Category Archive 'Economics'
04 Nov 2021
A global coalition of financial institutions announced Wednesday that more than 450 firms controlling $130 trillion in assets have committed to shifting the global economy to cleaner energy. On Day 3 of the United Nations’ COP26 climate summit, the Glasgow Financial Alliance for Net Zero said these banks, investors, and insurers have vowed that the companies and projects they invest in will reach net-zero emissions by 2050. This will mean “every financial decision takes climate change into account,” said former Bank of England chief Mark Carney, who leads the coalition with billionaire former New York Mayor Michael Bloomberg.
This, of course, represents nothing but an enormous economic distortion and malallocation of capital on the basis of junk science catastrophist superstition. This will be a staggering-scale tax on the economies of the trans-Atlantic democracies which will very significantly reduce growth and cause the standard of living of the unfortunate citizens of all these participating countries in future to be far lower than otherwise might have been the case. Stupidity, bad leadership, and bad ideas exact a terrible cost on societies.
If we all had the tax rates, the monetary policies, and the kind of sensible leadership that Britain and the United States had in the late Victorian — eariy Edwardian eras, we’d already have those flying cars and have been vacationing on Mars long since.
10 May 2021
Henry Grabar addresses a question currently puzzling Americans.
On the demand side, the lumber issue is relatively straightforward: Americans are flush. Interest rates are low. Wealthier households are buying pandemic-proof second homes or diving into long-awaited renovations. Younger families are trying to buy starter homes and settle down. Many multifamily builders have turned to timber as well, which is now commonly used to frame five- or six-story buildings. All that has created enormous demand for wood.
But the case of lumber supply is a little more perplexing. True, shipments from Canadian forests, which contribute about one-third of U.S. lumber consumption, have been constrained by tariffs, beetle infestations, and wildfires. But there is plenty of wood on both sides of the border, and fast-growing pine in the U.S. South is actually cheaper than it’s been in two decades. …
Instead, the culprit is the decade of instability and low prices that followed the Great Recession, when America stopped building homes, leaving the lumber trade out to dry. The stunted recovery stripped the industry’s crucial middlemen—the mills themselves—to the bone. Building a new deck is expensive now because mills can’t ramp up to meet the demand surge—or won’t, nervous they’ll get caught with millions in underused machinery when prices crash back to earth.
HT: Karen L. Myers.
18 Jul 2019
Brett Stevens points out that the Administrative State adds an awful lot of costs.
Take a detour now to a grocery store. For sake of argument, let us say that you are buying a single lime. Maybe you need a mid-day margarita after all of this government drama; maybe you are seasoning fajitas. Either way, you just need to pick up a lime.
It costs $0.79 for a single lime. This is for a fruit that grows on trees even within your region, which in theory should be harvested by cheap illegal alien labor, and delivered with our ultra-efficient transportation system. Why is is so expensive?
The following approximate estimates tell you approximately where your $0.79 is going:
Sales tax (6.25%). Since this is a food item, you do not pay sales tax, but if it were anything else, you would pay an additional six cents. This would go to your local tax authority, of which four cents would go to the schools which have decided that they must admit illegal aliens, offer psychological care, have police officers on staff, have speech therapists, and add many more administrators to cover paperwork arising mostly from court cases which cause schools to handle students carefully.
Taxes passed along (20%). The businesses which grow, transport, resell, and ultimately sell these fruits all pay taxes. They calculate those taxes into the cost of every item. This includes gasoline and road taxes, property tax, and income tax.
Insurance (5%). Lawsuits take up a lot of money, and it costs about $250k just to defend against one, and much more to take the case to its conclusion. Every lawsuit payout gets added on to what insurance charges businesses, and they pass it on to you.
Regulations (10%). Voters love regulations. â€œWell, itâ€™s in the law then, and thatâ€™s that!â€ Each regulation written creates bureaucrats on the government side, and in every business that has to deal with them. Their salaries get passed onâ€¦ to you.
