuses to ban them (which I do not support), or just generally chiding anyone they meet who dares eat at Chick-Fil-A (for whatever reason)&#8230;let me ask you&#8230;</p>
<p>Who will you be voting for this election?</p>
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		<title>It Doesn&#8217;t Mean What You Think It Means</title>
		<link>http://www.thelessonapplied.com/2012/01/28/it-doesnt-mean-what-you-think-it-means/</link>
		<comments>http://www.thelessonapplied.com/2012/01/28/it-doesnt-mean-what-you-think-it-means/#comments</comments>
		<pubDate>Sat, 28 Jan 2012 06:38:43 +0000</pubDate>
		<dc:creator>Brian McCall</dc:creator>
				<category><![CDATA[Internet]]></category>
		<category><![CDATA[Philosophy]]></category>
		<category><![CDATA[Politics]]></category>

		<guid isPermaLink="false">http://www.thelessonapplied.com/?p=911</guid>
		<description><![CDATA[In the It Doesn&#8217;t Mean What You Think It Means category, I&#8217;m having to add the terribly abused No True Scotsman fallacy. I&#8217;m starting to see this unfortunate abuse with ever increasing frequency. Here is a short version of it [I know this isn't the full version, but for the sake of brevity...]: Person A: [...]]]></description>
			<content:encoded><![CDATA[<p>In the It Doesn&#8217;t Mean What You Think It Means category, I&#8217;m having to add the terribly abused No True Scotsman fallacy. I&#8217;m starting to see this unfortunate abuse with ever increasing frequency.</p>
<p>Here is a short version of it [I know this isn't the full version, but for the sake of brevity...]:</p>
<p>Person A: No Scotsman dislikes haggis.<br />
Person B: My uncle is Scottish and he doesn&#8217;t like haggis.<br />
Person A: No <em>true</em> Scotsman dislikes haggis.</p>
<p>Now consider this:</p>
<p>Person A: All fruit is edible<br />
Person B: Plastic fruit isn&#8217;t edible.<br />
Person A: All <em>real</em> fruit is edible. [or substitute <em>true</em> if you prefer]</p>
<p>What is the difference between the two? </p>
<p>In the first, a sweeping generalization is confronted with a counterexample. The response is to change the definition of the term. At first, a Scotsman is merely a native inhabitant of Scotland. Then when confronted with the counterexample, the term Scotsman mutates to become bound up definitionally with the practice of eating haggis, such that the very meaning of Scotsman is &#8220;one who eats haggis and is a native inhabitant of Scotland,&#8221; and only became so for the purpose of excluding that specific case.</p>
<p>What about the second? Why does it not suffer the same deficiency? Aren&#8217;t we changing the definition of fruit just to exclude fake fruit?</p>
<p>No, because edibility is intrinsic to the definition of the term fruit. (I am of course only speaking of the common literal use of the term. Not metaphorical uses like &#8220;the fruits of one&#8217;s exertions,&#8221; or scientific terms like fruiting body.) That&#8217;s why it must there be preceded by the qualifier &#8220;fake.&#8221; Eating haggis is not an intrinsic characteristic of the term &#8220;Scotsman.&#8221; When Person A says that all real fruit is edible, it is not the same as saying all fruit is red. To be fruit is to be edible.</p>
<p>I&#8217;ve noticed this tendency lately. Someone will make a strawman characterization of an opposing political view. Another will respond, asserting a correct or more complete definition. The first will then claim the second is committing the No True Scotsman fallacy.</p>
<p>Some clown with a website says, &#8220;libertarianism is always bound up in the continuation of systems of oppression such as racism, misogyny, christianism, nativism, and the like.&#8221; It is such an absurd caricature that anyone with even a modest acquaintance with its principles can see that those are not necessary and intrinsic characteristics of the philosophy. Not only that, but they are incompatible.</p>
<p>Someone responded by providing a list of libertarian writers who forcefully oppose those, and he is accused of committing the No True Scotsman fallacy, as if he is engaging in some ad hoc refinement of the scope of the term to include ONLY those writers.</p>
<p>If anything, it appears the converse is taking place. Instead of No True Scotsman, it is All True Scotsmen.</p>
<p>Person A: All libertarians are crazy fruitcakes who believe horrible things I find morally repugnat.<br />
Person B: These libertarians don&#8217;t believe those things.<br />
Person A: Well, all True libertarians do, even if they don&#8217;t know it.</p>
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		<title>To Protect and Subvert</title>
		<link>http://www.thelessonapplied.com/2012/01/24/to-protect-and-subvert/</link>
		<comments>http://www.thelessonapplied.com/2012/01/24/to-protect-and-subvert/#comments</comments>
		<pubDate>Tue, 24 Jan 2012 06:42:27 +0000</pubDate>
		<dc:creator>Eric D. Dixon</dc:creator>
				<category><![CDATA[Corporatism]]></category>
		<category><![CDATA[Drug Policy]]></category>
		<category><![CDATA[Food Policy]]></category>
		<category><![CDATA[Nanny State]]></category>
		<category><![CDATA[Public Choice]]></category>
		<category><![CDATA[Regulation]]></category>

		<guid isPermaLink="false">http://www.thelessonapplied.com/?p=904</guid>
		<description><![CDATA[Public choice article of the day, from The Atlantic: Roughly 70 percent of all antibiotics used in the United States are given to healthy farm animals to foster rapid growth and make up for unhygienic living conditions. Many bacteria that live on animals adapt and transfer to humans, spreading superbugs that are often resistant to [...]]]></description>
			<content:encoded><![CDATA[<p><a href="http://www.econlib.org/library/Enc/PublicChoice.html">Public choice</a> article of the day, <a href="http://www.theatlantic.com/health/archive/2012/01/the-failure-of-the-fda-why-were-still-using-antibiotics-on-livestock/251442/">from <em>The Atlantic</em></a>:</p>
<blockquote><p>Roughly 70 percent of all antibiotics used in the United States are given to healthy farm animals to foster rapid growth and make up for unhygienic living conditions. Many bacteria that live on animals adapt and transfer to humans, spreading superbugs that are often resistant to treatment.</p>
<p>For more than 35 years, the FDA has recognized that giving antibiotics to farm animals poses a risk to human health, yet the agency has done almost nothing to stop it. Indeed, it has mastered the art of making inaction look like action. Last May, NRDC and our partners sued the FDA to prompt it to take action. Instead, the agency retrenched.</p>
<p>It started by claiming the livestock industry could police itself. In our lawsuit, we asked the FDA to finally rule on two citizen petitions &#8212; one filed 12 years ago, the other six years ago &#8212; urging the agency to stop the use of antibiotics in healthy animals. In November, the FDA announced that although it shares concerns that the use of antibiotics to make animals grow faster is dangerous for humans, it would deny the petition because it was pursuing an alternative strategy.</p>
<p>This &#8220;alternative strategy&#8221; turns out to be just another name for the status quo. Instead of banning the use of antibiotics in healthy animals, the FDA is allowing the livestock industry to follow a voluntary approach. But we already know voluntary doesn&#8217;t work. The FDA has been operating under that model since 1977, yet the practice has expanded exponentially over the years. Talk about the fox guarding the hen house.</p>
<p>In December, the FDA tried to further justify its inaction by erasing the historic record. Back in 1977, the agency proposed to withdraw approval for the use of several antibiotics in animal feed based on findings published in two notices posted in the Federal Register. The notices containing the findings have been listed in the Federal Register for more than three decades. But just before Christmas a few weeks ago, the FDA pulled the notices. Soon after it buried its 35-year-old proposal, the agency tried to have it both ways. On January 5, it proposed banning off-label uses of a class of antibiotics known as cephalosporins on healthy livestock.</p></blockquote>
<p>To be clear, although I&#8217;d like to avoid the consumption of antibiotic-treated livestock as much as possible, I don&#8217;t think the FDA should ban it — a clear overreach of government power.</p>
<p><img src="http://www.thelessonapplied.com/wp-content/uploads/fda_logo.jpg" alt="FDA" title="FDA" width="200" height="86" align="right" />The lesson here, though, is that when a government agency is tasked with protecting the public interest, <a href="http://www.pretenseofknowledge.com/2011/12/05/corporatism-is-your-fault/">public-sector incentives make it a near certainty that the agency will eventually instead collude with special interests in working against the public interest</a>. Instead of serving the one function that is clearly useful for industry oversight — education and advice to consumers who can then make a more informed choice — <a href="http://www.thefreemanonline.org/featured/economists-against-the-fda/">the FDA has become a legal arbiter of illusory safety</a>.</p>
<p>If the FDA allows a product or practice, the public at large regards it as safe. If the FDA disallows something, society assumes danger. But instituting a top-down decision-making process to centralize the level of risk that consumers should be allowed to take leads to a system that serves nobody well. <a href="http://www.cato.org/pubs/regulation/regv27n2/v27n2-9.pdf">Life-saving drugs are barred</a> from being used by people who are more than willing to accept their potential hazards. <a href="http://www.cato.org/pub_display.php?pub_id=9408">The sale of healthy food is criminalized</a> because of <a href="http://www.bostonglobe.com/news/nation/2011/12/16/battle-boils-over-sales-raw-milk/OJi80Nz63oGp7NhrPeHA1J/story.html">the mere possibility that it could make somebody sick</a>, despite the fact that <a href="http://www.realmilk.com/documents/SheehanPowerPointResponse.pdf">people can and do get sick from the FDA-approved alternative</a>. And, <a href="http://www.theatlantic.com/health/archive/2012/01/the-failure-of-the-fda-why-were-still-using-antibiotics-on-livestock/251442/">as shown in The Atlantic</a>, because people trust that D.C. paternalists are looking out for them, they carelessly consume anything that the FDA has let slip through its otherwise iron grip.</p>
<p>A bureaucratic overlord is incapable of choosing the correct balance between risk and reward even for the people in his neighborhood, let alone for more than 300 million strangers scattered throughout the country. There is, however, an alternative, as <a href="http://www.thefreemanonline.org/featured/abolishing-the-fda/">Larry Van Heerden noted in <em>The Freemam</em></a>:</p>
<blockquote><p>The first step to correct these problems is to abolish the FDA, stripping the government of the power to approve drugs (and medical devices) for the market or to remove them from the market. Any rule-making for disclosure and lawsuits for fraud should be devolved to the states.</p>
<p>Even if the FDA were omniscient, objective, and impervious to outside influence, it would be wrong to give it the power to withhold drugs from the market. The proper function of government is to protect individual rights and guard against fraud, not to restrict freedom of choice to protect people from their own ignorance. In fact, the FDA has shown itself to be imperious, subject to prevailing political winds, and indifferent to the thousands of deaths and injuries it has caused.</p>
<p>[...] Forcing all consumers to live by rules that cater to the least responsible individuals imposes huge costs on everyone else and ultimately fails to protect even the willfully ignorant.</p></blockquote>
<p>[Cross-posted at <a href="http://www.shrubbloggers.com/2012/01/24/to-protect-and-subvert/">Shrubbloggers</a>.]</p>
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		<title>The Method of Sachs</title>
		<link>http://www.thelessonapplied.com/2012/01/20/the-method-of-sachs/</link>
		<comments>http://www.thelessonapplied.com/2012/01/20/the-method-of-sachs/#comments</comments>
		<pubDate>Fri, 20 Jan 2012 07:43:57 +0000</pubDate>
		<dc:creator>Wirkman Virkkala</dc:creator>
				<category><![CDATA[Philosophy]]></category>
		<category><![CDATA[critique]]></category>
		<category><![CDATA[Henry Sidgwick]]></category>
		<category><![CDATA[Jeffrey Sachs]]></category>
		<category><![CDATA[libertarianism]]></category>