Affirmative action (20%). Companies get sued when they do not have enough sexual, religious, and ethnic minorities hired. Government can in fact seize the company. As a result, they hire lots of these people, mainly because any time you hire someone for what they are instead of their abilities, you get incompetents, so you have to double- or triple-staff each position.
All of these costs, created by government and its machinations, get socked to you at the end of the day. Now think about the total cost per shopping trip, times number of shopping trips per year. Think about how everything â€” mortgage, healthcare, internet, car â€” includes similar cost breakdowns.
Then add the taxes you pay: property, sales, income, and the various hidden taxes like registration fees, licensing, and fines.
Where does all this money go? Government becomes an industry if allowed because it is external to society, managing society as a means to an end, which is a combination of government and whatever ideology powers it.
Our economy has become contorted by government, which is now one of its largest industries, if you add up both direct and indirect costs like bureaucrats, consultants, lawyers, and politicians.
22 May 2018
The big think piece of the week is this exercise in class navel-gazing in the Atlantic. Its author, Matthew Stewart, is an obviously Very Smart Guy, who went to Princeton and Oxford and who’s written books on the American Revolution’s foundation in Philosophy and on why Management Consulting is typically a scam.
Iâ€™ve joined a new aristocracy now, even if we still call ourselves meritocratic winners. If you are a typical reader of The Atlantic, you may well be a member too. (And if youâ€™re not a member, my hope is that you will find the story of this new class even more interestingâ€”if also more alarming.) To be sure, there is a lot to admire about my new group, which Iâ€™ll callâ€”for reasons youâ€™ll soon seeâ€”the 9.9 percent. Weâ€™ve dropped the old dress codes, put our faith in facts, and are (somewhat) more varied in skin tone and ethnicity. People like me, who have waning memories of life in an earlier ruling caste, are the exception, not the rule.
By any sociological or financial measure, itâ€™s good to be us. Itâ€™s even better to be our kids. In our health, family life, friendship networks, and level of education, not to mention money, we are crushing the competition below. But we do have a blind spot, and it is located right in the center of the mirror: We seem to be the last to notice just how rapidly weâ€™ve morphed, or what weâ€™ve morphed into.
The meritocratic class has mastered the old trick of consolidating wealth and passing privilege along at the expense of other peopleâ€™s children. We are not innocent bystanders to the growing concentration of wealth in our time. We are the principal accomplices in a process that is slowly strangling the economy, destabilizing American politics, and eroding democracy. Our delusions of merit now prevent us from recognizing the nature of the problem that our emergence as a class represents. We tend to think that the victims of our success are just the people excluded from the club. But history shows quite clearly that, in the kind of game weâ€™re playing, everybody loses badly in the end. …
The fact of the matter is that we have silently and collectively opted for inequality, and this is what inequality does. It turns marriage into a luxury good, and a stable family life into a privilege that the moneyed elite can pass along to their children. How do we think thatâ€™s going to work out?
This divergence of families by class is just one part of a process that is creating two distinct forms of life in our society. Stop in at your local yoga studio or SoulCycle class, and youâ€™ll notice that the same process is now inscribing itself in our own bodies. In 19th-century England, the rich really were different. They didnâ€™t just have more money; they were tallerâ€”a lot taller. According to a study colorfully titled â€œOn English Pygmies and Giants,â€ 16-year-old boys from the upper classes towered a remarkable 8.6 inches, on average, over their undernourished, lower-class countrymen. We are reproducing the same kind of division via a different set of dimensions.
Obesity, diabetes, heart disease, kidney disease, and liver disease are all two to three times more common in individuals who have a family income of less than $35,000 than in those who have a family income greater than $100,000. Among low-educated, middle-aged whites, the death rate in the United Statesâ€”alone in the developed worldâ€”increased in the first decade and a half of the 21st century. Driving the trend is the rapid growth in what the Princeton economists Anne Case and Angus Deaton call â€œdeaths of despairâ€â€”suicides and alcohol- and drug-related deaths.