		<guid isPermaLink="false">http://www.thelessonapplied.com/?p=895</guid>
		<description><![CDATA[There exist trenchant criticisms of the libertarian idea. Henry Sidgwick, in his The Methods of Ethics (seven editions, 1874-1907), provided a concise set of challenges to the doctrine as he understood it. Each of his points is well worth addressing. And yet when today’s major thinkers muster up their inner dialectician to rail against the [...]]]></description>
			<content:encoded><![CDATA[<p>There exist trenchant criticisms of the libertarian idea. Henry Sidgwick, in his <em>The Methods of Ethics </em>(seven editions, 1874-1907), provided a concise <a href="http://www.laits.utexas.edu/poltheory/sidgwick/me/me.b03.c05.s04.html">set of challenges</a> to the doctrine as he understood it. Each of his points is well worth addressing. And yet when today’s major thinkers muster up their inner dialectician to rail against the freedom philosophy, they usually fall flat, get caught up in inessentials and absurdities.</p>
<p>Take Jeffrey Sachs. In “<a href="http://www.huffingtonpost.com/jeffrey-sachs/libertarian-illusions_b_1207878.html">Libertarian Illusions</a>” he attempts to unveil and discredit the ism behind the Ron Paul phenomenon. It’s a pretty lame attempt. Here’s his basic characterization of his target:</p>
<blockquote><p>Libertarianism is the single-minded defense of liberty. Many young people flock to libertarianism out of the thrill of defending such a valiant cause. They also like the moral freedom that libertarianism seems to offer: it’s okay to follow one’s one desires, even to embrace selfishness and self-interest, as long as it doesn’t directly harm someone else.</p>
<p>Yet the error of libertarianism lies not in championing liberty, but in championing liberty to the exclusion of all other values. Libertarians hold that individual liberty should never be sacrificed in the pursuit of other values or causes. Compassion, justice, civic responsibility, honesty, decency, humility, respect, and even survival of the poor, weak, and vulnerable — all are to take a back seat.</p></blockquote>
<p>A well-educated liberal-leaning friend of mine gave the exact same rap years ago. He also referred to “liberty as a value,” so I’ve long pondered that odd phrasing. I think of liberty as a <em>condition</em> dependent on <em>relationships </em>(with other people). I don’t primarily think of it as “a value.”</p>
<p>I <em>value</em> liberty, yes, and will agree with Sachs that it is not my <em>only</em> value; I have many others. Nearly all freedom-lovers do. They have lives. Personal lives, communal lives, careers, hobbies, interests . . .</p>
<p>Yet, I do value liberty highest<em> in the political and legal context</em>. <span id="more-895"></span></p>
<p>This distinction is important. In which domain of life and thought is liberty relevant? What does it compete with — that is, what do some folk place higher, or “alongside,” liberty?</p>
<p>Sachs provides a list. An odd list. Among his enumerated values are compassion, honesty, decency, etc., — and I rate these human characteristics highly, too. I promote them in various ways, every day, in my personal life, within the community I inhabit. But when it comes to making policy for the instrumentality of coercion within my community and nation — which Barack Obama recognizes as the distinct realm of political governance — I take caution. Compassion for people in groups A and B isn’t going to elicit from me policies that would be unjust to individuals X, Y and Z, or folks in groups C and D, no matter how my heart “bleeds” for them, to use a common cliché.</p>
<p>Which brings us immediately to: <em>Justice</em>. Sachs is no Sidgwick. The great 19th century utilitarian philosopher understood how individualist liberals (i.e., libertarians) regarded liberty (freedom):</p>
<blockquote><p>It has been held that Freedom from interference is really the whole of what human beings, originally and apart from contracts, can be strictly said to owe to each other: at any rate, that the protection of this Freedom (including the enforcement of Free Contract) is the sole proper aim of Law, <em>i.e.</em> of those rules of mutual behaviour which are maintained by penalties inflicted under the authority of Government. All natural Rights, on this view, may be summed up in the Right to Freedom; so that the complete and universal establishment of this Right would be the complete realisation of Justice,&#8212;the Equality at which Justice is thought to aim being interpreted as Equality of Freedom.</p></blockquote>
<p>Sidgwick then went on to argue that this idea doesn’t quite work, in his lights, though he saw its attraction. But note: He didn’t pretend that justice “is a value” separate from liberty. He understood that, for libertarians, <em>justice is liberty systematized</em> — or, at the very least, law is only just when systematically organized around the idea of basic, equal rights to freedom.</p>
<p>To say that libertarians shove justice to the back seat is either witless error or sly dishonesty. Sachs being no dummy, I suspect the latter.</p>
<p>Of course, rhetoric in political debate rarely ascends to honest dialectic. It’s mostly filled with cheap, dishonest verbal barrages. And no doubt Sachs thinks that, since the libertarian view of justice doesn’t work for him, he may characterize libertarian views of justice as, in effect, “non-justice.”</p>
<p>Odd, in someone who valorizes honesty in his list of things over to which liberty must, at least sometimes, give up the driver’s seat.</p>
<p>The reason to talk about liberty “as a value” is that, when we speak of values, we order them: This is more important than that; the other less vital than yet another. And it’s pretty obvious Jeffrey Sachs wants liberty to slide over, even take a back seat, to a number of other issues and interests. So you can see why speaking of liberty “as a value” is so strategically important to him, and to other modern “liberals”: they want to shunt aside considerations of freedom much of the time.</p>
<p>Often, like Barack Obama, they’ll talk about particular liberties running up to an election — checks on governments’ ability to put you in prison or kill you outright, based on mere suspicion — but it’s no surprise that such folk abandon liberties-talk when they get into power. Guantanamo was an enormity to Obama before election; a necessary part of the war on terror, after.</p>
<p>This experience with politicians, which every libertarian has had, is probably one of the largest influences on why we valorize liberty so highly. Politicians are in the business of compromising about the practice of coercion. Justice, in its fundamentals, is not about compromise. Politics <em>is</em>. So libertarians cast a suspicious eye on political processes, and certainly do not regard the outcomes of such processes as anything like “justice.”</p>
<p>More importantly, the liberty element in justice comes down to a core idea that Sachs does not ever mention. He never cracks the nut of the libertarian idea: <em>Liberty limits coercion</em>, the use of force — we are free only to the extent that we are not being robbed, beaten, bullied, or otherwise victimized by some agent (individual or group of same, under cover of some hallowed idea or symbol, or not). Libertarianism is basically the doctrine that no one has the right to <em>initiate</em> force; only defensive and retaliatory force can be justified.</p>
<p>Indeed, crimes are <em>defined</em> by the use of initiated force, or (by extrapolation) fraudulent machinations to extract one’s time or property by deception in contract. To say that liberty must be “balanced” by “other values” is to say that those other values trump one’s right not to be bullied, pummeled, entrapped, coerced, etc. Sachs does not bother even mentioning how his “other values” could possibly warrant the strong arm of initiated force: How does <em>honesty</em> trump liberty? Argue, please, how <em>respect</em> justifies threatening with force those whom you allegedly respect for not complying with your schemes.</p>
<p>Sachs’s list of “values” appears hastily constructed indeed.</p>
<p>Honesty, for example, is the origin of much libertarian analysis. Libertarians regard most of the common rationales <em>for</em> force as dishonest, inconsistent, and overlaid with flowery garlands of rhetoric.</p>
<p>And, in matters where people make contracts, honesty becomes a prime concern. It’s on the grounds of honesty that fraud — a concept derived from initiated force and the notion of rightful property — makes sense. So to say that libertarians place liberty above honesty seems, as P.H. Nowell-Smith neatly phrased such talk, <em>logically odd.</em></p>
<p>Listing “respect” as something libertarians shunt aside, or back down the value scale, proves equally absurd. Most who advocate liberty for all (rather than merely take liberty for oneself) do so out of respect for others. Indeed, in the standard rhetoric of rights, “recognizing” a right is the same thing as “respecting” a person’s rights. Respect is what it’s all about, at core.</p>
<p>The idea of respecting individuals as individuals, and not merely for their utility in some governmental scheme, or because they fall into this group or that (race, religion, ethnicity, income category), has been central to libertarian thought for a very long time. It was there in Kant, and there, as well, in anti-Kantians like Herbert Spencer and Ayn Rand.</p>
<p>But don’t consult Sachs to learn out about libertarian thinkers. His short treatment of Rand is a travesty: “Ethical libertarians, exemplified by the late novelist Ayn Rand, hold that liberty is the only true virtue. Rand claimed when a rich man responds to a poor person’s plea for help (even by giving mere pennies), the rich man actually debases himself. This view is the opposite of Christian charity and Buddhist compassion, according to which moral worth is achieved by helping others.”</p>
<p>Of course, Rand doesn’t consider liberty a virtue at all. Her virtue is rational self-interest, a “new concept of egoism.” And though I reject Rand’s ill-conceived “virtue of selfishness,” and have argued against it as one of the gravest errors any libertarian thinker has made, I’ll say this: I don’t remember her arguing that benevolence and charity and generosity were “debasements” of the rich man. I’d like to see the reference. Did Sachs cull this notion from some early, Nietzschean work, such as the repulsive spectacle, <em>Night of January 16th</em>?</p>
<p>In times past, the Sachses of this world would have targeted Herbert Spencer as the callous anti-compassionate individualist. And those folks were wrong, too, for Spencer, though dubbed a “Social Darwinist,” was the 19th century’s chief theorist of empathy (following Adam Smith, he made do with a nuanced meaning of the traditional term, “sympathy”). Spencer grounded liberty on altruism as well as egoism, expounding at length on the importance of beneficence to the good society, the free society (see the final two books of his Principles of Ethics).</p>
<p>Spencer is relevant to this discussion because he so clearly limned the structure of morality, specifying that justice requires non-aggression (Sidwick’s “non-interference”) and that benevolence must be placed as something <em>beyond</em> justice, a supplement. Rights to freedom were more fundamental than compassionate giving, yes; but Spencer provided reasons for this prioritization: liberty defends and encourages the voluntary co-operation that actually advances civilization and a true sense of general well-being; beneficence has much more limited social utility.</p>
<p>Trade is a form of voluntary co-operation, and its benefits are mutual: both parties to any exchange aim to gain. Compassionate giving is not mutual, on the face of it. It’s one person giving to another, with the gift coming off the tally of wealth or energy of the giver and accruing to the recipient. It does not increase the powers and wealth of both parties, which is why Spencer treated it carefully, urging caution. It is also why libertarians are very skeptical about those who push “compassion” above freedom, who conflate justice with love.</p>
<p>It is compassionate to give to the poor, or the less well-off in whatever realm of life (to assist the slow in learning, to help the sick to heal, to comfort the dying). And in point of observable fact, compassion is as important for most libertarians as it is for most human beings. And it can be both compassionate and generous to give to organizations designed to provide aid to the victims of chance or fate or even their own perversity.</p>
<p>But it is neither generous nor compassionate to force A, B, and C to help D, E, and F. One cannot be generous with other people’s money: that’s the worst form of prodigality. One cannot be compassionate in taking from some to give to others. Such a practice makes mockery of the very word “compassion” — one only has to listen to the political clamor for student loan forgiveness, or against any critique of Medicare, Medicaid and Social Security, to witness both cupidity and effrontery in near pure form.</p>
<p>Strangely (and indicatively), the technical difficulties of giving to others are rarely addressed by the alleged advocates of compassion. Instead of dealing with them, Sachs provides a stark thought experiment comparison, imagining rich folk on the one hand, and starving folk on the other — and in that context many folks unhesitatingly follow his line of thought. But that’s rarely the context of actual need . . . though one could argue that, today, the only cases where taking from the rich and giving to the poor really make much sense would be in massive expropriation from middle-class and wealthy westerners, giving that wealth to the deeply impoverished in Africa and Asia.</p>
<p>And yet such a vast international transfer rarely sees the light of day. But if liberty must be abandoned for compassion in the face of true needy, that policy would surely be primary. I guess in Sachs’s trinity of “liberty, compassion, and civic responsibility, these three,” the greatest of these is . . . nationalism.</p>
<p>But when one forgets borderlines, and struggles to consider helping the truly needy, the problems become more obvious. <em>What do we give to whom? How much? Are there negative effects to giving?</em></p>
<p>These problems expand exponentially when forcing some to help others and making such actions an ongoing program. Recipients aren’t simply meek receptacles of others’ largesse. People respond to the incentives of the permanent gift environment. They change their behavior to get more. If the benefactor gives to mothers without husbands, some women will indeed engage in riskier sexual behavior that leads to more offspring. If benefactors pay for (or write off) hospital bills to the uninsured, some people will choose not to insure for illness and injury. If it becomes expected that benefactors will pay for all retirements, then fewer people will adequately save for their retirements.</p>
<p>These incentives influence folks on several levels, and is not a matter, always, of conscious life planning. It’s often about levels of risk in the face of the diminishing bad consequences of risky behavior. If the risks of “bad behavior” are made less, we are likely to get more of that bad behavior.</p>
<p>But it gets worse . . . when unilateral giving is coupled with vast takings, not only does the recipient list for all that “compassion” tends to grow, but class divisions increase as more expect to live at the expense of others, and greater &#8220;contributions&#8221; are required from those others to support the dependent classes. Parasitism emerges as a dominant social mechanism.</p>
<p>After decades of such programs, people now wonder why the number of “poor people” increases. Why, after billions spent on a “War on Poverty” is there still poverty?</p>
<p>It’s because it pays to be poor.</p>
<p>This is well demonstrated in both economics and sociology, though rarely talked about. Honesty would require the advocates of compassion to discuss this often, but those who speak of a “compassionate politics” rarely hazard such concerns. And they deride those who do. Without compassion.</p>
<p>Nearly every person I know who has adopted the freedom philosophy while coming from other commitments has thought about this at some level. Not all read the vast literature on these subjects — and very few dare read the dread Herbert Spencer! Many simply reflect on the general experience with socialism and the welfare state as preparation for adopting the libertarian idea.</p>
<p>And personal history often helps. Anyone who’s given their labors in a modern society a second thought recognizes the play of incentives on what they themselves do. The longer unemployment benefits are extended, the longer one is likely to remain unemployed. Statistics bear this out, but introspection often suffices. Though libertarians may rank among the hardest working of Americans, we all feel the tug of leisure, and it’s easy to lose one’s grip on the work ethic — the tough work required to seek and maintain employment, whether as a wage earner or professional contractor or entrepreneur.</p>
<p>I focus on compassion longer than his other trumps because it obviously means so much to Sachs. Libertarians realize something that Sachs does not address: That compassion and giving have severe limitations, and — when coupled with governmental exploitation and political demands — too easily becomes the acme of compassionate giving’s opposite: greed. There may be no group greedier than a public employee union pushing for the expansion of their benefits and the bureaucracies that allegedly help “others.”</p>
<p>True progress happens when people face up to the ultimate truth about voluntary co-operation: You must please others to get ahead. Some others. Some <em>paying</em> others.</p>
<p>The great tragedy of the poor is that they have little to offer anyone else. So they are left with gifts or plunder as a way of life. The horror of this is not well recognized, because, like death, the truth is so unpleasant. Though poverty is a frequent subject of literature, no tale has done for poverty what Leo Tolstoy did for mortality in “The Death of Ivan Ilyich.” The degree of universal evasion of the truth of this condition eclipses my ability to measure.</p>
<p>That this message isn’t a main and explicit lesson provided by “public education” is a good sign that education isn’t very educational.</p>
<p>Jeffrey Sachs would undoubtedly point to education as a vitally important “public good” tinged with a dollop of redistributive “compassion” that advocates of “civic responsibility” must advance. And yet this industry is one of the prime examples of massive and thorough government failure. Government-provided (tax-funded, government-run) schooling has engendered a whole education culture mostly devoid of practical use. We live and think in the context of near-universal miseducation.</p>
<p>Most libertarians have thought themselves out of at least some of the traps that establishment educators have set for them. And if they place the idea of resistance to force above all else, it is not in a vacuum, fed only by folks like Ron Paul and Ayn Rand and others.</p>
<p>We who are libertarians have dealt with these ideas on a personal level as well as theoretical ones discussed by economists and philosophers. Vague hand-waving about “civic responsibility” cannot trump our preference for a society respecting individuals and based on a humane division of responsibility that does not evade the actions and actual potential of human beings.</p>
<p>Indeed, when libertarians speak out, protest, devise legislation and repeals, and even go so far as to engage in the ugly work of politicking, they are engaged in “civic responsibility”; pretending that libertarians do so for narrowly selfish reasons is absurd. When Sachs says that the “vast majority of Americans today embrace liberty, civic responsibility, and compassion, and seek a government built upon all three,” libertarians don’t necessarily disagree. The difference? Libertarians judge massive expropriation as not only undermining of justice but also as corrupting the actual culture of voluntary giving.</p>
<p>It is not compassionate to denigrate individual liberty and personal responsibility. It is not compassionate or responsible to advance the war of all against all in the form of the modern redistributive state.</p>
<p>And it is not compassion to wear “giving” on one’s sleeve. That’s a pharisaic something else.</p>
<p>Compassion can only flourish where liberty is the rule.</p>
<p>Generosity and sympathy, when set loose in the environment of the modern state, are corrupted by dangerous greed and the vile temptations of plunder. Sachs’s brief dismissal of libertarianism ignores the modern state’s grave hazards — and carefully elides any mention of substantive libertarian critique of that state. (He engages, instead, in a typical canard: Praising Europe at America’s expense. This tactic quickly loses any grip on reality as Europe descends into poverty and strife.) Sadly, Sachs’s work in general rests upon acceptance of vast patterns of coercion and theft. It is understandable how a person so highly placed in the intellectual wing of the modern state would find the general order a great and grand thing. It is a system that valorizes his own very dear self.</p>
<p>But enormities, too, are big, impressive, over-powering.</p>
<p>Against such powers and principalities, libertarians insist that such influences need not over-power our reason and judgment.</p>
<p>And against lame attacks on the libertarian idea? Actual, informed arguments against libertarian ideas would be of more use. For, it may be that only by overcoming the problems (real or perceived) in libertarianism will we ever achieve a free society.</p>
<p>Final thought: <em>Sachs’s main gambit, the “play of many values,” was precisely the issue that decisively turned me to libertarianism.</em> Value subjectivity and value diversity present grave problems for moral philosophy and political practice. They do not require the kind of robust state that Sachs seems to think they do.</p>
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		<title>The Reign of Fonzie Economics</title>
		<link>http://www.thelessonapplied.com/2011/12/10/reign-of-fonzie-economics/</link>
		<comments>http://www.thelessonapplied.com/2011/12/10/reign-of-fonzie-economics/#comments</comments>
		<pubDate>Sat, 10 Dec 2011 06:10:52 +0000</pubDate>
		<dc:creator>Eric D. Dixon</dc:creator>
				<category><![CDATA[Economic Theory]]></category>
		<category><![CDATA[Efficiency]]></category>
		<category><![CDATA[Government Spending]]></category>
		<category><![CDATA[Market Efficiency]]></category>
		<category><![CDATA[Regulation]]></category>
		<category><![CDATA[Spontaneous Order]]></category>
		<category><![CDATA[Unintended Consequences]]></category>

		<guid isPermaLink="false">http://www.thelessonapplied.com/?p=871</guid>
		<description><![CDATA[When I was a kid, I loved watching &#8220;Happy Days,&#8221; even at its shark jumpiest. A big part of the appeal was the adolescent power fantasy of Arthur Fonzarelli, a disco-era caricature of a 1950s motorcycle hoodlum-with-a-heart-of-gold. As the series progressed, Fonzie developed an almost mystical aura, becoming somebody who could make almost anything happen [...]]]></description>
			<content:encoded><![CDATA[<p><img src="http://www.thelessonapplied.com/wp-content/uploads/fonz_jukebox.jpg" style="border: 1px solid black; margin: 0 1em 1em 0; float: left;" alt="The Fonz fixes a jukebox" alt="The Fonz fixes a jukebox" />When I was a kid, I loved watching <a href="http://en.wikipedia.org/wiki/Happy_Days">&#8220;Happy Days,&#8221;</a> even at its <a href="http://www.youtube.com/watch?v=MDthMGtZKa4">shark jumpiest</a>. A big part of the appeal was the adolescent power fantasy of Arthur Fonzarelli, a disco-era caricature of a 1950s motorcycle hoodlum-with-a-heart-of-gold. As the series progressed, Fonzie developed an almost mystical aura, becoming somebody who could make almost anything happen through the sheer power of his cool.</p>
<p>The Fonz could knock down doors with a slap of his hand, summon any girl with a snap, and most often on the show displayed his classic power of fixing the jukebox by banging on it. It&#8217;s a seductive fantasy that one might be able to fix a complex piece of machinery through an application of blunt force, without having to worry about the intricate mechanisms that actually allow the machine to work.</p>
<p>Unfortunately, this is the mentality that has reigned for decades in applied public policy.</p>
<p>Is the economy broken? <a href="http://www.cato.org/pubs/tbb/tbb_0209-53.pdf">Bang on it.</a> That&#8217;ll get it chugging along again. Wait, that didn&#8217;t work? You didn&#8217;t bang it hard enough. Or maybe your leather jacket needs to be a little cooler next time. At any rate, it&#8217;s your fault. If you&#8217;d only smacked the economy the way that Fonzie showed you, it totally would have worked.</p>
<p>Economic prescriptions thereby stem from <a href="http://www.cato-unbound.org/2011/12/09/donald-j-boudreaux/keynes-friedman-and-higgs/">a non-falsifiable tenet of faith</a> in a grown-up power fantasy.</p>
<p>This kind of magical thinking convinces many because it is accompanied by a veneer of rigorous thought. There are even equations! Surely, equations are scientific! But as <a href="http://cafehayek.com/2009/02/is-ycinxg-meaningful.html">economist Don Boudreaux pointed out at Cafe Hayek</a>:</p>
<blockquote><p>The ability to write letters on a board in the form of an equation, to give those letters names that seem to correspond to some imaginable economic things, and to assemble quantitative data on those things, is not necessarily good science.</p></blockquote>
<p>Keynesian macroeconomic variables lump heterogeneous goods and services into undifferentiated masses, no longer to be understood as the complex workings of a dynamic system of social cooperation. But just because you can gather a bunch of statistics and aggregate them into a variable doesn&#8217;t mean that the variable has a meaningful application to the real economy.</p>
<p>If you want to fix a jukebox in real life, a mechanic might be able to get the job done by tinkering with the machinery until each piece once again functions correctly. It&#8217;s easy for people who have a facility with physical forms of engineering to take a similar view of the economy, thinking that if only the right people were in charge, they could tweak policy here and there to ensure successful outcomes for everyone. <a href="http://www.econlib.org/library/Smith/smMS6.html">Adam Smith explained why the economy can&#8217;t be successfully engineered</a> in such a way:</p>
<blockquote><p>The man of system, on the contrary, is apt to be very wise in his own conceit; and is often so enamoured with the supposed beauty of his own ideal plan of government, that he cannot suffer the smallest deviation from any part of it. He goes on to establish it completely and in all its parts, without any regard either to the great interests, or to the strong prejudices which may oppose it. He seems to imagine that he can arrange the different members of a great society with as much ease as the hand arranges the different pieces upon a chess-board. He does not consider that the pieces upon the chess-board have no other principle of motion besides that which the hand impresses upon them; but that, in the great chess-board of human society, every single piece has a principle of motion of its own, altogether different from that which the legislature might chuse to impress upon it. If those two principles coincide and act in the same direction, the game of human society will go on easily and harmoniously, and is very likely to be happy and successful. If they are opposite or different, the game will go on miserably, and the society must be at all times in the highest degree of disorder.</p></blockquote>
<p>Even though an economy can&#8217;t be planned, or even tailored, successfully from on high, that form of scientism is at least understandable. It at least takes into account a small measure of the complexity of decentralized economic activity, even if it doesn&#8217;t — <a href="http://mises.org/journals/qjae/pdf/qjae5_3_3.pdf">indeed, <em>can&#8217;t</em></a> — consider the rest. Keynesian macroeconomics is far worse, shunning even the scientistic attempt to grapple with at least some heterogeneous microeconomic factors as being the causal source of economywide trends. Instead, they insist that policymakers expropriate as much cash as humanly possible and wallop the economy with it as hard as they can.</p>
<p>Economist <a href="http://www.thefreemanonline.org/headline/keynes-aggregates/">Steven Horwitz summed up the real prescription for economic recovery</a>:</p>
<blockquote><p>Being too focused on Keynes’s aggregates can also mislead us as to the best ways to get out of the recession once we’re in it. It may look as if all we need more is investment or more jobs. But once we understand that the “fundamental mechanisms of change” have to do with the boom’s microeconomic <em>misallocation</em> of capital and labor, we see that what is needed is a reallocation of resources not just more of them. Capital needs to move out of unproductive lines and back toward productive ones, and the same is true of labor.</p>
<p>Stimulus spending, bailouts, and extension of unemployment benefits only prevent the fundamental mechanisms of change from doing their work in unwinding the errors of the last decade.  The cure for macroeconomic discoordination is freeing up the entrepreneurial market process to reallocate and coordinate resources.  But 80 years after Hayek first made the point, the fascination by economists and politicians with Keynes’s aggregates continues to conceal the fundamental mechanisms of change, and in so doing, also continues to block the processes through which a sustainable recovery can take place.</p></blockquote>
<p>In the end, the economy is not a jukebox, and neither a mechanic nor Ben Bernanke in the coolest leather jacket ever made can save it from its turmoils. Instead, the economy is made up of hundreds of millions of people with billions of plans, many of which fail but some of which succeed. Nobody knows for sure which plans will pan out in advance — not the people making them, and certainly not their public officials.</p>
<p>Only by letting individuals, alone or in voluntary association with others, respond to local conditions with unique knowledge can <a href="http://www.thefreemanonline.org/headline/markets-are-messy/">the best plans be discovered</a>, expanded, and replicated. <a href="http://www.forbes.com/sites/timworstall/2011/11/12/keystone-xl-and-regime-uncertainty-yes-it-really-does-cause-unemployment/">That process is made much more difficult</a> when they face continual interference from central planners who <a href="http://www.nobelprize.org/nobel_prizes/economics/laureates/1974/hayek-lecture.html">only pretend they can know what&#8217;s best</a>.</p>
<p>[Cross-posted at <a href="http://www.shrubbloggers.com/2011/12/10/the-reign-of-fonzie-economics/">Shrubbloggers</a>.]</p>
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		<title>Coke Buyers Are Sovereign</title>
		<link>http://www.thelessonapplied.com/2011/12/01/coke-buyers-are-sovereign/</link>
		<comments>http://www.thelessonapplied.com/2011/12/01/coke-buyers-are-sovereign/#comments</comments>
		<pubDate>Fri, 02 Dec 2011 03:42:27 +0000</pubDate>
		<dc:creator>Wirkman Virkkala</dc:creator>
				<category><![CDATA[Economic Theory]]></category>

		<guid isPermaLink="false">http://www.thelessonapplied.com/?p=864</guid>
		<description><![CDATA[The good folks at Coca-Cola really want to innovate. They probably admire the late Steve Jobs. They&#8217;ve lots of neat ideas. Helping polar bears is one of them. So, to honor the polar bears (or at least ballyhoo their cause and plight), Coke folk changed the color of the can of their main product, Coca-Cola™. [...]]]></description>
			<content:encoded><![CDATA[<p>The good folks at Coca-Cola really want to innovate. They probably admire the late Steve Jobs. They&#8217;ve lots of neat ideas. Helping polar bears is one of them. So, to honor the polar bears (or at least ballyhoo their cause and plight), Coke folk changed the color of the can of their main product, Coca-Cola™. They made it white. You know, “polar” color.</p>
<p>And then came the uproar.</p>
<p>Coke buyers didn&#8217;t like it. Many returned the product, thinking that it was either Diet Coke (whose silver can is, actually, very similar to the new white can) or else a modified product. A few Coke drinkers said that the drink tasted different. There was general confusion, as reported in the <em><a title="A Frosty Reception" href="http://online.wsj.com/article/SB10001424052970204012004577070521211375302.html" target="_blank">Wall Street Journal</a></em>:</p>
<blockquote><p>Mel Cyr, a 17-year-old Coke drinker from Sheboygan Falls, Wis., said she and other teenagers attending this week&#8217;s National 4-H Congress in Atlanta scratched their heads after seeing the white cans. “You can’t change something that&#8217;s classic,” said Ms. Cyr.</p>
<p>4-H delegates from Wisconsin said their chaperone was mistakenly served a regular Coke on the flight to Atlanta from Milwaukee after requesting Diet Coke. “The flight attendants were really frustrated” and apologized for the mix-up, said Sara Harn, 17, of Brooklyn, Wis.</p></blockquote>
<p>Obviously, this is another innovation from Coca-Cola that didn&#8217;t take – reminiscent of the infamous “New Coke” of a few decades ago. Coca-Cola&#8217;s clientele was so negative that the august Atlanta company switched plans, and is now switching back to the red cans we all know and love, far ahead of schedule.</p>
<p>A lesson for us all. Consumers are sovereign. You can innovate up and down your line, but if consumers aren&#8217;t buying, you aren&#8217;t selling.</p>
<p>The doctrine of consumer sovereignty was defended, in the 20th century, by two curmudgeonly economists, <a href="http://en.wikipedia.org/wiki/William_Harold_Hutt" target="_blank">W.H. Hutt</a> and <a title="Robert Murphy on Mises' Consumer Sovereignty concept" href="http://mises.org/daily/1364" target="_blank">Ludwig von Mises</a>. The word choice was spot-on. “Consumers are sovereign” doesn&#8217;t mean that producers are meaningless. But the sovereign(s) have the last word, it’s the sovereign who must be pleased.</p>
<p>And that’s what capitalism is all about.</p>
<p>This lesson is probably hard on the innovators at Coca-Cola. Take the lame ending of that <em>Wall Street Journal</em> article:</p>
<blockquote><p>But Ed Rice, the 81-year-old chief executive of Ozarks Coca-Cola/Dr Pepper Bottling Company, a longtime Coke distributor in Springfield, Mo., thinks the white can was innovative and engaged consumers. He downplayed confusion between the cans.</p>
<p>“If you put the cans side by side and blink, you might have to take a second look,” said Mr. Rice, who loaded his first Coke truck in 1945. “But I think there’s a distinct difference.”</p></blockquote>
<p>Yes. But not distinct enough.</p>
<p>And besides, the customer is always right. Well, right in the one way that matters most on the market, right in being <a href="http://thisiscommonsense.com/2005/02/28/sovereignty-and-socks-for-the-people/" target="_blank">sovereign</a>.</p>
<hr />
<p><span style="color: #999999;"><em><strong>Note</strong></em>: I&#8217;m quite aware that the concept of consumer sovereignty is a metaphor, really, and not a <a title="Murphy on Rothbard on Consumer Sovereignty" href="http://mises.org/daily/1379" target="_blank">technically pristine term</a>. It was introduced by Hutt and Mises to counteract the nonsense now once again popular, the idea that corporations “push” us to do things against our will. This is patent nonsense, at least when it applies to the trades we make, the things we buy. We are pulled by producers, yes. But not pushed. We have the means to object. We can take our money elsewhere. We can simply not buy the product. As proven, once again, by the folks who drink Coke.</span></p>
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		<title>Steve Jobs: A Man of Good Works — Part I</title>
		<link>http://www.thelessonapplied.com/2011/11/06/steve-jobs-a-man-of-good-works-part-i/</link>
		<comments>http://www.thelessonapplied.com/2011/11/06/steve-jobs-a-man-of-good-works-part-i/#comments</comments>
		<pubDate>Sun, 06 Nov 2011 16:30:10 +0000</pubDate>
		<dc:creator>Justin M. Stoddard</dc:creator>
				<category><![CDATA[Corporatism]]></category>
		<category><![CDATA[Economic Theory]]></category>
		<category><![CDATA[Efficiency]]></category>
		<category><![CDATA[Gains From Trade]]></category>
		<category><![CDATA[Labor]]></category>
		<category><![CDATA[Market Efficiency]]></category>
		<category><![CDATA[Philosophy]]></category>
		<category><![CDATA[Property Rights]]></category>
		<category><![CDATA[Regulation]]></category>
		<category><![CDATA[Rhetoric]]></category>
		<category><![CDATA[Taxes]]></category>
		<category><![CDATA[Trade]]></category>
		<category><![CDATA[Unintended Consequences]]></category>

		<guid isPermaLink="false">http://www.thelessonapplied.com/?p=840</guid>
		<description><![CDATA[First, allow me to clarify a few points about the video below before I start into the meat of the matter. The video is obviously edited — for what purpose, I do not know. It could have been to cut down its length or to stitch together a narrative that puts the person being interviewed [...]]]></description>
			<content:encoded><![CDATA[<p>First, allow me to clarify a few points about the video below before I start into the meat of the matter.</p>
<p>The video is obviously edited — for what purpose, I do not know. It could have been to cut down its length or to stitch together a narrative that puts the person being interviewed in the worst possible light. Though, admittedly, given his statements, I don’t know how that’s possible.</p>
<p>I understand that people who are put on the spot with a camera in front of their face are going to stammer and search for words. After seeing thousands of these kinds of videos, I’m convinced that people generally do not do well when confronted with on-the-spot interviews.</p>
<ul>
<li style="margin-bottom: .5em;">The sentiments expressed seem to be endemic to the Occupy Wall Street movement.</li>
<li style="margin-bottom: .5em;">The easiest way for me to address this is to take it point by point with a wrap-up at the end.</li>
<li>This is going to be a long post.</li>
</ul>
<p><object width="640" height="360"><param name="movie" value="http://www.youtube.com/v/zvacSIzgSEo?version=3&amp;hl=en_US"></param><param name="allowFullScreen" value="true"></param><param name="allowscriptaccess" value="always"></param><embed src="http://www.youtube.com/v/zvacSIzgSEo?version=3&amp;hl=en_US" type="application/x-shockwave-flash" width="640" height="360" allowscriptaccess="always" allowfullscreen="true"></embed></object></p>
<blockquote><p><strong>Man on the street:</strong> &#8220;The top one percent don’t produce anything.&#8221;</p></blockquote>
<p>There are some awkward questions that need to be asked in response to this assertion.</p>
<p>Besides the obvious catchy “one percent of the people own 43 percent of the wealth” trope, why not move that arbitrary line to the top five percent? If the top one percent own 43 percent of the wealth, wouldn’t it follow that the top five percent own even more of the wealth? How about the top ten percent? The top 25 percent?</p>
<p>The arbitrary line is chosen because it fits nicely into the idea of the proletariat struggling against the bourgeois. What is being insinuated here is the top one percent own the <a href="http://en.wikipedia.org/wiki/Means_of_production">means of production</a> while the 99% are the <a href="http://en.wikipedia.org/wiki/Factors_of_production">factors of production</a>.</p>
<p>How is the “1 percent” being defined here? One percent of the population of the United States or of the population of the world?</p>
<p>The question matters a great deal, for a couple of reasons:</p>
<p>One percent of the population of the United States is a little more than 3 million people (approximately the population of Mississippi). Just playing the numbers game, it strains all credulity to accept the assertion that the more than 3 million people being referenced here don’t produce anything.</p>
<p>One percent of the world’s population is about 70 million people (approximately the population of California, New York, and Ohio combined). Of course, this takes credulity to the breaking point.</p>
<p>The question hardly needed to be asked. The only population statistic being used here is the population of the United States. The OWS crowd skirts over the fact that if they were to count the entire population of world, the majority of them would end up in the top 1 percent of people who control wealth. That’s simply an argument they dare not broach. I’ve <a href="http://www.thelessonapplied.com/2011/10/20/more-bailouts-for-the-rich/">addressed this briefly here</a>, but I’ll expound on it just a bit.</p>
<p>Even adjusting for <a href="http://en.wikipedia.org/wiki/Purchasing_power_parity">purchasing power parity</a>, if you make $34,000 or more per year, <a href="http://www.fool.com/investing/general/2011/10/28/attention-protestors-youre-probably-part-of-the-1-.aspx">you are in the top 1 percent of world income earners</a>. Income disparity between someone who makes $34,000 and someone who makes $500,000 per year in the United States seems pretty significant, but not nearly as significant as the income disparity between someone who makes $34,000 per year in the United States and someone who makes $7,000 dollars per year in India, or $1,000 per year in Africa.</p>
<p>The standard argument against this line of reasoning goes like this:</p>
<blockquote><p>“Living off of $1,000 a year in sub-Saharan Africa is a lot easier than living off of $1,000 a year in the United States. In order for the comparison to actually have any meaning we need to adjust income for the cost of living in these various countries. In some places it is possible to live off of a dollar a day, and in some places you can&#8217;t live off of a hundred dollars a day.”</p></blockquote>
<p>Lest I be accused of making up my own argument to refute, that’s a response I got on a recent Reddit thread addressing what I said above.</p>
<p>At first blush, this makes quite a bit of sense. Commodities do seem to be more expensive in the United States than they are in the Sub-Sahara (unless you are living in a country with hyper-inflation). Earning $1,000 per year will certianly not give you the purchasing power to buy or rent a house or an apartment. You may or may not be able to afford transportation. Food and clothing would also be difficult to acquire.</p>
<p>But, one is tempted to ask; would you rather live in the United States with an income of $1,000 per year or in Sub-Saharan Africa with an income of $1,000 per year?</p>
<p>Here are the two main problems I see:</p>
<p>First: The United States (and other First World countries) have many orders of magnitude more consumer goods and commodities to choose from than all of the Sub-Sahara put together. In the United States, $1,000 goes much further because there is so much more you can do with it. You must also consider basic welfare entitlements to every poor citizen in the United States to be used for food, shelter and clothing, along with other factors of income like child support payments and not being required to pay taxes.</p>
<p>It further discounts the ability to barter for goods, rely on charity, and utilize the cast-offs of the rich and middle class. Our country is awash with high-class “junk.” It is very easy to acquire clothes, furniture, gadgets (TVs, microwaves, phones, radios, etc.) just by asking for it. It’s unbelievable how much stuff the well-off just leave on the curb for others to pick up. Whole virtual communities like <a href="http://www.freecycle.org/">Freecycle</a> and <a href="http://stlouis.craigslist.org/bar/">Craigslist</a> thrive around the concept of either exchanging these types of goods or just giving them away. If you are savvy enough, it is possible to get hundreds of dollars worth of name brand products for free through the practice of <a href="http://tlc.howstuffworks.com/tv/extreme-couponing">extreme couponing</a>. There are literally hundreds of blogs dedicated to the concept of extreme frugality, meaning there are people in this country who choose to live well below the poverty line by recycling, reusing, budgeting, couponing, growing their own food, bartering, etc. From all accounts, they have healthy and happy lives.</p>
<p>Second: If you take all other factors into consideration, even for those at the very bottom of the socio-economic scale, life is comparatively much better here. On average, people in the United States live 20–35 years longer than those in the Sub-Sahara. In America, there is an infant mortality rate of eight out of every 1,000. In Mali, the rate is 191 out of 1,000.</p>
<p>While millions have perished in Africa because of famine, I have not been able to find any account of a single person starving to death in America because of an inability to acquire food. There are rare cases in which people are starved through abuse or neglect, but the issue of general access to food was not a factor. On the contrary, we are constantly reminded that we have an epidemic of obesity in our country. Looking at population statistics, this is a problem that <a href="http://www.ajcn.org/content/79/1/6.full">affects the poor</a> almost exclusively.</p>
<p>Millions more have been butchered in war, slavery, and genocide in Africa during these past 20 years. With the exception of 9/11, war, slavery, and genocide have killed exactly nobody in America — unless you count the “War on Drugs.” (I’m excluding here our military adventures overseas — which both liberals and conservatives love — and focusing on civilian deaths within our borders.</p>
<p>More than 1 million people die from AIDS/HIV in the Sub-Sahara each year. Nearly 2 million more contract the disease yearly. The region accounts for about 14 percent of the world’s population and 67 percent of all people living with HIV and 72 percent of all AIDS deaths in 2009.</p>
<p>Contrast that to the United States, where there are approximately 1 million people infected with HIV. About 56,000 new people become infected each year, while roughly 18,000 per year die from AIDS.</p>
<p>Even the poorest of poor in America have the means and ability to protect themselves from sexually transmitted diseases that ravish other populations.</p>
<p>This represents just a cursory look over publicly available data, of course, but many inferences can be drawn. Living off $1,000 per year in the United States is actually a lot easier than living off of $1,000 per year in the Sub-Sahara.</p>
<p>In the United States, $1,000 per year still makes you pretty well off compared to a huge majority of the world’s population. Instead of the OWS asking why this is the case (different economic and political policies have different economic and political outcomes), they are insisting that <em>it’s not the case</em>, in the face of all empirical evidence. It’s a complete break with reality.</p>
<p>All of this begs a basic question. We know that there are millions of people living in Africa on $1,000 per year or less, but are there people living on $1,000 per year in America?</p>
<p>Maybe. According to the 2008 United States Census, the <a href="http://en.wikipedia.org/wiki/Personal_income_in_the_United_States">number of individuals</a> living on $2,500 or less is 12,945. <a href="http://en.wikipedia.org/wiki/Household_income_in_the_United_States">If you count households</a> instead of individuals, that number drops to about 3,000.</p>
<p><a href="http://en.wikipedia.org/wiki/List_of_the_poorest_places_in_the_United_States">Looking at demographics</a>, we find that many of those either live on <a href="http://en.wikipedia.org/wiki/Pine_Ridge_Indian_Reservation">Indian</a> <a href="http://en.wikipedia.org/wiki/Rosebud_Indian_Reservation">reservations</a> or in closed off <a href="http://en.wikipedia.org/wiki/Kiryas_Joel,_New_York">religious</a> <a href="http://en.wikipedia.org/wiki/Hildale,_Utah">communities</a>. The vast majority live in very rural areas, with the exception of some communities in Texas and California.</p>
<p>This brings up another awkward question. Can we differentiate between the worthy and the unworthy poor? Is it safe to say that those living on an Indian reservation are most likely the victims of centuries of oppression, paternalism, and other factors beyond their control, and deserve our sympathies, while those whose religious doctrines call for unsustainable familial and community growth (though still collecting welfare entitlements) don’t?</p>
<p>Back to the original point. Taking this all into consideration, the speaker (along with 70 million of his fellow human beings) is more than likely in the top 1 percent of income earners in the world. Does he produce nothing? Do the other 70 million people produce nothing?</p>
<p>If he had a shred of intellectual honesty, he would advocate taxing anyone who makes $34,000 per year or more at a very high rate so that money can be redistributed to the absolute poor in Africa, India, China, Afghanistan, etc. If you’re going to advocate forced redistribution, what’s the more moral course of action? Paying off student loan debt and making secondary education free for those who are extraordinarily rich in comparison to world standards, therefore giving them further opportunities to collect more wealth, or giving that money to someone who will quite literally starve to death without it?</p>
<blockquote><p><strong>Interviewer:</strong> &#8220;Steve Jobs didn’t produce anything?&#8221;</p>
<p><strong>Man on the street:</strong> &#8220;Steve Jobs took in the wealth that others produced. No, he didn’t.&#8221;</p></blockquote>
<p>Even though you can tell he’s searching for the concept, what he’s attempting to recall is the <a href="http://www.isil.org/resources/lit/labor-theory-val.html">Labor Theory of Value</a>, which suggests that the value of goods derives from their labor inputs. Some take it a step further and suggest that goods should therefore be priced according to those labor inputs rather than in response to the demand for those products.</p>
<p>This murderous idea has been refuted too many times to count and isn’t taken seriously by mainstream economists. As with the devastating yet simple argument against <a href="http://rationalwiki.org/wiki/Pascal's_wager">Pascal’s Wager</a>, this is a case of rudimentary logic pitted against religious thinking.</p>
<p>If a laborer labors all day making mud pies instead of pumpkin pies, he may well have put in a great deal of work, but still produces absolutely nothing of value. Not understanding why someone would do that, I come along with a novel idea. Why not hire that labor (which is obviously motivated to work) and have him make pumpkin pies instead? Which is more valuable, the labor or the idea that moved the labor in a profitable direction?</p>
<p>Given time, one of my workers gets a workable idea that it will actually make it more time- and cost-efficient to <a href="http://en.wikipedia.org/wiki/Division_of_labour">divide the labor</a> and go into business for himself making ready-made pie crusts to sell back to me. In turn, he hires 10 more people.</p>
<p>Another person figures out that growing local pumpkins for production is not sustainable or efficient, so he saves his capital and starts an import business to buy pumpkins to sell back to me. In turn, he hires 10 more people. Of course, that import company creates demand from pumpkin farmers halfway across the country, signaling to them that they need to hire more people. But what about packaging? How will I wrap all those pies? Where will I get the metal for pie tins? How do I even make a pie tin? What if I want to branch off into cherry pies or apple pies? What if I want to sell coffee with those pies?</p>
<p>The Labor Theory of Value is an epic failure of imagination. At any given moment, there are two types of birds on the face of the earth, those that are airborne and those that are not. Do you know what the number of birds in each group will be, say, 10 seconds from now? The answer may well be impossible to ever figure out, but there is an answer as concrete and real as the computer screen you’re looking at. It will take a great deal of dispersed observation, knowledge, and computer power to ever figure out the answer to that question, but it takes an even greater amount of imagination to think of a use for the question in the first place.</p>
<p>On the labor side of the equation, how many people per day, independent of each other, not even knowing of each other’s existence, were involved in making Steve Jobs&#8217;s ideas a reality?</p>
<p>Can you imagine it? Can you even begin to try to imagine it? When you do, dig deeper. When you do that, dig deeper still. You will find yourself trying to comprehend a voluntary network of a number beyond your comprehension all working independently but in concert with each other in order to make that idea a reality. The vast majority have no earthly idea that they are working toward a common goal.</p>
<p>If you’ve read the essay <a href="http://www.econlib.org/library/Essays/rdPncl1.html">&#8220;I, Pencil,&#8221;</a> you can start to grasp the amazing complexity of what goes into creating one simple product. Once you’ve started to grasp that concept, you realize that an iPhone or a Macbook is nearly infinitely more complex than a pencil.</p>
<p>When you think you have a grasp on all of that, add into the mix all the competition that Steve Jobs inspired in the economy. Microsoft, Google, Android, Unix, Linux, smart phones, laptops, programming, software and hardware development, battery efficiency — the list goes on and on.</p>
<p>Multiply everything above by factors unimaginable when you add in each new facet of competition.</p>
<p>How many people were involved in making Steve Jobs&#8217;s ideas a reality? Like I said, there is a concrete answer to this question. I don’t doubt that computers will some day be able to figure it out. I’m not confident that it will ever happen in my lifetime. However, if you are able to imagine the several billion neurons in your brain exchanging countless bits of information each second, culminating in what we call human consciousness, then you are getting close to the complexity involved in the network of voluntary exchange Steve Jobs helped put into motion.</p>
<p>Now think of the consumer side of the equation. For the purpose of this example, let’s limit ourselves to the latest model iPhone. For about $199, plus a two year contract with a cellular phone company, you can walk out the door with an iPhone 4S.</p>
<p>Putting aside for a moment all the apps you can use, these are the features that come <a href="http://www.apple.com/iphone/built-in-apps/">built in, off the shelf</a>:</p>
<ul>
<li style="margin-bottom: .5em;">Two cameras, front and back. Rear camera is capable of HD, low light photography, f2/4 lens with face detection, and photo editing software.</li>
<li style="margin-bottom: .5em;">1080p HD motion stabilized video camera, accompanied by an editing suite and the ability to share videos instantly with anyone on the Internet.</li>
<li style="margin-bottom: .5em;">Facetime video teleconferencing over a WiFi connection using either the front or rear camera.</li>
<li style="margin-bottom: .5em;">Unlimited texting to other iPhone, iPad, or iPod users, with the ability to exchange videos or photos.</li>
<li style="margin-bottom: .5em;">A digital assistant that is able to help efficiently organize your daily life. It syncs with any other device you use on iCloud.</li>
<li style="margin-bottom: .5em;">A phone. Pretty standard, but it lets you talk to any other human being on the face of the earth who also has a phone. It’s ridiculously portable, so you can use it anywhere there is cell phone coverage, which is pretty much 90 percent of the United States.</li>
<li style="margin-bottom: .5em;">Email. Check your Gmail, Yahoo, AOL, Hotmail, or any other industry-standard IMAP and POP mail systems. Access multiple accounts at once. Write and send email without ever touching your keyboard by using its voice recognition software, Siri.</li>
<li style="margin-bottom: .5em;">Internet. You have a virtual world of information at your fingertips, accessible to you any time and anywhere.</li>
<li style="margin-bottom: .5em;">An iPod allows you to access your complete music library, with instant access to many thousands of songs.</li>
<li style="margin-bottom: .5em;">The video player allows you to rent or buy movies from iTunes, and either stream them or download them to your device.</li>
<li style="margin-bottom: .5em;">The photo organizer will store all your photos and organize them by location, date, or face. Take a photo and it will automatically share with all other devices hooked up to iCloud. Share photos by text, Twitter, Flickr, or Facebook. Print wirelessly through AirPrint.</li>
<li style="margin-bottom: .5em;">App Store with access to over 500,000 paid and free apps.</li>
<li style="margin-bottom: .5em;">iTunes to buy music, movies, TV shows, and ringtones. Download whole college courses and thousands of podcasts.</li>
<li style="margin-bottom: .5em;">Maps+Compass, with an automatically updated GPS displayed on up-to-date maps. Search for a location. Zoom in and out, view live traffic information, and receive point-by-point travel directions.</li>
<li style="margin-bottom: .5em;">Game Center allows you to play games against others over the web.</li>
<li style="margin-bottom: .5em;">Calendar.</li>
<li style="margin-bottom: .5em;">Contacts allows you to organize everything you want to know about a person — address, all phone numbers, email addresses, birthdays, notes, websites, and anniversaries. Make a change on one device and it is updated on all others through iCloud.</li>
<li style="margin-bottom: .5em;">Find My iPhone assists you in finding a lost or stolen iPhone by viewing its location on a map. Remotely wipe all info, remotely send a message to your phone to tell others it’s yours, and lock remotely.</li>
<li style="margin-bottom: .5em;">Newsstand to read magazines, newspapers, etc.</li>
<li style="margin-bottom: .5em;">An up-to-the-minute stock ticker.</li>
<li style="margin-bottom: .5em;">Extended weather forecasts for multiple cities and locations.</li>
<li style="margin-bottom: .5em;">A notebook.</li>
<li style="margin-bottom: .5em;">Access to YouTube.</li>
<li style="margin-bottom: .5em;">Voice Memos.</li>
<li>Calculator (scientific).</li>
</ul>
<p>Another exercise in imagination, if you will: Consider every bit of technology listed above (we will ignore the wonderful advances in lithium battery, sensor, and storage technology for the purposes of this exercise) and the infrastructure needed for it to work. Now take it back in time just 20 years, to 1991. Keep in mind, all of this wonderful technology is crammed into 4.5 by 3.11 by 0.37 inches, with a total weight of 4.9 ounces.</p>
<p>How much would something with comparable functionality cost back then?</p>
<p>The logical answer would be that the technology did not exist 20 years ago, so it would be priceless. But this is a thought exercise, so we can at least break down some of the components and price them individually.</p>
<p>In 1991, the most common portable analog phone (cell phone technology was still in its nascent stages) was a <a href="http://en.wikipedia.org/wiki/Motorola_MicroTAC">Motorola MicroTac 9800X</a>. It was lauded for its compact size, and for being the first flip phone on the market. It was an inch thick and nine inches long (when opened), and weighed close to a pound. The only thing it did was make phone calls. The quality of the calls were reportedly pretty bad. You couldn&#8217;t use the phone while traveling outside your metropolitan area, and it was pricey to make any phone call.</p>
<p>It sold for anywhere between $4,153 and $5,822 in current dollars (adjusted for inflation).</p>
<p>The first digital camera was released in 1991. It was a <a href="http://en.wikipedia.org/wiki/Kodak_DCS_100">Kodak Digital Camera System</a>, and had a resolution of 1.3 megapixels. It also came with a 200 MB hard drive that could store about 160 uncompressed images. The hard drive and batteries had to be tethered to the camera by a cable.</p>
<p>Cost in current dollars, adjusted for inflation: $33,317.</p>
<p>This is where I stopped. At just two laughingly inefficient components (according to today&#8217;s standards; back then, they were miracles of technology) in comparison to what comes standard on any iPhone available for $199, I was already hovering around an overall price of $40,000.</p>
<p>Extrapolate all of that out, including all the infrastructure required to make it work, and you can easily conclude that literally all the money in the world in 1991 could not buy you an iPhone.</p>
<p>Today, I can walk into a store conveniently located near me and get a device that makes it nearly impossible for me to get lost, lets me communicate with people I’ve known my whole life who are scattered all over the globe, allows me to take wonderful pictures and record moments of my life, provides access to all the information available on the Internet, streams any number of movies or TV shows directly to me, tells me an extended forcast, lets me video chat with my daughters and phone anyone I wish, along with any number of other things — all for the paltry sum of $199 and the price of a two-year contract.</p>
<p>A product that Bill Gates, Steve Jobs, the Queen of England, and any royal prince would be unable to purchase 20 years ago is now as ubiquitous as the air we breathe. That’s what Steve Jobs produced. And, as a bonus, the wealth created by his idea provided the means to countless other people around the world to purchase what he produced.</p>
<blockquote><p><strong>Interviewer:</strong> &#8220;The system you’re interested in is one in which somehow that voluntary web of association is no longer allowed.&#8221;</p>
<p><strong>Man on the street:</strong> &#8220;Correct.&#8221;</p></blockquote>
<p>This pretty much speaks for itself. In this guy&#8217;s preferred system that disallows voluntary economic association, in order to get from point A to point B, a whole lot of murder, mayhem, theft, and rape will have to occur first with an end result of abject poverty for hundreds of millions of people.</p>
<blockquote><p><strong>Interviewer:</strong> &#8220;So, instead of those voluntary associations, what would you put in its place? Who would make all those decisions?&#8221;</p>
<p><strong>Man on the street:</strong> &#8220;All decisions would be made democratically.&#8221;</p></blockquote>
<p>There’s quite a bit of political philosophy that can be addressed here, but the next question pretty much sums it up for me.</p>
<blockquote><p><strong>Interviewer:</strong> &#8220;Like, for instance, when Athens democratically decided to kill Socrates?&#8221;</p>
<p><strong>Man on the street:</strong> &#8230;</p></blockquote>
<p>This is a brilliant rejoinder. Popular democracy is nothing more than mob action. If everything is up for a vote and decidable by the “will of the people,” then there can be no individual rights, ever. The individual will always lose.</p>
<p>The argument I often hear in support of popular democracy goes a little something like this: Wouldn’t you vote against Hitler to keep him out of power? Well, the very fact that someone like Hitler can run for an election tells me that the system is completely invalid. If the election is deemed valid and workable because he weren’t voted in, it would be just as valid and workable if he were voted in.</p>
<p>That’s the long answer. The short answer is, “No, but I’d gladly shoot him in the face.”</p>
<p>Even the OWS crowd seems to understand that popular democracy is basically the rule of the mob, because they have set up rules in their assemblies dictating that 100 percent consensus must be reached before anything passes. But that just makes the mob smaller.</p>
<blockquote><p><strong>Man on the street:</strong> &#8220;I don’t believe there’s any need for individuals like Steve Jobs in this system to flourish based on their particular talents or particular genius.&#8221;</p></blockquote>
<p>An argument from belief is a religious argument.</p>
<p>Also, framing an argument based on what you think that other people “need” is highly paternalistic. At worst, if carried out to its logical conclusion, this line of thought is murderous, if not genocidal.</p>
<p>What is not acknowledged or understood here is the notion that a person&#8217;s talents and particular genius are priceless. A person’s talent and particular genius is nearly the whole sum of a person. Disallow a person to use his talents or genius in voluntary association with others, and you’ve essentially murdered his spirit. You’ve destroyed the greatest resource on the face of the earth, and it can never be replaced. Ever.</p>
<blockquote><p><strong>Man on the street:</strong> &#8220;I don’t believe it’s possible to continue this kind of system. It’s a retrograde system. It’s a system that no longer works. It creates war. It creates mass unemployment. It creates poverty.&#8221;</p></blockquote>
<p>I’ve already eviscerated this notion above. It obviously does work. It obviously does not create mass unemployment or poverty. It obviously does not create war.</p>
<p>In three minutes time, this person said he would do the following if he were in power:</p>
<ul>
<li style="margin-bottom: .5em;">Disallow voluntary association.</li>
<li style="margin-bottom: .5em;">Steal money (and everything money represents) that doesn&#8217;t belong to him.</li>
<li style="margin-bottom: .5em;">Impose mob rule.</li>
<li style="margin-bottom: .5em;">Hobble those with talent.</li>
<li>Impose poverty on the masses.</li>
</ul>
<p>None of this can be done without a whole lot of guns and a whole lot of cold-blooded murder. And in his mind, Steve Jobs creates war, poverty, and unemployment?</p>
<p>I’ll just put these few examples here.</p>
<ul>
<li style="margin-bottom: .5em;">Deaths in the Soviet Union from communism: <strong>20 million</strong></li>
<li style="margin-bottom: .5em;">Deaths in Communist China from communism: <strong>65 million</strong></li>
<li style="margin-bottom: .5em;">Deaths in Cambodia from communism: <strong>2 million</strong></li>
<li style="margin-bottom: .5em;">Deaths in North Korea from communism: <strong>2 million</strong></li>
<li style="margin-bottom: .5em;">Deaths in Africa from communism: <strong>1.7 million</strong></li>
<li style="margin-bottom: .5em;">Deaths in Afghanistan from communism: <strong>1.5 million</strong> (and climbing)</li>
<li style="margin-bottom: .5em;">Deaths in Eastern Europe from communism: <strong>1 million</strong></li>
<li style="margin-bottom: .5em;">Deaths in Vietnam from communism: <strong>1 million</strong></li>
<li style="margin-bottom: .5em;">Deaths in Latin America from communism: <strong>150,000</strong></li>
<li>Deaths caused by Nazi Germany and the Empire of Japan: <strong> 60 million</strong></li>
</ul>
<p>Combined with all other genocides, wars, famine and repression caused by national governments, the death toll for the 20th century is approximately <strong>160 million</strong>.</p>
<p>If you took half of the population of the United States (every other man, woman, and child) and shot them in the head, you would have the number of people murdered by governments, the majority of whom were killed by their <em>own</em> governments.</p>
<ul>
<li style="margin-bottom: .5em;">Communism, socialism, Nazism, imperialism, theocracy, statism: <strong>160 million dead</strong>.</li>
<li>Steve Jobs: <strong>Zero dead</strong>.</li>
</ul>
<p>Of those 160 million murdered, how many may have turned out to be like <a href="http://en.wikipedia.org/wiki/Norman_Borlaug">Norman Borlaug</a>, the man credited with saving up to <strong>1 billion</strong> people worldwide from starvation? For those of you counting, that&#8217;s one seventh of the world&#8217;s current population. Can one honestly confront that number and still insist that talent and genius are not important? That free association should be done away with? That mob rule should prevail?</p>
<blockquote><p><strong>Man on the street:</strong> &#8220;You know, to hell with Steve Jobs.&#8221;</p></blockquote>
<p>As <a href="http://two--four.net/weblog.php">Billy Beck</a> brilliantly said when he linked to this video on Facebook, “Have you ever seen a man cut his own throat with philosophy?”</p>
<p>Well, dear reader, you just have.</p>
<p>[Cross-posted at <a href="http://www.shrubbloggers.com/2011/11/06/steve-jobs-a-man-of-good-works-%E2%80%94-part-i/">Shrubbloggers</a>.]</p>
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		<title>&#8216;We Don&#8217;t Need a Special Master to Level the Playing Field&#8217;</title>
		<link>http://www.thelessonapplied.com/2011/10/26/we-dont-need-a-special-master/</link>
		<comments>http://www.thelessonapplied.com/2011/10/26/we-dont-need-a-special-master/#comments</comments>
		<pubDate>Wed, 26 Oct 2011 21:59:51 +0000</pubDate>
		<dc:creator>Eric D. Dixon</dc:creator>
				<category><![CDATA[Corporatism]]></category>
		<category><![CDATA[Politics]]></category>
		<category><![CDATA[Public Choice]]></category>
		<category><![CDATA[Unintended Consequences]]></category>