The sociological data are not remotely ambiguous on any aspect of this growing divide. We 9.9 percenters live in safer neighborhoods, go to better schools, have shorter commutes, receive higher-quality health care, and, when circumstances require, serve time in better prisons. We also have more friendsâ€”the kind of friends who will introduce us to new clients or line up great internships for our kids.
These special forms of wealth offer the further advantages that they are both harder to emulate and safer to brag about than high income alone. Our class walks around in the jeans and Tâ€‘shirts inherited from our supposedly humble beginnings. We prefer to signal our status by talking about our organically nourished bodies, the awe-inspiring feats of our offspring, and the ecological correctness of our neighborhoods. We have figured out how to launder our money through higher virtues.
Most important of all, we have learned how to pass all of these advantages down to our children. In America today, the single best predictor of whether an individual will get married, stay married, pursue advanced education, live in a good neighborhood, have an extensive social network, and experience good health is the performance of his or her parents on those same metrics.
Weâ€™re leaving the 90 percent and their offspring far behind in a cloud of debts and bad life choices that they somehow canâ€™t stop themselves from making. We tend to overlook the fact that parenting is more expensive and motherhood more hazardous in the United States than in any other developed country, that campaigns against family planning and reproductive rights are an assault on the families of the bottom 90 percent, and that law-and-order politics serves to keep even more of them down. We prefer to interpret their relative poverty as vice: Why canâ€™t they get their act together?
Stewart’s mea culpa article is intelligent and well-written, but gravely flawed by many of the characteristic intellectual errors of the meritocratic community of fashion elite.
It’s true that life in America has changed. Economic, regional, and cultural changes enormously increased social and physical mobility over much of the last century, killed local industries, and drained, year after year, ever larger percentages of people with brains and talent and initiative out American small towns and rural counties, sending them off to the big cities and their posh suburbs.
The automobile and the shopping mall killed Main Street, and the big multiplex theaters killed the hometown movie palace. Now Amazon is killing off the malls, and digital streaming off the Internet is killing off the multiplexes.
It is characteristic of members of the intelligentsia like Matthew Stewart to place limitless confidence in the calculative powers of human reason and the wisdom of credentialed experts and to imagine that the iron laws of economics and the choices of the gods of History can simply be set aside by the application of a bit of collectivist statism. That perspective is obviously dead wrong.
Unless you are prepared to go to the same lengths as Pol Pot and march people at gunpoint out of the city and into the countryside again, you are not going to change all this. A hundred years ago, many people were sad that the gods of Economics had decreed that the small family farm had to die and everyone had to move into town and take work at the factory or the mill, but it happened, and that is how economies progress and standards of living rise. But change always comes with some pain as its cost.
The establishmentarian feels guilty and suffers from an obsession with Equality. People like Matthew Stewart naturally believe that they are the cat’s pajamas, the winners in Life’s Olympic Race, and they assume that everybody is crying himself to sleep every night for not being one of them.
They are profoundly wrong in a couple of ways. First of all, it is possible to be a good man and a person of accomplishment and skill in all sorts of ways not measured by the SATs and entirely unconnected to graduation from elite schools or the publication of important books. There are circumstances in life in which you’d be better off having the assistance of a skilled automobile mechanic or a grizzled old hunting guide than that of an Oxford graduate or best-selling historian.
Then, it is also an important fact of life that it is simply impossible for everybody in the world to graduate from a top Ivy League school and grow up to be a doctor, lawyer, investment banker, or management consultant. The world really does have to have more Indians than chiefs. And not everybody thinks the same way. I have some things in common with Mr. Stewart: I went to Yale and I sometimes read The Atlantic. But they’d have to pay me by the hour to live in Brookline or any similar place. And I’m surrounded out here in rural Pennsylvania by people who feel the same way.