		<guid isPermaLink="false">http://www.thelessonapplied.com/?p=830</guid>
		<description><![CDATA[Cafe Hayek&#8216;s Russ Roberts tells the House Oversight Committee that he wants his country back. Highlights of his testimony: We are what we do — not what we wish to be, not what we say we are, but what we do. And what we do here in Washington is rescue large companies, large financial institutions, [...]]]></description>
			<content:encoded><![CDATA[<p><a href="http://www.cafehayek.com/">Cafe Hayek</a>&#8216;s Russ Roberts <a href="http://www.youtube.com/watch?v=YuZxLdGdUPQ">tells the House Oversight Committee that he wants his country back</a>. Highlights of his testimony:</p>
<blockquote><p>We are what we do — not what we wish to be, not what we say we are, but what we do. And what we do here in Washington is rescue large companies, large financial institutions, and rich people from the consequences of their mistakes. When mistakes don&#8217;t cost you anything, you do more of them. When your teenager drives drunk and wrecks the car, you keep giving him a do-over, repairing the car and handing him his keys, he&#8217;ll keep driving drunk. Washington keeps giving bad banks and Wall Street firms a do-over: &#8216;Here are the keys; keep driving!&#8217; The story always ends with a crash.</p></blockquote>
<p>And:</p>
<blockquote><p>We need to stop trying to imagine we can design housing markets, mortgage markets, financial markets, and compensation.</p></blockquote>
<p><a href="http://www.youtube.com/watch?v=YuZxLdGdUPQ">Watch the whole thing</a>:</p>
<p><object width="480" height="360"><param name="movie" value="http://www.youtube.com/v/YuZxLdGdUPQ?version=3&amp;hl=en_US"></param><param name="allowFullScreen" value="true"></param><param name="allowscriptaccess" value="always"></param><embed src="http://www.youtube.com/v/YuZxLdGdUPQ?version=3&amp;hl=en_US" type="application/x-shockwave-flash" width="480" height="360" allowscriptaccess="always" allowfullscreen="true"></embed></object></p>
<p>[Cross-posted at <a href="http://www.shrubbloggers.com/2011/10/26/we-dont-need-a-special-master/">Shrubbloggers</a>.]</p>
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		<title>More Bailouts for the Rich</title>
		<link>http://www.thelessonapplied.com/2011/10/20/more-bailouts-for-the-rich/</link>
		<comments>http://www.thelessonapplied.com/2011/10/20/more-bailouts-for-the-rich/#comments</comments>
		<pubDate>Fri, 21 Oct 2011 01:45:48 +0000</pubDate>
		<dc:creator>Justin M. Stoddard</dc:creator>
				<category><![CDATA[Economic Theory]]></category>
		<category><![CDATA[Government Spending]]></category>
		<category><![CDATA[Labor]]></category>
		<category><![CDATA[Politics]]></category>
		<category><![CDATA[Taxes]]></category>
		<category><![CDATA[Trade]]></category>

		<guid isPermaLink="false">http://www.thelessonapplied.com/?p=815</guid>
		<description><![CDATA[The rich on Wall Street are demanding more bailouts: The Demands Working Group of Occupy Wall Street unanimously endorsed and is circulating for discussion the following demand, which will be submitted to the General Assembly of OWS: Jobs for ALL – A Massive Public Works and Public Service Program We demand a massive public works [...]]]></description>
			<content:encoded><![CDATA[<p>The rich on Wall Street are <a href="http://lbo-news.com/2011/10/20/ows-demands-working-group-jobs-for-all/" target="_blank">demanding more bailouts</a>:</p>
<blockquote><p>The Demands Working Group of Occupy Wall Street unanimously endorsed and is circulating for discussion the following demand, which will be submitted to the General Assembly of OWS:</p>
<p>Jobs for ALL – A Massive Public Works and Public Service Program</p>
<p>We demand a massive public works and public service program with direct government employment at prevailing (union) wages, paid for by taxing the rich and corporations, by immediately ending all of America’s wars, and by ending all aid to authoritarian regimes to create 25 million new jobs to:</p>
<p>-Expand education: cut class sizes and provide free university for all;<br />
-Expand healthcare and provide free healthcare for all (single payer system);<br />
-Build housing, guarantee decent housing for all;<br />
-Expand mass transit, provided for free;<br />
-Rebuild the infrastructure—bridges, flood control, roads;<br />
-Research and implement clean energy alternatives; and<br />
-Clean up the environment.</p></blockquote>
<p>Wait, you didn&#8217;t think I was talking about corporate bailouts, did you?</p>
<p>No, I’m talking about the rich people who make up the Working Group of Occupy Wall Street.</p>
<p>There is a very inconvenient and awkward question that is not being answered by the OWS crowd, as it <a href="http://tutor2u.net/blog/index.php/economics/comments/world-income-inequality-chart/">pertains to wealth</a>. Even making the assumption that the majority of those protesting are lower-middle class (a very liberal assumption, by anecdotal evidence), that would still mean that they are richer than 80 to 90 percent of the world’s population.</p>
<p>In fact, the poorest 5 percent of the United States is still richer than 68 percent of the world’s population. When compared to the poorest in India, China, or Afghanistan, the inequality is breathtakingly staggering. That college kid who is 60 grand in debt may as well be Bill Gates to a girl born in parts of rural China or Afghanistan.</p>
<p>Whenever this is brought up, you will inevitably hear this as a riposte:</p>
<blockquote><p>&#8220;The problem is that attitude can be very easily used as an excuse for dismissing the complaints of literally anyone who is not the most oppressed, marginalised, and miserable people in the world.&#8221;</p></blockquote>
<p>In other words, you cannot ignore what is bad here because things are worse elsewhere.</p>
<p>Well, that statement may well have merit, were it argued in another context. In this context, it is meaningless. Here’s why.</p>
<p>The above “demands” have everything to do with trying to bring the classes to a parity rather than fixing the economy. We are constantly barraged with the 99 percent vs. the 1 percent rhetoric. This, in itself is a lie. At worst, the people protesting on Wall Street are the 32 percent. More likely, they are the 20 percent and up.</p>
<p>If there were one shred of intellectual honesty in this movement, the above demands would be much, much different. They would be calling for taxing everyone in America at a much higher rate and redistributing that money to the poor in China and India. As the holders of 20 percent of the world’s wealth, they surely can afford it. After all, there are millions upon millions of people living in soul-crushing, abject poverty at this very moment. A vast number of them can never hope to make more than $1 per day, if that.</p>
<p>Instead, we get demands for free education and free housing for all (well, for all the rich people living in the United States, anyway — everyone else can go get stuffed). This is nothing more than the rich seeking taxpayer money for bailouts through the use of force.</p>
<p>Sound familiar?</p>
<p>I’m not being flippant, here. When it comes to entitlements, tariffs, trade barriers, immigration or where I purchase my goods, I’ve not yet heard a convincing argument for why I should regard a middle-class or working poor American in any higher regard than the absolute poor of other countries.</p>
<p>When I’m told that I should buy American in order to save American jobs, I wonder why a South Korean’s job is of any less importance. When I’m told that I must pay my fair share to help the deserving and undeserving (relatively) poor of this country, I wonder why the absolute poor from other countries shouldn&#8217;t get that money first.</p>
<p>But this is what it’s come to, now.</p>
<p>Rich college-age kids asking for taxpayer funded bailouts in order to relieve them of a debt (paid by the taxpayers) that they voluntarily took on with full knowledge that they would have to pay it back. Not only that, the vast majority of them have the means to pay off said debt through hard word and dedication.</p>
<p>Now, tell me again why I should care that a rich kid got a liberal arts degree that didn’t pan out, when tens of millions are living in absolute poverty around the world. Tell me again why rich kids with liberal arts degrees aren’t sacrificing their income, well-being, and happiness to redistribute their wealth to those more in need.</p>
<p>It’s time that we stopped focusing on this murderous idea of &#8220;inequality&#8221; when we should be thinking instead of relative standards of living over time.</p>
<p>Maybe then we can focus on what’s wrong with our economy rather than just fight about which rich group of people get which bailouts.</p>
<p>[Cross-posted at <a href="http://www.shrubbloggers.com/2011/10/20/more-bailouts-for-the-rich/">Shrubbloggers</a>.]</p>
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		<title>The Keynesian Celebration of Destruction</title>
		<link>http://www.thelessonapplied.com/2011/10/19/the-keynesian-celebration-of-destruction/</link>
		<comments>http://www.thelessonapplied.com/2011/10/19/the-keynesian-celebration-of-destruction/#comments</comments>
		<pubDate>Wed, 19 Oct 2011 06:05:10 +0000</pubDate>
		<dc:creator>Eric D. Dixon</dc:creator>
				<category><![CDATA[Economic Theory]]></category>
		<category><![CDATA[Efficiency]]></category>
		<category><![CDATA[Government Spending]]></category>
		<category><![CDATA[Market Efficiency]]></category>
		<category><![CDATA[Regulation]]></category>
		<category><![CDATA[Spontaneous Order]]></category>

		<guid isPermaLink="false">http://www.thelessonapplied.com/?p=809</guid>
		<description><![CDATA[Here&#8217;s a great cartoon from Completely Serious Comics published earlier this year, currently being passed around on Facebook by critics of Keynesian stimulus: I doubt the cartoon&#8217;s creators were thinking about government stimulus of aggregate demand when they conceived this, so it has become a piece of appropriated satire. And, like pretty much all great [...]]]></description>
			<content:encoded><![CDATA[<p>Here&#8217;s <a href="http://www.completelyseriouscomics.com/index.php?strip_id=37">a great cartoon from Completely Serious Comics</a> published earlier this year, currently being passed around on Facebook by critics of Keynesian stimulus:</p>
<p><a href="http://www.completelyseriouscomics.com/index.php?strip_id=37"><img src="http://www.thelessonapplied.com/images/20110210_completelyseriouscomics_marketing.jpg" width="500" border="0" alt="Marketing, by Completely Serious Comics" title="Marketing, by Completely Serious Comics" /></a></p>
<p>I doubt the cartoon&#8217;s creators were thinking about government stimulus of aggregate demand when they conceived this, so it has become a piece of appropriated satire. And, like pretty much all great satire, it doesn&#8217;t play completely fair with its target. Even so, it contains a substantial nugget of truth.</p>
<p>Readers of this blog who are familiar with <a href="http://fee.org/library/books/economics-in-one-lesson/">the book from which it takes its name</a> will be well-acquainted with the <a href="http://en.wikipedia.org/wiki/Parable_of_the_broken_window">broken window fallacy</a>, first created as a parable by <a href="http://www.econlib.org/library/Bastiat/basEss1.html">Frédéric Bastiat</a> and later <a href="http://fee.org/library/books/economics-in-one-lesson/#0.1_L3">appropriated by Henry Hazlitt</a>, who applied it to a mid–20th century economy.</p>
<p>In a nutshell, the parable explains why destruction doesn&#8217;t make a society wealthier. It may stimulate short-run economic activity as people rush to replace and rebuild what they&#8217;ve lost, but always at the expense of overall prosperity.</p>
<p>Within the past few years, Bastiat&#8217;s and Hazlitt&#8217;s critical heirs have <a href="http://reason.com/archives/2011/08/24/broken-windows-around-the-worl">applied the fallacy again and again to modern Keynesians</a>. Here&#8217;s a video that does exactly that to Paul Krugman&#8217;s application of Keynesian theory to the destruction wrought by terrorist attacks (<a href="http://www.thelessonapplied.com/2010/04/03/countering-the-keynesian/">featured on this blog last year</a>):</p>
<p><object width="640" height="360"><param name="movie" value="http://www.youtube.com/v/SQFhm4s_-Pk?version=3&amp;hl=en_US"></param><param name="allowFullScreen" value="true"></param><param name="allowscriptaccess" value="always"></param><embed src="http://www.youtube.com/v/SQFhm4s_-Pk?version=3&amp;hl=en_US" type="application/x-shockwave-flash" width="640" height="360" allowscriptaccess="always" allowfullscreen="true"></embed></object></p>
<p>One objection to this line of thought could be that the broken window parable doesn&#8217;t apply to general stimulus, because government spending absent a disaster isn&#8217;t the same thing as destruction, and so isn&#8217;t analogous with a broken window. One response to this objection would be that the broken window parable is <a href="http://www.econlib.org/library/Bastiat/basEss1.html">part of a larger essay about the unseen effects of various types of economic action</a>. People explaining the arguments in the larger essay, which does indeed include government spending, might reasonably refer to them by invoking the best-known portion of that essay, the parable of the broken window. Conjuring the whole of an essay by referring to one part would be a kind of allegorical synecdoche, if you will.</p>
<p>Another response would be that spending may not destroy useful physical objects, true enough, but it does <a href="http://www.cato.org/pub_display.php?pub_id=12851">divert resources from more productive to less productive uses</a>. Although private-sector businesses can&#8217;t be sure what their most productive potential investment will be, <a href="http://www.econlib.org/library/Essays/hykKnw1.html">the government is by nature even less informed</a> and therefore less capable of investing wisely. Siphoning resources from the private sector to the public sector destroys wealth, even if it doesn&#8217;t destroy specific goods. An allegory of a destroyed object certainly applies to the reality of destroyed wealth.</p>
<p>Keynesian apologists, and even <a href="http://marginalrevolution.com/marginalrevolution/2005/09/the_broken_wind.html">some non-Keynesians</a>, have cried foul in still more nuanced ways, pointing out that advocates of government stimulus don&#8217;t per se <em>want</em> destruction, and <a href="http://thinkprogress.org/yglesias/2011/08/23/302565/the-anti-keynesian-two-step/">may not even think it will bring increased wealth</a>, but think instead that it will increase short-term economic activity, increasing employment and smoothing over economically troubled times.</p>
<p>There are indeed shades of meaning and intent here. Believing that destruction may benefit the economy in some structural way, thereby sustaining short-term damage for long-term gain, isn&#8217;t the same thing as thinking that any individual act of destruction will increase economic wealth. After all, as Joseph Schumpeter pointed out, <a href="http://en.wikipedia.org/wiki/Creative_destruction">entrepreneurs engage in short-term &#8220;creative&#8221; destruction</a> all the time, writing off temporary losses as a necessary cost of pursuing their visions for long-term productive investment.</p>
<p>The evidence, however, shows that government spending intended to stimulate the economy and smooth out the business cycle <a href="http://www.antolin-davies.com/conventionalwisdom/spend.pdf">instead exacerbates the business cycle</a>, leading both to higher peaks and lower valleys.</p>
<p>As <a href="http://cafehayek.com/2011/08/the-microeconomics-of-the-broken-window-fallacy.html">Russ Roberts pointed out at Cafe Hayek</a>:</p>
<blockquote><p>So the hurricane <em>will</em> put carpenters back to work. But it would be even better if there had been no hurricane and people had just given them a check. Charity is more productive than destroying stuff and paying people to get back to square one.</p>
<p>But the charity approach is what we’ve been doing for the last few years. It’s called unemployment insurance. I know, it’s supposed to be stimulative but there’s no sign that it is. Why would it be? It doesn’t solve the problem that there are too many carpenters.</p></blockquote>
<p>When there&#8217;s a downturn in the business cycle, there&#8217;s a structural problem with the economy — too many people in some occupations, not enough people in others. General stimulus provides no economic information about where people should go to find sustainable productive work, meeting real demands by providing the goods and services that people want rather than the trumped-up illusory demand prompted by government spending. You can&#8217;t build a healthy body on a string of sugar rushes, and you can&#8217;t build a healthy economy on a series of artificial top-down influxes of cash.</p>
<p>Stimulus only spurs some sectors of the economy by dampening others, whether present or future. The more that government officials tamper with the economic signals that let entrepreneurs know when they should invest and when they should steer clear, the more skittish investors become. <a href="http://blog.independent.org/2011/10/08/important-new-evidence-on-regime-uncertainty/">Regime uncertainty entrenches malinvestment</a>, and keeps the economy limping along.</p>
<p>So, Keynesians, please stop celebrating destruction as a cure for economic ills. If truly creative destruction needs to happen in order to move less productive resources into more productive uses, private-sector entrepreneurs have the decentralized knowledge necessary to determine which of their own resources need to be replaced or reshuffled. Government officials do not.</p>
<p>The only real cure for our lagging economy is for the government to <a href="http://mises.org/daily/5593">quit breaking windows</a>.</p>
<p>[Cross-posted at <a href="http://www.shrubbloggers.com/2011/10/19/the-keynesian-celebration-of-destruction/">Shrubbloggers</a>.]</p>
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		<title>What if there were deficit thinking, thinking deficit, on a desert island?</title>
		<link>http://www.thelessonapplied.com/2011/08/09/what-if-there-were-deficit-thinking-thinking-deficit-on-a-desert-island/</link>
		<comments>http://www.thelessonapplied.com/2011/08/09/what-if-there-were-deficit-thinking-thinking-deficit-on-a-desert-island/#comments</comments>
		<pubDate>Tue, 09 Aug 2011 07:43:52 +0000</pubDate>
		<dc:creator>David M. Brown</dc:creator>
				<category><![CDATA[Culture]]></category>
		<category><![CDATA[Economic Theory]]></category>
		<category><![CDATA[Efficiency]]></category>
		<category><![CDATA[Finance]]></category>
		<category><![CDATA[Food Policy]]></category>
		<category><![CDATA[Gains From Trade]]></category>
		<category><![CDATA[Government Spending]]></category>
		<category><![CDATA[Health Care]]></category>
		<category><![CDATA[Labor]]></category>
		<category><![CDATA[Law Enforcement]]></category>
		<category><![CDATA[Local Government]]></category>
		<category><![CDATA[Market Efficiency]]></category>
		<category><![CDATA[Nanny State]]></category>
		<category><![CDATA[Philosophy]]></category>
		<category><![CDATA[Politics]]></category>
		<category><![CDATA[Property Rights]]></category>
		<category><![CDATA[Taxes]]></category>
		<category><![CDATA[Trade]]></category>
		<category><![CDATA[Unintended Consequences]]></category>

		<guid isPermaLink="false">http://www.thelessonapplied.com/?p=801</guid>
		<description><![CDATA[Let’s attempt the program of “economic stimulus” on a desert island. Five persons have survived the shipwreck. Joe is good at gathering berries and reeds, and dressing wounds; Al is good at fishing, hunting and basket-weaving; Bob is good at making huts and gourd-bowls; and Sam, who wants to spend all his time sharpening sticks, [...]]]></description>
			<content:encoded><![CDATA[<p>Let’s attempt the program of “<a href="http://www.thelessonapplied.com/2010/04/03/countering-the-keynesian/"><strong>economic stimulus</strong></a>” on a desert island. Five persons have survived the shipwreck. Joe is good at gathering berries and reeds, and dressing wounds; Al is good at fishing, hunting and basket-weaving; Bob is good at making huts and gourd-bowls; and Sam, who wants to spend all his time sharpening sticks, and who regards any other kind of employment as beneath him, cannot produce a tool of any usefulness.</p>
<p>Let more and more of the resources that would have been exchanged in life-fostering and productivity-fostering trade between Joe, Al and Bob be confiscated by a fifth person, the king (who happens to have the only gun, a Kalashnikov that he grabbed from the ship before it crashed; elsewise no one would listen to him). And let this confiscated wealth (after a suitably large finder’s fee for the king has been deducted) be given to Sam to subsidize his slow and pointless blunt-stick production, since it would allegedly be unacceptable for Sam to have to accept alms in accordance with the sympathies and judgments of his fellows. And let the king perpetually demand more and more “revenue” to distribute and perpetually bray that criticism of his taxing and spending policies by &#8220;economic terrorists&#8221; is undermining confidence in the island’s economy.</p>
<p>What are the effects of this confiscatory and redistributive process on the prospects for the islanders’ survival? Discuss.</p>
<p>[<a href="http://davidmbrowndotcom.wordpress.com/2011/08/09/what-if-there-were-deficit-thinking-thinking-deficit-on-a-desert-island/">Cross-posted to Davidmbrowndotcom.</a>]</p>
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		<title>Not Even Close</title>
		<link>http://www.thelessonapplied.com/2011/06/21/not-even-close/</link>
		<comments>http://www.thelessonapplied.com/2011/06/21/not-even-close/#comments</comments>
		<pubDate>Tue, 21 Jun 2011 07:25:21 +0000</pubDate>
		<dc:creator>John W. Payne</dc:creator>
				<category><![CDATA[Philosophy]]></category>
		<category><![CDATA[Property Rights]]></category>

		<guid isPermaLink="false">http://www.thelessonapplied.com/?p=793</guid>
		<description><![CDATA[Sometimes an article comes along that is so blindingly stupid and misinformed that the mind reels in a vain attempt to understand how such a thing could be published by any semi-reputable organization. In my personal experience, these articles often discuss the history of the libertarian movement or libertarian ideas. I&#8217;m certainly not contending that [...]]]></description>
			<content:encoded><![CDATA[<p>Sometimes an article comes along that is so blindingly stupid and misinformed that the mind reels in a vain attempt to understand how such a thing could be published by any semi-reputable organization. In my personal experience, these articles often discuss the history of the libertarian movement or libertarian ideas. I&#8217;m certainly not contending that this is the only subject that attracts wildly inaccurate commentary like a picnic attracts ants, but it&#8217;s the one where I can spot these stories most easily. </p>
<p>Today&#8217;s entry is <a href="http://www.slate.com/id/2297019/pagenum/all/#p2">this deeply confused article</a> on the supposedly baleful influence of philosopher Robert Nozick and his 1974 book <em>Anarchy, State, and Utopia</em>. The only proper response to a piece this nonsensical is something like this:</p>
<p><iframe width="560" height="349" src="http://www.youtube.com/embed/5hfYJsQAhl0" frameborder="0" allowfullscreen></iframe></p>
<p>Nonetheless, I am going to attempt to correct some of author Stephen Metcalf&#8217;s more glaring errors.</p>
<p>First, the central conceit of the article&#8211;or at least the subtitle&#8211;is flat out wrong. Nozick did write that &#8220;The libertarian position I once propounded now seems to me seriously inadequate.&#8221; Metcalf assumes that this statement is a renunciation of libertarianism, but that&#8217;s not what Nozick meant, <a href="http://www.cato-at-liberty.org/misunderstanding-nozick-again/">as Nozick himself explained</a> in an interview shortly before his death:</p>
<blockquote><p>What I was really saying in The Examined Life was that I was no longer as hardcore a libertarian as I had been before. But the rumors of my deviation (or apostasy!) from libertarianism were much exaggerated. I think this book makes clear the extent to which I still am within the general framework of libertarianism, especially the ethics chapter and its section on the “Core Principle of Ethics.”</p></blockquote>
<p>Sadly, it doesn&#8217;t get any better from there. Metcalf quotes Keynes as highly critical of Friedrich Hayek&#8217;s <em>The Road to Serfdom</em>, claiming that Keynes scribbled in the margins of his copy, &#8220;An extraordinary example of how, starting with a mistake, a remorseless logician can end up in Bedlam.&#8221; Again, Keynes did write that and about Hayek no less, but the line appeared in his review of the dense economic tome <em>Prices and Production</em>. Liberal economist <a href="http://delong.typepad.com/sdj/2011/06/yes-it-is-another-slate-fail-edition.html">Brad Delong first blogged this error</a> and goes on to note that Keynes was actually quite found of <em>The Road to Serfdom</em>, calling it &#8221; a grand book&#8230;.Morally and philosophically I find myself in agreement with virtually the whole of it: and not only in agreement with it, but in deeply moved agreement.&#8221;</p>
<p>Even more importantly, Metcalf drastically overstates Nozick&#8217;s importance:</p>
<blockquote><p>I like to think that when Nozick published Anarchy, the levee broke, the polite Fabian consensus collapsed, and hence, in rapid succession: Hayek won the Nobel Prize in economics in 1974, followed by Milton Friedman in &#8217;75, the same year Thatcher became Leader of the Opposition, followed by the California and Massachusetts tax revolts, culminating in the election of Reagan, and … well, where it stops, nobody knows.</p></blockquote>
<p>Metcalf may like to think that, but that doesn&#8217;t make it true. Don&#8217;t get me wrong&#8211;Nozick was one of the intellectual giants of libertarianism and made the philosophy a somewhat respectable position among academic philosophers. That&#8217;s a very insular group, however, and Metcalf presents no evidence that it was Nozick&#8217;s popularity that propelled Hayek and Friedman to their Nobel Prizes. Probably because that evidence doesn&#8217;t exist.</p>
<p>A more plausible explanation for the <a href="http://en.wikipedia.org/wiki/Nobel_Memorial_Prize_in_Economics">Sveriges Riksbank&#8217;s recognition</a> of Hayek and Friedman is that the Keynesian consensus was collapsing in the mid-1970s, and Hayek and Friedman offered alternative theories. The combination of slow economic growth and high inflation known as <a href="http://en.wikipedia.org/wiki/Stagflation">stagflation</a> is essentially impossible under classic Keynesian models, but both the British and American economies seemed cursed with it in the 1970s. Contrary to Metcalf&#8217;s nostalgia, the 1970s were a terrible decade economically, and Keynesian economics proved inadequate to address the problems we faced. I don&#8217;t deny that Nozick was a powerful advocate for libertarianism, but the economic crisis did more to shift people&#8217;s views on economic policy in a more market oriented direction than any single thinker.</p>
<p>Furthermore, although Nozick played an important role in the history of libertarian ideas, I believe he has been less influential than any of the other big names, by which I mean Milton Friedman, Friedrich Hayek, Ludwig von Mises, Ayn Rand, and Murray Rothbard. I&#8217;ve been active in libertarian circles for nearly a decade now. I work for a free market think tank. I probably know around 1,000 libertarians personally. Yet I have not heard even a single person credit Robert Nozick for making them a libertarian. I&#8217;ve heard all the others&#8211;more times than I can count&#8211;but Nozick comes up only occasionally as an influence and never as the decisive one. I readily concede that this is not a scientific measure of Nozick&#8217;s influence among libertarians, but this is not a huge movement, and after working within it for this long, I think I have a pretty good sense of who the big influences are&#8230;or at least a better sense than Stephen Metcalf.</p>
<p>All this might be forgivable if Metcalf&#8217;s assault on Nozick&#8217;s famous Wilt Chamberlain thought experiment&#8211;which occupies a huge chunk of the article&#8211;was accurate and interesting. Unfortunately, Metcalf only engages with a strawman version of Nozick&#8217;s argument. Metcalf seems to think that Nozick intended for the Wilt Chamberlain example to be some kind of allegory for the economy as a whole. Instead, Nozick was simply showing why a specific pattern of wealth distribution is impossible to maintain without constant government intervention. As Auburn University philosopher Roderick Long <a href="http://www.thefreemanonline.org/featured/robert-nozick-philosopher-of-liberty/">explained in a 2002 article commemorating Nozick&#8217;s life and work</a>:</p>
<blockquote><p>ASU‘s most famous argument–the “Wilt Chamberlain example”–is also its most misunderstood. Criticizing “patterned” theories of justice–that is, those that regard the distribution of resources in society as just only if it fits some preconceived pattern (say, equality)–Nozick asked us to imagine a society that in fact realizes the desired pattern. He pointed out that if people are free to transfer their resources as they wish, the society will quickly deviate from the established pattern, as some individuals, like basketball star Wilt Chamberlain, become wealthy as a result of the voluntary decisions of other members of society who are willing to purchase the exercise of their talents.</p>
<p>If the original pattern is to be maintained at all costs, then the government must “continually interfere to stop people from transferring resources as they wish”; hence no patterned theory of justice can be implemented without “continuous interference in people’s lives” (p. 163). Nozick thus rejected patterned theories in favor of a “historical” theory, according to which a given distribution of resources, regardless of what pattern it fits, is legitimate so long as it arose through a process involving no violations of anybody’s rights.
</p></blockquote>
<p>Metcalf&#8217;s abuse of the facts are by no means limited to those detailed here, but going through all of them would require an article far longer than his original. In fact, if Slate removed everything that is incorrect or misleading in the article, they&#8217;d soon be left with nothing but prepositions. For that reason, I believe Slate&#8217;s editors should retract this piece. Not because I disagree with many of Metcalf&#8217;s philosophical principles, although that does appear to be the case, but because even with heavy editing and correction, this article is so fallacious that it detracts from public discourse.</p>
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		<title>Do Markets Need Fairness?</title>
		<link>http://www.thelessonapplied.com/2011/06/19/do-markets-need-fairness/</link>
		<comments>http://www.thelessonapplied.com/2011/06/19/do-markets-need-fairness/#comments</comments>
		<pubDate>Sun, 19 Jun 2011 23:11:50 +0000</pubDate>
		<dc:creator>Sarah Brodsky</dc:creator>
				<category><![CDATA[Efficiency]]></category>
		<category><![CDATA[Market Efficiency]]></category>