My Trump-voting neighbors here in the Central Pennsylvania boondocks are, it’s true, ill-educated, and unfashionable. They are also a lot less affluent than people like Mr. Stewart. They do have some problems, but most of them, at least most of the older ones, are not unhappy. I think younger people out here in the sticks are more decidedly the left-behinds, and are more demoralized by the decay of Religion and the local economy, and the weakening of all the institutions. And it is there, not in the areas Mr. Stewart talks about, that we meritocrats are to blame.
If you go to Princeton or Yale, you can reject bourgeois society, organized Religion, and Kipling’s gods of the copybook headings and (mostly) get away with it. You’re a clever person and probably a strong-willed person, so you can do drugs and get up and go to work anyway. You believe in free love, but somehow in the end, you wind up married anyway. But where we catch a cold, the ordinary people back home get the Plague. Without the old-time Religion and conventional bourgeois morality keeping them on the straight and narrow, for them, everything goes to shit. You get single mothers, jailbird fathers dead at 35 from booze or meth or crashed cars, neglected, badly-raised kids, and ruined lives all over the place.
Our guilt does not lie in erecting barriers to entry at Ivy League schools. Our class’s guilt lies in our snobbery, our boundless self-entitlement, and our abandonment of hometowns, home regions, and obligations of leadership and fellowship, in our home communities, and in the deplorable example we set with our wholesale rejection of tradition and conventional wisdom.
29 Mar 2018
The Guardian published a moving excerpt from extract from The Cow Book: A Story of Life on a Family Farm by John Connell. (Not on sale in the U.S., but you can buy it via Amazon.UK.)
It has been a busy week and I am tired, for between the days and nights I am but a servant to the cows. Sometimes I have wondered what it is all for. I do not earn money doing this work: the farm pays for itself and no more. To make a living through farming is hard work, and there are few full-time farmers in the area; most men have other jobs, as builders or tradesmen or teachers. Da is one of the few full-time farmers, but that was not always so. For more than two decades he was a builder with my uncle John, but he retired 10 years ago, for the work had grown too hard and, though he was still young, it had aged him. …
I take the calf in both my arms and the adrenaline is such that I do not feel his weight. I carry him to the fresh bedding, jack, ropes and all. I must move quickly , for we have lost calves with fluid on their lungs before. I pour water in his ears and he shakes his head and comes to life. But then he coughs, and I can hear the fluid, so I take a breathing tube with a mask on its end and fit it over the calfâ€™s muzzle. You extend the pump and its vacuum pulls the fluid up and, in theory, the calf should cough up the fluid. I do this three times, but the fluid does not come up, and he begins to wheeze. I cannot lose him. I pick him up with a roar and carry him over to the gate and sling him across it.
I have seen this done before, but the calf has always been lifted by two men, so I must have found new strength. I massage his lungs and give him a slap, and soon I see the mucus emerge. He lifts his head and I know that he is won. I release him down into my arms and carry him back to the fresh bedding, alive and safe. And with that, the half-door opens â€“ it is my father, bright and smiling.
And I know now that something has happened. Iâ€™ve passed a test of some kind, and I am glad. He opens the half-door and walks in. He is in his jobbing coat, which is his blue velvety coat for the mart. My uncle Davy follows behind, along with my young cousin, Jack.
â€œThereâ€™s money being made here,â€ says Davy, and we laugh. I stand up now and they admire the calf. He is a fine wee bull. I unloose the cow and leave her and her newborn to each other. She licks him, gently and softly, despite her size. Nature will do the rest. I am 29, but I feel so much older tonight. …
When the weanling calves had reached 14 months and put on the required weight, Da decided it was time to sell them. There are just four calves left now, too young to sell; we will fatten them on spring grass soon. Walking through the shed, I miss the presence of the others, their noise and smell and rumble. But they are the payment to the bank for the land. They are money embodied, nothing more. That is what Da says.
On this we do not agree. I cannot see them just as products. They are animals, not mere steak-holders. They may carry flesh but they carry personality too â€“ memories and feelings. But to go down this route is not businesslike. And farming above all is a business, I am told.