		<guid isPermaLink="false">http://www.thelessonapplied.com/?p=786</guid>
		<description><![CDATA[I was surprised by this post on Common Sense Concept, a blog published by the American Enterprise Institute. Although the author has written in support of private charity, in this post he argues that fairness in terms of material outcomes is not desirable. He supports this argument with quotations from various Christian texts and concludes [...]]]></description>
			<content:encoded><![CDATA[<p>I was surprised by <a href="http://www.commonsenseconcept.com/fairness-doesnt-matter/">this post</a> on Common Sense Concept, a blog published by the <a href="http://www.aei.org/">American Enterprise Institute</a>. Although the author <a href="http://www.commonsenseconcept.com/help-the-poor/">has written in support of private charity</a>, in this post he argues that fairness in terms of material outcomes is not desirable. He supports this argument with quotations from various Christian texts and concludes by saying, &#8220;Let us be content with managing our own affairs&#8221;.</p>
<p>I won&#8217;t address the religious justification for this position, but I&#8217;d like to point out that the author is overlooking several ways in which fairness matters for the free market. First, unfair outcomes such as poverty and economic immobility can be an indication that the market is not working so well as it should. This may be caused by government intervention or incompetence, as when centralized education policies trap poor children in schools that don&#8217;t prepare them to enter the workforce. Or it may be a sign of untapped opportunities, like the lack of access to banking services by residents of the central Amazon. Whether the solution is the curtailment of government power or <a href="http://online.wsj.com/article/SB10001424052748704625004575089731001335118.html">entrepreneurial innovation</a>, we should heed these instances of unfairness so that we can make the market better.</p>
<p>Second, economic conditions change and the people who are privileged today could be needy tomorrow. We&#8217;ve all heard stories of people who lost their life savings in the latest recession; even in calmer economic times, giant corporations and once-profitable-looking investments can vanish as technology evolves. The existence of a safety net, possibly based on private charity, could give people the confidence to start new ventures and to take the risks necessary for innovation, knowing that their basic needs will be met if they fail. Charities should also ensure that the poorest people can survive without resorting to theft and crime, which can cripple a market system. The post&#8217;s author might counter that we should give charity without regard to fairness, but I don&#8217;t see how that&#8217;s possible. Do you give charity to the first wealthy person who walks by your door? Of course not. You look for the people who need charity the most&#8211;in short, the people in the least fair situations.</p>
<p>Finally, I&#8217;d like to remind the author that we don&#8217;t have a free market with perfect efficiency. While based on the econ textbooks, one might think that demand for innovations will lead to an increase in the number and quality of innovators, in real life that doesn&#8217;t always happen. If the person who could have cured cancer or revolutionized communications was born into unfair circumstances, he might not obtain the necessary human capital investments through no fault of his own. That&#8217;s not just a tragedy for him. It makes the rest of us poorer too because we don&#8217;t get to benefit from his potential contribution to the economy. So while we shouldn&#8217;t count on government to smooth every inequity, we should give serious thought to fairness if we want a successful market.</p>
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		<title>The Language of Markets</title>
		<link>http://www.thelessonapplied.com/2011/04/14/the-language-of-markets/</link>
		<comments>http://www.thelessonapplied.com/2011/04/14/the-language-of-markets/#comments</comments>
		<pubDate>Thu, 14 Apr 2011 22:29:00 +0000</pubDate>
		<dc:creator>Justin M. Stoddard</dc:creator>
				<category><![CDATA[Education]]></category>

		<guid isPermaLink="false">http://www.thelessonapplied.com/?p=779</guid>
		<description><![CDATA[Diane Ravitch of NYU talks with EconTalk host Russ Roberts about the ideas in her new book, The Death and Life of the Great American School System: How Testing and Choice Are Undermining Education. Click here for the podcast and the supplementary information. Here&#8217;s the money quote from the very end of the discussion: I [...]]]></description>
			<content:encoded><![CDATA[<p>Diane Ravitch of NYU talks with EconTalk host Russ Roberts about the ideas in her new book, The Death and Life of the Great American School System: How Testing and Choice Are Undermining Education. </p>
<p><a href="http://www.econtalk.org/archives/2010/04/ravitch_on_educ.html">Click here for the podcast and the supplementary information.</a></p>
<p>Here&#8217;s the money quote from the very end of the discussion:</p>
<blockquote><p>I think the problem with what I would call a market language rather than a market process is that, too often, government policy takes the language of markets, which is fundamentally about incentives, which is what this is about, and then tries to graft them into institutional arrangements where there&#8217;s no market process. There&#8217;s bureaucracy or government mandates, and the incentives are supposed to then be tailored and tweaked so that it looks like&#8230;acts like a market, because it has these incentives. And, the problem is without the full range of effects, it doesn&#8217;t work at all.</p>
<p>It reminds me of the California energy market, when they tried to use incentives to allocate energy, but they didn&#8217;t have a market. It was a government created market. And, it seems we&#8217;re are doing that in education, that the main beneficiaries are the people who, as we talked about earlier, who fund the&#8230;who create the circular add-ons, the consulting, the training, all the bells and whistles. They don&#8217;t get to the students. And, yet, it has the language of markets, so people like me are going to be lured into thinking, &#8216;well, they&#8217;re incentives, so it&#8217;s just like a market.&#8217; But, it&#8217;s not. And, there&#8217;s no fundamental process that allows those market improvements to take place.</p>
</blockquote>
<p><em>[Cross-posted at <a href="http://www.shrubbloggers.com/2011/04/14/the-language-of-markets/">Shrubbloggers</a>.]</em></p>
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		<title>Burn This Post</title>
		<link>http://www.thelessonapplied.com/2011/04/04/burn-this-post/</link>
		<comments>http://www.thelessonapplied.com/2011/04/04/burn-this-post/#comments</comments>
		<pubDate>Tue, 05 Apr 2011 01:20:32 +0000</pubDate>
		<dc:creator>Justin M. Stoddard</dc:creator>
				<category><![CDATA[Freedom of Expression]]></category>
		<category><![CDATA[Politics]]></category>
		<category><![CDATA[Religious Freedom]]></category>
		<category><![CDATA[Rhetoric]]></category>

		<guid isPermaLink="false">http://www.thelessonapplied.com/?p=745</guid>
		<description><![CDATA[William Roper: So, now you give the Devil the benefit of law! Sir Thomas More: Yes! What would you do? Cut a great road through the law to get after the Devil? William Roper: Yes, I&#8217;d cut down every law in England to do that! Sir Thomas More: Oh? And when the last law was [...]]]></description>
			<content:encoded><![CDATA[<p><em><strong>William Roper:</strong> So, now you give the Devil the benefit of law!<br />
<strong>Sir Thomas More:</strong> Yes! What would you do? Cut a great road through the law to get after the Devil?<br />
<strong>William Roper:</strong> Yes, I&#8217;d cut down every law in England to do that!<br />
<strong>Sir Thomas More:</strong> Oh? And when the last law was down, and the Devil turned &#8217;round on you, where would you hide, Roper, the laws all being flat? This country is planted thick with laws, from coast to coast, Man&#8217;s laws, not God&#8217;s! And if you cut them down, and you&#8217;re just the man to do it, do you really think you could stand upright in the winds that would blow then? Yes, I&#8217;d give the Devil benefit of law, for my own safety&#8217;s sake!</em></p>
<p><em>—A Man for All Seasons by Robert Bolt</em></p>
</p>
<p>In 1919, Oliver Wendell Holmes proclaimed that you cannot &#8220;shout fire in a crowded theater.&#8221; The ignorant, the credulous and the cynical have been misusing that phrase ever since. The argument usually follows a well defined euphemistic process:</p>
<p>Person X says something offensive or inflammatory. Person Y denounces not person X but rather his speech by saying, &#8220;there is no such thing as free speech. You can&#8217;t shout fire in a crowded theater.&#8221; Implied is that speech is already restricted, so there&#8217;s no problem in restricting it further for whatever the reason <em>du jour</em>.</p>
<p>I&#8217;ve heard this argument from both sides of the political spectrum.</p>
<p>Here&#8217;s the thing. Justice Holmes was using the &#8216;fire in a theater&#8217; analogy to refer to speech that had no &#8220;conceivable useful purpose,&#8221; or was &#8220;extremely or inherently dangerous.&#8221; In this case, the speech in question were fliers handed out in Yiddish opposing the draft for Mr. Wilson&#8217;s war. (In case you missed it, Mr. Wilson is the great &#8220;Progressive&#8221; president that oversaw a government apparatus of which Josesph McCarthy could only dream, longingly.)</p>
<p>Is this perfectly clear? Justice Holmes, with the full weight of the judicial branch behind him, with enthusiastic support from the executive branch, ruled that any verbal or written opposition to war was of no purpose and was extremely dangerous, essentially nullifying any First Amendment rights on the issue. Many hundreds of people languished in prison for long periods of time for the &#8220;crime&#8221; of &#8220;shouting fire in a crowded theater,&#8221; and this is inevitably the problem with <a href="http://en.wikipedia.org/wiki/Argument_from_authority">arguments from authority</a> or <a href="http://en.wikipedia.org/wiki/Appeal_to_tradition">arguments from tradition</a>. They almost always lead back to Yiddish-speaking pacifists. Please remember this the next time one of your friends feels the need to use this canard in any future discussions about speech.</p>
<p>I am going to be unequivocal in what I say next. There will be no genuflection. There will be no apologies. I ask for no quarter and welcome all challengers on the subject.</p>
<p>I will stand up for and next to <a href="http://abcnews.go.com/US/pastor-terry-jones-receives-deaths-koran-burning/story?id=13289242">mentally ill, idiotic, book-burning pastors</a> with all the ignorant religiosity and disgustingly offensive things they stand for before I&#8217;ll give one nod of acknowledgment to the likes of Senators Harry Reid and Lindsey Graham (Democrat and Republican, respectively) and their pusillanimous simpering; anytime, anywhere.</p>
<p><a href="http://www.politico.com/blogs/politicolive/0411/Reid_Well_look_into_Koran_burning.html" target="_blank">When Harry Reid says</a>, &#8220;We’ll take a look at this of course &#8230; as to whether we need hearings or not, I don’t know,&#8221; I say, &#8220;It&#8217;s none of your business. It&#8217;s none of the government&#8217;s business.&#8221; Not only should Harry Reid be fundamentally embarrassed for uttering such a statement, his constituency should be incredibly alarmed.</p>
<p><a href="http://www.outsidethebeltway.com/lindsay-graham-on-koran-burning-freedom-of-speech-is-a-great-idea-but-were-in-a-war/">When Lindsey Graham says</a>, &#8220;I wish we could find a way to hold people accountable. Free speech is a great idea, but we&#8217;re at war,&#8221; my response is to ask, &#8220;when are we NOT at war?&#8221; I will also go on to say that in all of human history, nothing thoughtful or nuanced has ever been uttered after the phrase, &#8220;Free speech is a great idea, but. &#8230;&#8221;</p>
<p>Any <em>bien pensant</em> has more than a few choice words for the likes of Pastor Terry Jones and his ilk. He has expressed his First Amendment rights, as is his birthright, and we fight him in kind, with &#8230; wait for it &#8230; free speech. That&#8217;s how it works. We want people like Terry Jones and his maniacal followers in the light of day. We dare not use the force of government to censor him, for fear of driving him underground to fester, to lend him credence. That&#8217;s how it works in an enlightened, secular, civil society. When offended, we do not go around beheading people. We do not rend our clothes and beat our breasts. There are no overwrought gesticulations. We go to the public square, without hindrance of or succor from the government, and we fight it out.</p>
<p>It needs to be said. Clichéd euphemisms do not need protection. They are banal and lazy, but rarely offensive. We fight these battles at the desolate outer fringes of respectability. We do this because we understand that to censor speech is to set up a chair in the anteroom of all our minds, inviting any petty bureaucrat to have a seat. Whom do you trust to take on such a role? Senator Harry Reid? Senator Lindsey Graham? Who among your friends would you appoint the gatekeeper to your thoughts?</p>
<p>Burn a book? I would stand on the side of any person who burned every beloved word of William Faulkner if it demonstrated how serious I am about free speech. I say that with no small amount of emotion. Just the thought of it makes me tear up.</p>
<p>I do not wish to have the devil turn on me and, in turn, have no protection, all the laws of the land laid low.</p>
<p>Shame on those who think otherwise, whatever their political ideology.</p>
<p><em>[Cross-posted at <a href="http://www.shrubbloggers.com/2011/04/04/burn-this-post/">Shrubbloggers</a>.]</em></p>
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		<title>Government Is a Broker in Pillage</title>
		<link>http://www.thelessonapplied.com/2011/03/05/government-is-a-broker-in-pillag/</link>
		<comments>http://www.thelessonapplied.com/2011/03/05/government-is-a-broker-in-pillag/#comments</comments>
		<pubDate>Sat, 05 Mar 2011 22:20:01 +0000</pubDate>
		<dc:creator>Eric D. Dixon</dc:creator>
				<category><![CDATA[Economic Theory]]></category>
		<category><![CDATA[Politics]]></category>
		<category><![CDATA[Public Choice]]></category>

		<guid isPermaLink="false">http://www.thelessonapplied.com/?p=743</guid>
		<description><![CDATA[H.L. Mencken summed up public choice theory in 1936: The state—or, to make the matter more concrete, the government—consists of a gang of men exactly like you and me. They have, taking one with another, no special talent for the business of government; they have only a talent for getting and holding office. Their principal [...]]]></description>
			<content:encoded><![CDATA[<p>H.L. Mencken <a href="http://www.amazon.com/dp/0801853427">summed up public choice theory in 1936</a>:</p>
<blockquote><p>The state—or, to make the matter more concrete, the government—consists of a gang of men exactly like you and me. They have, taking one with another, no special talent for the business of government; they have only a talent for getting and holding office. Their principal device to that end is to search out groups who pant and pine for something they can&#8217;t get, and to promise to give it to them. Nine times out of ten that promise is worth nothing. The tenth time it is made good by looting A to satisfy B. In other words, government is a broker in pillage, and every election is a sort of advance auction sale of stolen goods.</p>
</blockquote>
<p>[Cross-posted at <a href="http://www.shrubbloggers.com/2011/03/05/government-is-a-broker-in-pillage/">Shrubbloggers</a>.]</p>
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		<title>Tough Luck for (Un)elected Officials, The Beast Ya See Got Fifty Eyes</title>
		<link>http://www.thelessonapplied.com/2011/02/05/tough-luck-for-unelected-officials-the-beast-ya-see-got-fifty-eyes/</link>
		<comments>http://www.thelessonapplied.com/2011/02/05/tough-luck-for-unelected-officials-the-beast-ya-see-got-fifty-eyes/#comments</comments>
		<pubDate>Sat, 05 Feb 2011 07:44:37 +0000</pubDate>
		<dc:creator>John W. Payne</dc:creator>
				<category><![CDATA[Foreign Policy]]></category>
		<category><![CDATA[Spontaneous Order]]></category>

		<guid isPermaLink="false">http://www.thelessonapplied.com/?p=738</guid>
		<description><![CDATA[I used to follow foreign policy with a passion that bordered on obsession. I&#8217;ve always been a news junkie, but, like many Americans, my focus shifted to foreign affairs after 9/11. But after about five or six years, I started drifting away from it somewhat, I think mainly because it just got too damn depressing. [...]]]></description>
			<content:encoded><![CDATA[<p>I used to follow foreign policy with a passion that bordered on  obsession. I&#8217;ve always been a news junkie, but, like many Americans, my  focus shifted to foreign affairs after 9/11. But after about five or six  years, I started drifting away from it somewhat, I think mainly because  it just got too damn depressing. However, the wave of protests that has  erupted in the Arab world over the past two months has not only  rekindled my interest in the region but also given me some hope that its  political problems are not completely intractable.</p>
<p>Perhaps the most heartening aspect of all this is that it seems to be  a legitimate groundswell of popular opposition to all the repressive  regimes from Yemen to Algeria. The most obvious historical parallel is  to the <a href="http://en.wikipedia.org/wiki/Arab_Revolt">Arab Revolt</a> against the Ottoman Turks during World War I in 1916, but that was  primarily composed of Bedouins from the Arab peninsula&#8211;not a truly  pan-Arab phenomenon. To find a similar string of uprisings across many  nations, you would have to go back to the <a href="http://en.wikipedia.org/wiki/Revolutions_of_1848">Revolutions of 1848</a> that swept almost all of Europe and spread the idea of national  self-determination far and wide. Like the protests we see today, those  revolutions were all driven by local problems and concerns, but  participants frequently drew inspiration and solidarity from the  knowledge that similar events were unfolding in neighboring countries.</p>
<p>Of course, bottom-up political change does not square with accepted  faith of partisan hacks&#8211;both Democratic and Republican&#8211;that Washington  is the prime mover in all earthly (and, in all likelihood, cosmic)  affairs. It has been amusing to watch people absurdly attribute the  millions of people gathered in Tahrir Square to <a href="http://www.examiner.com/political-buzz-in-national/a-look-back-at-president-obama-s-cairo-speech-light-of-egypt-protests-video">Obama&#8217;s speech at Cairo University in 2009</a>. Even more outlandish is the view endorsed by a few neoconservatives that recent events have somehow <a href="http://www.washingtonpost.com/wp-dyn/content/article/2011/01/28/AR2011012803144.html">vindicated George Bush&#8217;s foreign policy</a> of implementing democracy at the end of a bayonet. Left unsaid is that  part of Bush&#8217;s (and Obama&#8217;s) foreign policy was propping up dictators  like Egypt&#8217;s Hosni Mubarak with billions of dollars in foreign aid.  Moreover, I hate to break it to them, but the rest of the world does not  revolve around the United States (<a href="http://rougholboy.com/2011/02/01/a-state-of-arrogance/">and the United States does not revolve around Washington D.C.</a>),  and you can&#8217;t centrally plan and export a revolution. The protesters  have a variety of reasons for their actions, but a speech by an American  president and an eight-year-old war hundreds of miles away are probably  way down the list.</p>
<p>These revolutions are <a href="http://en.wikipedia.org/wiki/Spontaneous_order">spontaneous orders</a>&#8211;like  markets or civil society&#8211;which governments do not respond to well,  both because they frequently demonstrate how unnecessary the government  is and they lack formal hierarchies. Most people believe that without  government, society immediately turns into pandemonium, but despite the  fact that the Egyptian government has been effectively shut down, the  Egyptian people themselves are coming together to provide the services  they need. In <a href="http://www.youtube.com/watch?v=LmikSljKjYc">this video</a>, Egyptians volunteer to clean up the streets, deliver medical care, and distribute free food to demonstrators. The <em>New York Times</em> also ran a <a href="http://www.nytimes.com/2011/02/01/world/middleeast/01alexandria.html?_r=3">superb article</a> on Monday describing how regular Egyptians are keeping their society functioning even in the midst of great turmoil:</p>
<blockquote><p>Out of these humble beginnings, the Popular Committee for  the Protection  of Properties and Organization of Traffic was born.  “What we tried to  do first was protect the electricity, water, gas  —   even the  state-owned ones,” Mr. Mardini said, his voice a hoarse  whisper after  starting on the street at 8 in the morning on Sunday and  finishing at  6:30 a.m. Monday, with a two-hour nap before hitting the  road again. His  stubble is gaining on his soul patch, and if he does   not shave soon he  will have a full beard.</p>
<p>Compared with the chaos in Cairo, Alexandria has seemed relatively   orderly,  though only relatively. In some neighborhoods the only   building that has been destroyed is the police station, though there has   been looting in others. The streets are filled with volunteers.</p>
<p>“We want to show the world that we can take care of our country, and  we  are doing it without the government or police,” said Khalid Toufik,  40, a  dentist. He said that he also took shifts in his neighborhood  watch,  along with students and workers. “It doesn’t matter if one is a  Muslim  or a Christian,” he said, “we all have the same goal.”</p>
<p>[...]</p>
<p>The civic enterprise is now divided into four branches: traffic, cleanup, protection and emergency response.</p>
<p>Though others refer to him as the head of the committee, Mr. Mardini   said: “We don’t have a leader. This is our country, and we all have to   protect it.”</p></blockquote>
<p>And being leaderless is is actually one of the revolution&#8217;s great  strengths. If there was a leader or small group of leaders, Mubarak  could attempt to co-opt them with money or positions of power. In fact,  this is precisely what he is attempting to do with the army by <a href="http://www.amconmag.com/larison/2011/02/02/yes-the-egyptian-military-backs-the-egyptian-military-regime/">appointing General Omar Suleiman to the vice presidency</a>.  A government can deal with another hierarchical institution, but an  amorphous blob consisting of millions of pissed off people is utterly  confounding.</p>
<p>There is only one thing Mubarak or any other government can do to  retain power in such a situation, and it is best explained by an  Egyptian quoted in that <em>Times</em> article:</p>
<blockquote><p>“I am glad, that they [the citizen volunteers] are all on  the streets to protect us from  robbers,” said Hannan Selbi, 21, a  student. “We are sure that it’s in  the interest of the government to  create chaos.”</p></blockquote>
<p>Mubarak&#8217;s government has been exposed as malevolent and unnecessary,  so he has little choice but to create the problem he purports to solve. <a href="http://reason.com/blog/2011/01/30/looters-and-leviathan-hobbes-t">Many Egyptians are reporting</a> that when caught, looters frequently turn out to be plainclothes police  officers loyal to Mubarak. When it comes down to it, there is really  only one tool in government&#8217;s toolbox: a big fucking club, and Mubarak  is using it to spread fear and instigate violence, which he hopes will  make people submit to his rule once more.</p>
<p>The revolts in Egypt and elsewhere could still go terribly, terribly  wrong. Mubarak could weather the storm and rule the country until his  death. Or a radical Muslim faction could take power and institute a  theocracy. Or a new government could start another war with Israel.  Although I&#8217;m guardedly hopeful, I know that these things usually end in  tears. That said, what these protests have already shown Egypt, the  Middle East, and the whole world is that people do not need a strongman;  they do not need a government. Society is an organic process, and it  gets along pretty well without leaders. The lesson is there, but whether  enough people will listen remains to be seen.</p>
<p>Headline reference <a href="http://www.youtube.com/watch?v=Z78PjvfCVTQ">here</a>.</p>
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		<title>Against the Simple Scenario of Rescue</title>
		<link>http://www.thelessonapplied.com/2011/01/30/against-the-simple-scenario-of-rescue/</link>
		<comments>http://www.thelessonapplied.com/2011/01/30/against-the-simple-scenario-of-rescue/#comments</comments>
		<pubDate>Mon, 31 Jan 2011 00:03:02 +0000</pubDate>
		<dc:creator>Wirkman Virkkala</dc:creator>
				<category><![CDATA[Unintended Consequences]]></category>
		<category><![CDATA[imperialism]]></category>
		<category><![CDATA[Paul Jacob]]></category>
		<category><![CDATA[simplicity]]></category>
		<category><![CDATA[Townhall]]></category>