The reality of beef farming is that the cows live so that they can be killed. They are here so that they may die. If we did not eat meat, they would not exist, or not in such great numbers. All our cows on this farm will be killed at one time or other; they shall get old, or reach their weight, and all shall know the butcherâ€™s knife. But even knowing this, and even for the businessman-farmer, I do not believe it is solely about the money, nor that he sees the animals only as future beef. If it were, I do not think he should get up so instinctively in the middle of the night to deliver a new calf or tend to a sick lamb. There must be nature in the man for the beast, nurturing in the human for the non-human.
Through its relationship with man, the cow has been transformed into a carefully programmed â€œproductâ€ in the food chain. Where once the cow was manâ€™s most valued companion from the natural world, now its value in some nations depends on removing it entirely from this world. It has lost its sentience, it seems, in the minds of those involved in the industrial process.
In the west, the break with farm and butcher is nearly complete. As consumers, we buy most of our meat from supermarkets, packed and sealed. Sometimes it is dyed with red colourant to make it more appealing, or injected with water to add extra weight. Few children have seen farms other than on television, or in a bedtime storybook. Most people have never seen a slaughterhouse or a cattle carcass. When we are so alienated from the living source of our food, it is perhaps inevitable that the next step is to cut out the cow altogether. …
There may well come a day when cloned meat is available in the supermarkets of London and the delis of New York, when steaks are grown in labs and test tubes from stem cells. But we have a choice over whether we want this future.
And yet, even as some manufacturers are taking these radical steps towards an artificial future, other farmers are following an alternative path. The organic and grass-fed movement has allowed a small group of growers and farmers to survive corporations, conglomerates and cloners. Organic beef or grass-fed beef may be more expensive to the consumer, but the beast has had a better life, one free of housing, confinement and stress. We raise them to die, but they live a life of peace and nature. Our way of farming here in Ireland â€“ our familyâ€™s way of farming â€“ may be seen as a backward step, but it is a way in which the animal can live with dignity, and in which the farmer has retaken the old and respectful role of custodian of the land and the environment for the next generation.
Nobody wins the fight against the iron laws of Economics in the long run. Nobody. But you can’t help rooting for John Connell, who is perfectly right, aesthetically and morally. Human beings have an ancient, countless millenia long, relationship with our domestic animals and fulfilling our role as their servants, masters, friends, and admiring associates makes us and them both happy.
Alas! the world only gets older, stupider, and more urbanized. The middlemen get all the money, and farming is either an impersonal heartless, soulless, factory operation or a personal hobby supported by the farmer’s real job. But the consumer gets cheaper meat. The cruel god of Economic reality giveth as well as taketh away.
John Connell is essentially the same kind of thing as the Jacobite rebels of the 18th century: sure to lose, a doomed cause, but a cause you cannot help rooting for.
09 Mar 2018
1910 Republican campaign poster.
Charles G. Mills does a good, and succinct, job of explaining tariffs, historically and politically.
President Trump has proposed significant tariffs on the importation of steel and aluminum. Should we support or oppose these measures? The answer is not simple; it lies in the details of the tariff law, rather than in a single principle about all tariffs. On balance, a significant tariff on steel and aluminum is worthy of support, despite its harmful effects.
07 Mar 2018
1927 $2.50 gold piece.
When my Lithuanian great grandparents arrived in the United States of the late 19th Century, we had beautiful gold money with images of Indians and Big Game Animals, there were no gun laws and there were no drug laws, and there was no Income Tax. No wonder they came here!
Ralph Benko, in Forbes, argues that if Trump really means to make America great again, restoring a gold standard would be a great first step.
In 1971 President Nixon, under the influence of his Svengali-like Treasury Secretary John Connally, “suspend[ed] temporarily the convertibility of the dollar into gold.” That closure proved durable instead of temporary. The dollar became, and remains, the world’s global currency.