		<guid isPermaLink="false">http://www.thelessonapplied.com/?p=736</guid>
		<description><![CDATA[Social causation cannot be simply drawn on a line, so public policy cannot be conceived in a one-dimensional fashion. See a goal? Find a means. Stick to it. No. It doesn&#8217;t work, because each cause has more than one effect, and the selected effect, the end, is not all that must be considered. You will [...]]]></description>
			<content:encoded><![CDATA[<p>Social causation cannot be simply drawn on a line, so public policy cannot be conceived in a one-dimensional fashion. See a goal? Find a means. Stick to it.</p>
<p>No.</p>
<p>It doesn&#8217;t work, because each cause has more than one effect, and the selected effect, the end, is not all that must be considered.</p>
<p>You will often hear conservatives complain about progressives&#8217; lack of understanding in this department, how those on the left too often have a one-dimensional view<span id="more-736"></span> of problems and solutions. Is somebody poor? Tax somebody else and give the poor guy some money. It&#8217;s as simple as that!</p>
<p>Well, of course, it isn&#8217;t as simple as that. And economists have been exploring the complexity of social causation since before Adam Smith. Unfortunately, advocates of dirigisme have won the public debate, for the most part, characterizing laissez faire as &#8220;simplistic&#8221; while their own notions depend on rashly over-simplified justifications and visions of causation, while the allegedly &#8220;simple&#8221; system of liberty has, for its justification, a complex, multi-causal, massively cybernetic view of social dynamics and order.</p>
<p>But, lest we target conservatives for too much praise, it&#8217;s worth remembering that even the savviest of them reduce their ideas to the starkest simplicity when it comes to foreign policy. They see a problem elsewhere, some bad guys doing something bad to some other folks, who may or may not be good guys. The solution?<em> Send in the marines! Bomb them! Set up an &#8220;army base&#8221;!</em></p>
<p>All for Peace, of course.</p>
<p>The idea that such a course — what might be called American garrison state imperialism — might have unintended effects? Well, conservatives then regurgitate the &#8220;wisdom&#8221; of Lenin, and talk about broken eggs and the traditional cost of making omelettes.</p>
<p>In the course of writing about the current Egyptian revolt, Paul Jacob, a libertarian who often writes for conservatives, neatly challenges American imperialist simple-mindedness (see his regular weekend column on <a href="http://townhall.com/columnists/PaulJacob/2011/01/30/whos_your_dictator" target="_blank">Townhall</a>; see also his <a href="http://thisiscommonsense.com/?p=6232" target="_blank">own website</a>):</p>
<blockquote><p>Some argue that Americans must support despots to block more serious threats. They forget that freedom and democracy must continually win the hearts and minds of the world’s people. To constantly wed our foreign policy to the thumb-screw can only breed enemies from people who should be our friends. Empowering the lesser of two apparent evils in every instance means that America’s face to the world can appear most clearly as one thing: Evil.</p>
<p>Talk about the wrong message, the wrong stance.</p></blockquote>
<p>Jacob, a supporter of what he calls &#8220;citizen-powered government,&#8221; is a fairly well-known activist for term limits and the citizen initiative process. His take on democracy is not majoritarianism so much as constitutionally limited government supported by an active citizenry — that is, <em>republican</em>. In the old sense. This puts his brand of libertarianism a long way from, say, the anarcho-capitalism of Murray Rothbard . . . but not so far from the Constitutional approach of Rep. Ron Paul.</p>
<p>Or the Tea Party.</p>
<p>So I was curious to see how Townhall.com’s readers reacted to Jacob&#8217;s recent column. Townhall readers can be pretty “far right” — but I have been noticing a subtle trend, there, away from the brain-dead Rush-Limbaugh-dittoism of the past. Could it be that the Tea Party has leavened the lump of the Townhall readership?</p>
<p>The <a href="http://townhall.com/columnists/PaulJacob/2011/01/30/whos_your_dictator/page/full/" target="_blank">early comments</a>, so far, have pleasantly surprised me. Not the usual screaming legion of <em>America-über-alles</em> imperialists.</p>
<p>Though social causation in conflict still strikes neoconservatives and many others in the traditional alliance of the Republican Party as a fairly simple matter — as America’s Strong and Good, and No Match for Anyone Else — it could be that there is hope. It could be that conservative-minded folk will realize (are in the process of realizing?) what they have long suspected in the domestic sphere of life — that simple scenarios of rescue don’t cut it as policies because society is more complicated than progressives believe it is — applies also to the realm of international affairs.</p>
<p>As Paul Jacob indicated, there&#8217;s a trouble with the allegedly &#8220;sophisticated&#8221; ploy of backing dictators to fend off worse dictators: The public face you place in front of the world becomes that of supporting suppression.</p>
<p>And that is the very opposite message Americans want to send to the world. Or to each other.</p>
<p style="text-align: center;"><em>NOTE: Paul Jacob&#8217;s column is also available as a </em><a href="http://thisiscommonsense.com/pdf/TH20110130-pauljacob.pdf" target="_blank"><em>PDF</em></a><em>.</em></p>
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		<title>I, Toaster</title>
		<link>http://www.thelessonapplied.com/2011/01/15/i-toaster/</link>
		<comments>http://www.thelessonapplied.com/2011/01/15/i-toaster/#comments</comments>
		<pubDate>Sat, 15 Jan 2011 23:20:56 +0000</pubDate>
		<dc:creator>Eric D. Dixon</dc:creator>
				<category><![CDATA[Gains From Trade]]></category>
		<category><![CDATA[Technology]]></category>

		<guid isPermaLink="false">http://www.thelessonapplied.com/?p=732</guid>
		<description><![CDATA[This guy reinvents the lessons of &#8220;I, Pencil,&#8221; by trying to build a toaster from scratch: [Cross-posted at Shrubbloggers.]]]></description>
			<content:encoded><![CDATA[<p>This guy reinvents the lessons of <a href="http://www.econlib.org/library/Essays/rdPncl1.html">&#8220;I, Pencil,&#8221;</a> by trying to <a href="http://www.youtube.com/watch?v=5ODzO7Lz_pw">build a toaster from scratch</a>:</p>
<p><object width="500" height="300"><param name="movie" value="http://www.youtube.com/v/5ODzO7Lz_pw?fs=1&amp;hl=en_US"></param><param name="allowFullScreen" value="true"></param><param name="allowscriptaccess" value="always"></param><embed src="http://www.youtube.com/v/5ODzO7Lz_pw?fs=1&amp;hl=en_US" type="application/x-shockwave-flash" allowscriptaccess="always" allowfullscreen="true" width="500" height="300"></embed></object></p>
<p>[Cross-posted at <a href="http://www.shrubbloggers.com/2011/01/15/i-toaster/">Shrubbloggers</a>.]</p>
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		<title>What’s the Biggest Problem for Blacks in America?</title>
		<link>http://www.thelessonapplied.com/2011/01/04/what%e2%80%99s-the-biggest-problem-for-blacks-in-america/</link>
		<comments>http://www.thelessonapplied.com/2011/01/04/what%e2%80%99s-the-biggest-problem-for-blacks-in-america/#comments</comments>
		<pubDate>Tue, 04 Jan 2011 07:37:59 +0000</pubDate>
		<dc:creator>John W. Payne</dc:creator>
				<category><![CDATA[Drug Policy]]></category>
		<category><![CDATA[Law Enforcement]]></category>
		<category><![CDATA[Nanny State]]></category>

		<guid isPermaLink="false">http://www.thelessonapplied.com/?p=730</guid>
		<description><![CDATA[Linguist John McWhorter argues that it’s the drug war, and I’m inclined to agree: …[W]ith no War on Drugs there would be, within one generation, no “black problem” in the United States. Poverty in general, yes. An education problem in general—probably. But the idea that black America had a particular crisis would rapidly become history, [...]]]></description>
			<content:encoded><![CDATA[<p>Linguist John McWhorter <a href="http://www.tnr.com/blog/80669/getting-darnell-the-corners-why-america-should-ride-the-anti-drug-war-wave">argues</a> that it’s the drug war, and I’m inclined to agree:</p>
<blockquote><p>…[W]ith no War on Drugs there would be, within one  generation, no  “black problem” in the United States. Poverty in  general, yes. An  education problem in general—probably. But the idea that <em>black</em> America had a particular crisis would rapidly become history, requiring   explanation to young people. The end of the War on Drugs is, in fact,   what all people genuinely concerned with black uplift should be focused   on, which is why I am devoting my last TNR post of 2010 to the issue.   The black malaise in the U.S. is currently like a card house; the Drug   War is a single card which, if pulled out, would collapse the whole   thing.</p>
<p>That is neither an exaggeration nor an oversimplification. It  comes  down to this: If there were no way to sell drugs on the street at a   markup, then young black men who drift into this route would instead   have to get legal work. They would. Those insisting that they would not   have about as much faith in human persistence and ingenuity as those  who  thought women past their five-year welfare cap would wind up  freezing  on sidewalk grates.</p>
<p>There would be a new black community in which all able-bodied men had legal work even in less well-off communities—i.e.   what even poor black America was like before the ’70s; this is no   fantasy. Those who say that this could only happen with low-skill   factory jobs available a bus ride away from all black neighborhoods   would be, again, wrong. That explanation for black poverty is <a href="http://www.amazon.com/Winning-Race-Beyond-Crisis-America/dp/B001G8WPP8/ref=sr_1_1?s=books&amp;ie=UTF8&amp;qid=1293805855&amp;sr=1-1">full of holes</a>.   Too many people of all colors of modest education manage to get by   without taking a time machine to the 1940s, and after the War on Drugs   black men would be no exception.</p>
<p>And in this new black community, young black men, much less  likely  to wind up in prison cells or caskets, would be a constant  presence—and  thus stay in the lives of their  children. The black male community  would no longer include a massive  segment of underskilled,  drug-addicted ex-cons <a href="http://www.manhattan-institute.org/html/miarticle.htm?id=2857">churning in and out by the thousands</a> year after year, and thus black boys growing up in these communities   would not see this life as a norm. They would grow up to get jobs,   period.</p>
<p>And something else these boys would not grow up with is a <a href="http://www.nysun.com/opinion/guidelines-leading-nowhere/68038/">bone-deep sense of the police—and thus whites—as an enemy</a>. Because there would be no reason for the police to prowl through his neighborhood.</p></blockquote>
<p>That’s from McWhorter’s latest piece in <em>The New Republic</em>, and the <a href="http://www.tnr.com/blog/80669/getting-darnell-the-corners-why-america-should-ride-the-anti-drug-war-wave">whole thing</a> is well worth reading. It should come as little surprise that policies  created and implemented as a cudgel against minorities have  disproportionately harmed them, and it’s long overdue that Americans  admit to themselves that the drug war has never been about public health  or safety but about persecuting cultural groups that middle class  whites didn’t care for.</p>
<p>Cross-posted at <a href="http://rougholboy.com/2011/01/04/whats-the-biggest-problem-for-blacks-in-america/">Rough Ol&#8217; Boy</a>.</p>
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		<title>The Beginning of the End</title>
		<link>http://www.thelessonapplied.com/2010/12/08/the-beginning-of-the-end/</link>
		<comments>http://www.thelessonapplied.com/2010/12/08/the-beginning-of-the-end/#comments</comments>
		<pubDate>Thu, 09 Dec 2010 05:30:11 +0000</pubDate>
		<dc:creator>John W. Payne</dc:creator>
				<category><![CDATA[Economic Theory]]></category>
		<category><![CDATA[Internet]]></category>
		<category><![CDATA[Politics]]></category>

		<guid isPermaLink="false">http://www.thelessonapplied.com/?p=727</guid>
		<description><![CDATA[WikiLeaks founder Julian Assange turned himself over to British authorities, but it actually makes little difference what happens to Assange personally at this point–his victory is already assured. Assange’s situation reminds me of what Obi Wan Kenobi tells Darth Vader in Star Wars: “if you strike me down now, I will become more powerful than [...]]]></description>
			<content:encoded><![CDATA[<p>WikiLeaks founder Julian Assange turned himself over to British  authorities, but it actually makes little difference what happens to  Assange personally at this point–his victory is already assured.  Assange’s situation reminds me of what Obi Wan Kenobi tells Darth Vader  in <em>Star Wars</em>: “if you strike me down now, I will become more  powerful than you can possibly imagine.” Assange and WikiLeaks are the  first to disrupt the monopoly information systems of world governments  and powerful corporations in a major way, but they will be far from the  last, and I don’t think most people fully understand the implications of  this.</p>
<p>One person who seems to have a rough grasp on what WikiLeaks means in  the long run is legendary New Leftist Todd Gitlin. Writing in <a href="http://www.tnr.com/blog/foreign-policy/79678/data-isnt-everything-wikileaks-julian-assange-daniel-ellsberg"><em>The New Republic</em></a>, Gitlin compares Assange unfavorably to Daniel Ellsberg, famous for leaking <em>The Pentagon Papers</em> during the Vietnam War, because Assange is seeking to cause  “system-wide cognitive decline” in the government, and Gitlin  understands what that means:</p>
<blockquote><p>To value “system-wide cognitive decline” is to insist  that the state is  illegitimate. It should not be pressed to do better  what it already does  poorly. It should not be smarter. Assange says it  should not <em>be</em>.</p></blockquote>
<p>Gitlin clearly disagrees with Assange’s almost wholly negative view  of the state, but what I don’t think even Gitlin understands is that  this is ultimately not about ideology or value judgments anymore. As  information becomes easier to disseminate, secrets will become harder to  keep, and it doesn’t matter whether Assange is free or imprisoned,  alive or dead, <em>someone</em> will leak information to the public, and  the government’s ability to communicate will be further eroded. In  short, system-wide cognitive decline will continue apace.</p>
<p>Assange certainly seems to understand what he’s doing, and zunguzungu offers the <a href="http://zunguzungu.wordpress.com/2010/11/29/julian-assange-and-the-computer-conspiracy-%E2%80%9Cto-destroy-this-invisible-government%E2%80%9D/">best summary</a> of Assange’s apparent strategy to undermine the conspiracies that call themselves governments:</p>
<blockquote><p>The leak, in other words, is only the catalyst for the  desired  counter-overreaction; Wikileaks wants to provoke the conspiracy  into  turning off its own brain in response to the threat. As it tries  to plug  its own holes and find the leakers, he reasons, its component  elements  will de-synchronize from and turn against each other, de-link  from the  central processing network, and come undone. Even if all the  elements of  the conspiracy still <em>exist</em>, in this sense,  depriving  themselves of a vigorous flow of information to connect them  all  together as a conspiracy prevents them from <em>acting </em>as a conspiracy. As he puts it:</p>
<p>“If total conspiratorial power is zero, then clearly there  is no  information flow between the conspirators and hence no  conspiracy. A  substantial increase or decrease in total conspiratorial  power almost  always means what we expect it to mean; an increase or  decrease in the  ability of the conspiracy to think, act and adapt…An  authoritarian  conspiracy that cannot think is powerless to preserve  itself against  the opponents it induces.”</p>
<p>In this sense, most of the media commentary on the latest round of leaks has totally missed the point. After all, why are <em>diplomatic cables </em>being   leaked? These leaks are not specifically about the war(s) at all, and   most seem to simply be a broad swath of the everyday normal secrets  that  a security state keeps from all but its most trusted hundreds of   thousands of people who have the right clearance. Which is the point:   Assange is completely right that our government has conspiratorial   functions. What else would you call the fact that a small percentage of   our governing class governs and acts in our name according to   information which is freely shared amongst them but which cannot be   shared amongst their constituency? And we all probably knew that this   was more or less the case; anyone who was surprised that our embassies   are doing dirty, secretive, and disingenuous political work as a matter   of course is naïve. But Assange is not trying to produce a journalistic   scandal which will then provoke red-faced government reforms or   something, precisely because no one is all that scandalized by such   things any more. Instead, he is trying to strangle the links that make   the conspiracy possible, to expose the necessary porousness of the   American state’s conspiratorial network in hopes that the security state   will then try to shrink its computational network in response, thereby   making itself dumber and slower and smaller.</p></blockquote>
<p>(That’s an important excerpt, but, seriously, do yourself a favor and go read the <a href="http://zunguzungu.wordpress.com/2010/11/29/julian-assange-and-the-computer-conspiracy-%E2%80%9Cto-destroy-this-invisible-government%E2%80%9D/">whole thing</a>. The rest of this post will still be here when you get back, I promise.)</p>
<p>The politicians seem to be dimly aware of the threat an open flow of  information poses to them and their power, but the only means they have  of striking back is killing the messenger, literally, but they can’t  fight the future. As a side note, if you believe that the politicians  like Joseph Lieberman and John McCain who have called for Assange’s head  are doing so because they believe it will help the average American or  anyone but themselves, you are deeply deluded. <a href="http://blogs.houstonpress.com/hairballs/2010/12/wikileaks_texas_company_helped.php">One of the new WikiLeaks cables</a> reveals that DynCorp, a Texas-based company, has been using taxpayer  dollars to buy child sex slaves for powerful Afghan men. No federal  politicians have called for investigations into DynCorp, and I almost  guarantee that they won’t. They don’t care that tax money is spent to  subsidize child rape; they only care that the public found out about it.  And that’s why they must try to silence Assange, because he reveals the  government as the callous, incompetent organization that it is.</p>
<p>What Assange is ushering in is nothing short of the death spiral of  the nation-state. Nation-states are masters of centralization, and they  thrived in an industrial era when centralization seemed to be the most  efficient means of administration–both in political and business  affairs. However, in an era based upon information, decentralization is a  far more powerful method for generating and using important data, for  reasons explained by Nobel Prize winning economist F.A. Hayek in <a href="http://www.econlib.org/library/Essays/hykKnw1.html">“The Use of Knowledge in Society”</a> over 65 years ago. Once the government’s monopoly on its own  information is cracked by Assange and others, the need and likely even  the desire for its centralized bureaucracy vanishes.</p>
<p>I don’t pretend to know what will replace the nation-state as an  agent of administration, military power, diplomatic relations, etc. As a  libertarian, I hope it’s some kind of <a href="http://en.wikipedia.org/wiki/Polycentric_law">polycentric government</a> or competing agencies, but that’s far from guaranteed. Despite fighting  my entire adult life against the nation-state, I concede that an even  worse system could arise from its ashes. However, I am confident that  the central mode of governance in the Western World for over two  centuries is now on the wane and will begin to disappear over the next  thirty to fifty years. Good riddance.</p>
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		<title>All Your Property Are Belong to Us</title>
		<link>http://www.thelessonapplied.com/2010/11/17/all-your-property-are-belong-to-us/</link>
		<comments>http://www.thelessonapplied.com/2010/11/17/all-your-property-are-belong-to-us/#comments</comments>
		<pubDate>Wed, 17 Nov 2010 19:31:31 +0000</pubDate>
		<dc:creator>John W. Payne</dc:creator>
				<category><![CDATA[Drug Policy]]></category>
		<category><![CDATA[Law Enforcement]]></category>
		<category><![CDATA[Property Rights]]></category>