What had been an â€œexorbitant privilegeâ€ devolved into an exorbitant liability. As my former professional colleague John D. Mueller, of the Ethics and Public Policy Center, formerly Rep. Jack Kemp’s chief economist, writing in the Wall Street Journal in Trump’s Real Trade Problem Is Money recently and astutely observed:
a monetary system based on a reserve currency is unsustainable, since foreign official dollar reserves (for example) are acquired and must be repaid in goods. In other words, the increase in official dollar reserves equals the net exports of the rest of the world, which means it must also equal U.S. international payments deficitsâ€”an unsustainable situation.
In other words, if President Trump wishes to address Americaâ€™s merchandise trade deficit (balanced to perfection, of course, by a capital accounts surplus) he will find that allowing the dollar to be used as the global currency is the real snake in the economic woodpile. The dollarâ€™s burden as the international reserve currency, not currency manipulation by our trading partners or bad treaties, is the true villain in the ongoing melodrama of crummy job creation.
Muellerâ€™s Wall Street Journal column enumerates the three options open to President Trump:
First, muddle along under the current â€œdollar standard,â€ a position supported by resigned foreigners and some nostalgic Americansâ€”among them Bryan Riley and William Wilson at the Heritage Foundation, and James Pethokoukis at the American Enterprise Institute.
Second, turn the International Monetary Fund into a world central bank issuing paper (e.g., special drawing rights) reservesâ€”as proposed in 1943 by Keynes, since the 1960s by Robert A. Mundell, and in 2009 by Zhou Xiaochuan, governor of the Peopleâ€™s Bank of China. Drawbacks: This kind of standard is highly political and the allocation of special drawing rights essentially arbitrary, since the IMF produces no goods.
Third, adopt a modernized international gold standard, as proposed in the 1960s by Rueff and in 1984 by his protÃ©gÃ© Lewis E. Lehrman â€¦and then-Rep. Jack Kemp.
To â€œmuddle alongâ€ would, of course, be entirely antithetical to Trumpâ€™s promise to Make America Great Again. It would destroy his crucial commitment to get the economy growing at 3%+ — vastly faster than it has for the past 17 years — which also happens to be the recipe for robust job creation and upward income mobility for workers. It also is the essential ingredient for balancing the federal budget while rebuilding our infrastructure and military.
To turn the IMF into a world central bank would, of course, be anathema to Trumpâ€™s economic nationalism. To subordinate the dollar to the IMFâ€™s SDR would be equivalent to lowering Old Glory and replacing the American flag with the flag of the United Nations on every flagpole in America. Unthinkable under a Trump administration.
That leaves the third option, to â€œadopt a modernized international gold standard, as proposed in the 1960s by Rueff and in 1984 by his protÃ©gÃ© Lewis E. Lehrman â€¦ and then-Rep. Jack Kempâ€ (whose eponymous foundation I advise). To this one should add, as Forbes.com contributor Nathan Lewis has shrewdly observed, the removal of tax and regulatory barriers to the use of gold as currency.
President McKinley would be proud.
02 Mar 2018
A papyrus fragment containing text from St. Paul’s Letter to the Galatians offered for sale on eBay in 2012. Oh me, oh my!
Roberta Mazza proves that you can have a graduate degree and specialized academic expertise and still be a total imbecile with respect to markets, governments, and reality.
We academics must help protect the objects we study. Some of my colleagues believe that scholarship comes first, or say that texts have no guilt, so we should be faithful to them. They publish what emerges from the market. I disagree. To publish papyri with suspicious â€” if not illegal â€” provenance is unethical. It lends a new identity to those artefacts and feeds the illicit market.
Looting and illicit excavations in Egypt not only destroy the archaeological landscape forever, but also have also caused deaths and injuries to Egyptians, including children, employed to dig in narrow shafts. In 2016, two archaeological guards, Ashrawy and Mustafa Ali, were shot dead by looters in action. And there is good reason to believe that many crimes go unreported in the current political and economic climate. (That said, in the UK, academics who facilitate exchanges of improperly-obtained antiquities can be charged for money laundering.)
So what should we do with all of these suspiciously-sourced fragments? They should be immediately returned to the legitimate owner: Egypt. (Egyptian authorities may eventually reach a deal with the collectors for study and publication before repatriation.) Those who study papyri must exercise due diligence before publishing anything, and academics should exercise an active role in educating collectors and keeping an eye on the market. Would you knowingly buy a stolen bike? Why would you buy â€” or publish â€” a stolen manuscripts?
Ms. Mazza, firstly, suffers from the self-entitlement and inclination-to-control-the-universe syndrome which characteristically afflicts credentialed members of the academical elite. That naturally combines with uncritical left-wing statism, producing a pathological hostility to free markets and the voluntary and organic interactions of ordinary mortal human beings who lack badges, official positions, and doctorates, along with an uncritical bias in favor of the State, even when the State consists of a corrupt Third World kleptocracy and dictatorship.
The rational reader learns from Dr. Mazza’s article that this small papyrus fragment was offered for sale on Ebay by a source one might not want to invite home to meet the parents, but in the end a little way down the road, what do you know! was evidently purchased by some capitalistic plutocrat and donated to a museum, where it is obviously being carefully preserved and kept available for study and research.
Her problem, of course, is the absence of a good provenance. But Dr. Mazza expects everything her own way, and refuses to reflect on causes and effects and the nature of reality. Why is there no provenance? Obviously a provenance is lacking, because this papyrus fragment could not be bought and sold openly. It had to travel from valueless, totally inaccessible, probably dangerous occult obscurity to its resting place in a prominent collection via the black market.
Why the black market? Obviously because greedy, pompous, grasping primitive governments like that of Egypt despotically claim total ownership of all antique, archaeological, and historically valuable material found, discovered, unearthed, or passed along in some chain of private or corporate possession in their territory. Better that artifact lie buried in the ground than that some Egyptian peasant carry on the millenia-old antiquities hunting trade, find it, profit privately, and let the item go to some institutional collection in a civilized Western country. No, no, no, that would be a theft from, and an affront to, the People’s Collectivist State.
Obviously, if in a different world, a world in which academicians looked objectively at economic reality, Human Nature, and the legitimacy, ethical qualities, and level of sophistication and culture of different governments and societies, those academics would do the really ethical thing and dismiss out of hand the insolent claims of ephemeral contemporary brigandish regimes to the inherited legacy of mankind generally, and they would insist that private initiative and market forces be permitted to operate freely, recognizing the former as by far the most efficient, effective, and reliable mechanisms, those being actually in accord with individual self interest, for the recovery and preservation of antiquities of every kind.
In a free market situation, instead of being covertly offered on Ebay, a valuable papyrus fragment would have been advertised widely with every bit of documentation and provenance possible in order to maximize the object’s value and to bring it to the attention of every possible interested individual and institutional collector. The missing provenance isn’t the fault of market processes. It is the fault of over-reaching, oppressive Statism.
15 Feb 2018
Hendrik Gerritsz Pot, Floraes Mallewagen (Flora’s wagon of fools), c.1640.
Anne Goldgar explains that the cautionary story of the great 17th century Dutch Tulip Bubble is mostly wrong.
Why have these myths persisted? We can blame a few authors and the fact they were bestsellers. In 1637, after the crash, the Dutch tradition of satirical songs kicked in, and pamphlets were sold making fun of traders. These were picked up by writers later in the 17th century, and then by a late 18th-century German writer of a history of inventions, which had huge success and was translated into English. This book was in turn plundered by Charles Mackay, whose Extraordinary Popular Delusions and the Madness of Crowds of 1841 has had huge and undeserved success. Much of what Mackay says about tulip mania comes straight from the satirical songs of 1637 â€“ and it is repeated endlessly on financial websites, in blogs, on Twitter, and in popular finance books like A Random Walk down Wall Street. But what we are hearing are the fears of 17th-century people about a 17th-century situation.