		<guid isPermaLink="false">http://www.thelessonapplied.com/?p=723</guid>
		<description><![CDATA[The Drug Enforcement Agency (DEA) and the Missouri Highway Patrol are attempting to seize a large tract of land in central Missouri known as Camp Zoe. The land is owned by Jimmy Tebeau, front man for The Schwag, the band that gives name to the Schwagstock festivals held on the property several times a year. [...]]]></description>
			<content:encoded><![CDATA[<p>The Drug Enforcement Agency (DEA) and the Missouri Highway Patrol are <a href="http://blogs.riverfronttimes.com/atoz/2010/11/camp_zoe_site_of_schwagstock_f.php">attempting to seize a large tract of land</a> in central Missouri known as Camp Zoe. The land is owned by Jimmy Tebeau, front man for <a href="http://en.wikipedia.org/wiki/Schwagstock#Band_history">The Schwag</a>, the band that gives name to the Schwagstock festivals held on the property several times a year. The DEA and highway patrol allege that Tebeau knowingly allowed people to sell drugs on the property, but Tebeau has not been charged with any crime. Such charges are not necessary, however, because under the rules of civil asset forfeiture, it is the property — not the person, who has all sorts of troublesome rights — that is charged with the crime.</p>
<p>This procedure is rooted in medieval superstition — essentially, <a href="http://www.arizonalawreview.org/ALR2009/VOL513/Moores.pdf">people believed that property used to commit a crime was haunted</a> — and it biases the outcome in the government’s favor in a number of ways. First and foremost, in a civil case the government can win with a preponderance of the evidence as opposed to the much higher burden of a reasonable doubt necessary to convict a person of a crime. Also, because there is no person on trial, the owner has no Fifth Amendment right against self-incrimination, and anything he says could be used later if criminal charges are ever brought.</p>
<p>Under Missouri state law, this seizure would be impossible because Missouri requires the owner to be convicted of a related felony before the property can be forfeited to the state. The feds are involved, though, so that minor detail becomes unnecessary. The Missouri Highway Patrol also stands to profit handsomely from pursuing forfeiture at the federal level instead of the state level, should they be successful. That’s because under the rules of equitable sharing, the federal agency will kick back up to 80 percent of the proceeds from the forfeiture, which — assuming Zoe sold at its $600,000 assessed value — would give the highway patrol up to $480,000. Property forfeited through Missouri state law must be given to a state fund for school construction in order to eliminate any incentive for police to enrich themselves by confiscating property, but the federal government has given them an easy way of working around the obvious intent of state forfeiture reforms.</p>
<p>The police allege that Tebeau knowingly allowed people to sell drugs at Camp Zoe. That&#8217;s a difficult allegation to prove, because unless they have proof that he was involved in dealing drugs — which seems doubtful, considering the lack of a criminal charge — it would require knowing his mental states. However, according to the official statements of the DEA and the Highway Patrol, the law enforcement agents deliberately allowed and contributed to the sale of drugs on the property. This highlights a contradiction in law enforcement goals caused by asset forfeiture. It seems that the police were pursuing the property <a href="http://www.sciencedirect.com/science?_ob=ArticleURL&amp;_udi=B6V75-42Y63T2-1&amp;_user=10&amp;_coverDate=06/30/2001&amp;_rdoc=1&amp;_fmt=high&amp;_orig=search&amp;_origin=search&amp;_sort=d&amp;_docanchor=&amp;view=c&amp;_searchStrId=1543406622&amp;_rerunOrigin=google&amp;_acct=C000050221&amp;_version=1&amp;_urlVersion=0&amp;_userid=10&amp;md5=660c6030be0cc1f0d34931e355bc4ba4&amp;searchtype=a">instead of trying to prevent crimes</a>. Undercover agents buying drugs could have arrested any dealers that sold to them on the property and made a show of it to deter other people from doing the same, but instead they chose to pursue a forfeiture case, in which they stand to gain over half a million dollars, by allowing people to sell drugs for four years.</p>
<p>Finally, I wonder how much property the feds could seize under the rationale that drugs are sold there by visitors. I think we can safely include every venue ever played by the Grateful Dead, Widespread Panic, the Flaming Lips, Government Mule, Phish, and Moe, among others. Furthermore, even land already owned by the federal government would not seem to be immune. Rainbow gatherings are held regularly on national forest land, and the Black Rock Desert where Burning Man is held is federal property. I don’t think anyone can credibly claim that the government doesn’t know what sorts of illicit activities can occur at these events. Simply put, if these are the legal standards, massive amounts of private property are subject to seizure anytime the DEA, or another federal regulatory agency, decides to investigate.</p>
<p>(<a href="http://en.wikipedia.org/wiki/All_your_base_are_belong_to_us">Headline reference here</a> for any of you who don&#8217;t remember the early 2000s.)</p>
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		<title>Protecting Us to Death</title>
		<link>http://www.thelessonapplied.com/2010/11/16/protecting-us-to-death/</link>
		<comments>http://www.thelessonapplied.com/2010/11/16/protecting-us-to-death/#comments</comments>
		<pubDate>Tue, 16 Nov 2010 05:51:26 +0000</pubDate>
		<dc:creator>John W. Payne</dc:creator>
				<category><![CDATA[Unintended Consequences]]></category>

		<guid isPermaLink="false">http://www.thelessonapplied.com/?p=721</guid>
		<description><![CDATA[Many people are complaining bitterly (and rightly, in my opinion) about the new airport body scanners that show TSA screeners the naked bodies of every passenger that goes through them. If you refuse to go through the scanner, the TSA helpfully provides you the alternative of being felt up by a complete stranger. Some people [...]]]></description>
			<content:encoded><![CDATA[<p>Many people are complaining bitterly (and rightly, in my opinion)  about the new airport body scanners that show TSA screeners the naked  bodies of every passenger that goes through them. If you refuse to go  through the scanner, the TSA helpfully provides you the alternative of  being felt up by a complete stranger. Some people are even pledging not  to fly as long as the scanners are in use. Internet polls are obviously  not scientific, but 96% of respondents to <a href="http://blogs.reuters.com/ask/2010/11/12/are-new-security-screenings-affecting-your-decision-to-fly/">this Reuters poll</a> say that they are less likely to fly because of the new, invasive  procedures. Of course, it’s a lot easier to say you aren’t going to fly  than to actually do it, but I think it’s safe to assume that at the  margin, the scanners will push people to drive instead of fly (or simply  not travel at all), and this means that the scanners might cause more  deaths than they prevent.</p>
<p>It’s debatable whether the scanners will even help prevent terrorism.  Security expert Bruce Schneier <a href="http://www.schneier.com/blog/archives/2009/05/me_on_full-body.html">points out</a> that terrorists can simply switch targets to public locations that  don’t have scanners like malls, stadiums, trains, etc. Furthermore, the  scanners don’t always catch dangerous items such as when <a href="http://www.americablog.com/2010/01/german-tv-highlights-failings-of-body.html">this physicist showed how to sneak bomb components past the devices</a>.  But even if the scanners do save some lives through thwarting would-be  terrorists, if more people choose to drive than fly, there will be more  traffic deaths as a result of the new policies. In 2003, <em>The American Scientist</em> <a href="http://www.americanscientist.org/issues/pub/flying-and-driving-after-the-september-11-attacks/2">estimated</a> that driving is 65 times riskier than flying the same distance. By  making flying intolerable in the name of safety, the government is not  only invading people’s privacy, they are making us less safe.</p>
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		<title>The Show-Me State Needs More Snooki*</title>
		<link>http://www.thelessonapplied.com/2010/11/09/the-show-me-state-needs-more-snooki/</link>
		<comments>http://www.thelessonapplied.com/2010/11/09/the-show-me-state-needs-more-snooki/#comments</comments>
		<pubDate>Tue, 09 Nov 2010 23:32:14 +0000</pubDate>
		<dc:creator>Christine Harbin</dc:creator>
				<category><![CDATA[Culture]]></category>
		<category><![CDATA[Government Spending]]></category>
		<category><![CDATA[Politics]]></category>
		<category><![CDATA[Taxes]]></category>

		<guid isPermaLink="false">http://www.thelessonapplied.com/?p=707</guid>
		<description><![CDATA[A Saint Louis production company is planning to focus on reality television series, and it is looking into tapping the Missouri film tax credit program to do it. According to an article in the St. Louis Business Journal: Coolfire Media, the St. Louis production and design studio behind Budweiser, Maybelline and Verizon Wireless ads, has [...]]]></description>
			<content:encoded><![CDATA[<p>A Saint Louis production company is planning to focus on reality television series, and it is looking into tapping the Missouri film tax credit program to do it. According to <a href="http://www.bizjournals.com/stlouis/print-edition/2010/11/05/coolfire-adds-tv-shows-to-lineup.html">an article in the <em>St. Louis Business Journal</em></a>:</p>
<blockquote><p>Coolfire Media, the St. Louis production and design studio behind Budweiser, Maybelline and Verizon Wireless ads, has spun off a separate company to develop ideas for reality TV shows and scripted comedies.</p>
<p>The minds behind Coolfire Originals say they will specialize in offering Midwest storylines, characters and actors as a niche — and a cheaper alternative — in a world of coast-centric programs. [...]</p>
<p>Coolfire Originals hopes to tap into some of the $3.5 million in Missouri tax credits still available this year for the TV and film industry and the $4.5 million in state tax credits available next year, Breitbach said.</p></blockquote>
<p>First, there is a fiscal problem. <a href="http://missouri.watchdog.org/6849/missouri-revenue-down-1-billion-since-2000/">The state government in Missouri is facing historically low revenues</a>, and has to make cuts to services that are arguably more important than reality television — such as education and public safety.</p>
<p>Second, there is a fundamental problem: This program diffuses the cost of reality television production onto the taxpaying population, and concentrates the benefits on reality television producers. Missourians will pay a marginally higher amount of taxes as a direct consequence of this policy.</p>
<p>I have many questions. Will Brett Michaels ever find love, and will he find it in Missouri? How much money in state incentives will it take for the <a href="http://en.wikipedia.org/wiki/Rock_of_Love_Bus">&#8220;Rock of Love&#8221; bus</a> to park in the Central West End of Saint Louis?</p>
<p>Additionally, what is the economic multiplier on reality television production? I know that contestants on dating shows like &#8220;The Bachelor&#8221; and the &#8220;The Bachelorette&#8221; purchase a considerable number of restaurant meals, so I suspect that it may be high. Similarly, if Kate brought her gaggle of Gosselins to Missouri, she&#8217;d probably buy a lot of diapers and children&#8217;s clothes in state.</p>
<p>Coupled with a lower marginal tax rate on income relative to other states, will this policy incite reality television stars to move to Missouri? Perhaps Snooki would consider moving to Missouri because the top marginal state income tax rate in New Jersey is 8.97 percent, whereas it is only 6.0 percent in Missouri.</p>
<p>Could a producer receive tax credits for making a reality television show about an activity that is also financed by state tax credits? Perhaps &#8221;Extreme Home Makeover: NorthSide Saint Louis&#8221; could feature <a href="http://www.showmeinstitute.org/publication/id.240/pub_detail.asp">a large private development that uses tax credits</a> for historic preservation, low-income housing development, and/or brownfield remediation.</p>
<p>For the purpose of this post, I tried to brainstorm a list of titles of Missouri-specific reality shows that the state could subsidize with its film tax credit program. I encourage our blog readers to leave additional ideas for titles the comments section of this post.</p>
<ul>
<li>Who Wants to Marry a Missourian?</li>
<li>Mississippi Shore</li>
<li>The Hill**</li>
<li>Pimp My <a href="http://www.showmedaily.org/2010/02/tax-seaduction.html">Tax-Exempt Yacht</a></li>
<li>The Real World: Chillicothe, Mo.</li>
<li>The Real Housewives of Osage County</li>
<li>Grundy County&#8217;s Got Talent</li>
<li>Top Chef: Kansas City Barbecue</li>
<li>Iron County Chef</li>
<li>Are You Smarter than a Saint Louis Public School Fifth Grader?</li>
<li>East Saint Louis High School Musical</li>
<li>I&#8217;m in the Missouri Bootheel, Get me Out of Here!</li>
<li>Poplar Bluff&#8217;s Next Top Model</li>
<li>Survivor: Lake of the Ozarks Party Cove***</li>
<li>Branson Idol</li>
</ul>
<p>* <a href="http://twitter.com/#!/ConanObrien/status/27044645582">Title reference here.</a></p>
<p>** A reality show that follows the personal lives of several Italian-American young adults living in <a href="http://en.wikipedia.org/wiki/The_Hill,_St._Louis">the Hill</a> neighborhood of Saint Louis.</p>
<p>*** David Stokes tells me that a reality show about the Lake of the Ozarks&#8217; Party Cove would make the stars of Jersey Shore look like participants in the <a href="http://en.wikipedia.org/wiki/Algonquin_Round_Table">Algonquin Round Table</a>, and I concur.</p>
<p><em><a href="http://amateurphilosophy.wordpress.com/2010/11/09/the-show-me-state-needs-more-snooki">[Cross-posted at Amateur Philosophy.]</a></em></p>
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		<title>Legalize Federalism</title>
		<link>http://www.thelessonapplied.com/2010/11/09/legalize-federalism/</link>
		<comments>http://www.thelessonapplied.com/2010/11/09/legalize-federalism/#comments</comments>
		<pubDate>Tue, 09 Nov 2010 06:57:04 +0000</pubDate>
		<dc:creator>John W. Payne</dc:creator>
				<category><![CDATA[Drug Policy]]></category>
		<category><![CDATA[Federalism]]></category>
		<category><![CDATA[Politics]]></category>

		<guid isPermaLink="false">http://www.thelessonapplied.com/?p=705</guid>
		<description><![CDATA[The most disappointing outcome from last Tuesday’s election was the failure of Proposition 19 in California, which would have legalized marijuana in the state. Admittedly, the proposition was flawed. Legalization proponent and Harvard economics professor Jeffrey Miron argues that a provision that would have prevented employers from firing or disciplining employees for marijuana use unless [...]]]></description>
			<content:encoded><![CDATA[<p>The most disappointing outcome from last Tuesday’s election was the  failure of Proposition 19 in California, which would have legalized  marijuana in the state. Admittedly, the proposition was flawed.  Legalization proponent and Harvard economics professor Jeffrey Miron <a href="http://articles.cnn.com/2010-11-03/opinion/miron.pot.vote_1_marijuana-legal-limbo-supporters?_s=PM:OPINION">argues</a> that a provision that would have prevented employers from firing or  disciplining employees for marijuana use unless it “actually impairs job  performance”  frightened voters with the idea of a half baked labor  force (like it isn’t already), and the failure to define how marijuana  would be taxed left a fog of uncertainty hanging over the proposition.  Furthermore, Attorney General Eric Holder’s announcement that the  federal government would continue to enforce federal anti-marijuana laws  likely gave many voters the mistaken impression that a Prop 19 victory  would not change anything. That (mostly empty) threat just a few weeks  prior to the election tracks pretty closely to when the polls turned  against legalizing marijuana, and I think it was probably a decisive  factor in Prop 19′s demise.</p>
<p>This debacle highlights the need for greater federalism in our  political system. If the feds have to sign off on every state law, the  drug war will continue forever because Lord knows there are only a  handful of politicians at the federal level of either party willing to  challenge the status quo. And, for many liberals, that’s just fine.</p>
<p>Take blogger Josh Marshall, for example. Marshall <a href="http://www.talkingpointsmemo.com/archives/2010/11/what_happened_to_prop_19.php">writes</a> that he would have voted against the measure for two reasons: 1)  Because he’s over 40 (translation: he doesn’t smoke anymore, and his  friends who do are professionals who don’t have to worry much about  arrest) and 2) because “unless I’m missing something, it amounts to  nullification.”</p>
<p>Marshall <em>is</em> missing something because if Prop 19 amounted to  nullification it would have demanded that state officials prevent  federal law enforcement from enforcing federal laws. The proposition did  no such thing; it simply would have removed <em>state</em> penalties  for marijuana and left the DEA to try and enforce federal law as best  they could. Regardless, Marshall’s centralist mindset reveals something  very disturbing about many modern American liberals: they’d rather have a  federal government of nearly unlimited powers rather than one with a  defined and limited role, even when, by their own admission, the federal  government’s policies harm millions of Americans.</p>
<p>Shortly after Kentucky Senator-elect Rand Paul won the Republican primary back in May, <a href="http://www.washingtonpost.com/wp-dyn/content/article/2010/05/20/AR2010052003500.html">he made a controversial remark</a> about the 1964 Civil Rights Act, essentially saying that the federal  government should not prohibit private businesses from engaging in  racial discrimination. This was almost immediately followed by a  firestorm of liberal criticism that charged Paul with trying to thrust  the country back to the Jim Crow South. I’m not interested in defending  Paul’s statement at the moment, but I think it’s fair to say that even  if that portion of the Civil Rights Act were repealed tomorrow, only a  tiny fraction of businesses would attempt to return to racial  segregation, and they would almost certainly be subjected to boycotts,  protests, and all manner of bad press–and rightfully so.</p>
<p>There are, however, a set of policies known as the drug war, which serve to put literally millions of minorities <em>in cages</em> and turn inner cities into war zones. The best hope to challenge those  policies is at the state level with reforms like Prop 19, but many  liberal pundits seem more interested in preserving the overwhelming  power of the federal government to enact countless utopian schemes than  in ending this <a href="http://motherjones.com/politics/2010/03/new-jim-crow-war-on-drugs">new Jim Crow</a>.</p>
<p>There may have been a time when federal action was the only remedy  for the horrors of segregation, but that danger is by and large in the  past. Now the federal government is far more likely to imprison a young  black man than to protect his right to vote from the Klan. If we want to  destroy the system that is oppressing people in the here and now, we  have to abandon the idea that the federal government is the primary  protector of our rights, for it is the most powerful enemy any of us  could ever know.</p>
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