It was not actually the case that newcomers to the market caused the crash, or that foolishness and greed overtook those who traded in tulips. But this, and the possible social and cultural changes stemming from massive shifts in the distribution of wealth, were fears then and are fears now. Tulip mania gets brought up again and again, as a warning to investors not to be stupid, or to stay away from what some might call a good thing.
11 Feb 2018
Forbes interviews Gilder on the future of Big Tech.
Q: One of your lifelong theories, which reaches back to your 1980s bestsellers https://www.amazon.com/gp/product/1596988096?ie=UTF8 and The Spirit of Enterprise, is the role of the human spirit and human agency, something economists and governments donâ€™t see or donâ€™t want to acknowledge.
Gilder: Itâ€™s the greatest of all forces. Think about whatâ€™s going on in the U.S. today, particularly in our university system. As Tyler Cowen describes in his book The Complacent Class, weâ€™ve adopted a kind of ideology of cautionary principles and stationary states. He really puts his finger on it. Weâ€™re not living in an age of boldness and abundance, but in an age of retrenchment and shrinking horizons and careful rearrangements of existing resources. A lot of it is epitomized by this whole idea that unless human beings stop moving, the climateâ€™s going to collapse on us.
The climate-change paralysis has been very destructive, not only to our national economy but particularly to Silicon Valley. Every time I find a company thatâ€™s doing everything right, I discover a peculiar feature of its technology thatâ€™s designed chiefly to stop it from emitting carbon dioxide. And that feature twists the technology into a pretzel, making it less useful and less promising. Take Google. Itâ€™s making an elaborate effort to render all of its massive data centers around the world â€œcarbon-neutral.â€ Theyâ€™re all linked up to various druidical Sunhenges of solar panels or quixotic kites or windmills. I mean, thatâ€™s some archaic way to produce energy!
I think weâ€™re really in the middle of a loss of confidence, a loss of courage that is expressed and perpetrated by a massive expansion in regulations. This began in the Bush era, was vastly expanded during the Obama years, but has now been marginally retrenched. My hope is that the Trump retrenchment signals a truly new approach to the world and the human predicament.
02 Aug 2017
â€œOnly government can take perfectly good paper, cover it with perfectly good ink and make the combination worthless.â€
— Milton Friedman
19 Jul 2017
Patric Park, Adam Smith, 1845, Kelvingrove Art Gallery.
A must-read essay.
As Boaz says at the outset of The Libertarian Mind, “In a sense, there have always been but two political philosophies: liberty and power.” …
[The new liberalism, by inspiriting for the first time in history a great mass of ordinary people, produced a massive explosion of betterments. Steam, rail, universities, steel, sewers, plate glass, forward markets, universal literacy, running water, reinforced concrete, automobiles, airplanes, washing machines, antibiotics, the pill, containerization, free trade, computers, the cloud. It yielded in the end an increase in real income per head by a factor of thirty, and a startling rise in the associated ability to seek the transcendent in Art or Science or God or Baseball.
I said 30. It was a stunning Great Enrichment, material and cultural, well after the classic Industrial Revolution.
The Enrichment was, I say again in case you missed it, three thousand percent per person, near enough, utterly unprecedented. The goods and services available to even the poorest rose by that astounding figure, in a world in which mere doublings, increases of merely 100 percent, had been rare and temporary, as in the glory of fifth century Greece or the vigor of the Song Dynasty. In every earlier case, the little industrial revolutions had reverted eventually to a real income per head in today’s prices of about $3 a day, which was the human condition since the caves. Consider trying to live on $3 a day, as many people worldwide still do (though during the past forty years their number has fallen like a stone). After 1800 there was no reversion. On the contrary, in every one of the forty or so recessions since 1800 the real income per head after a recession exceeded what it had been at the previous peak. Up, up, up. Even including the $3-a-day people in Chad and Zimbabwe, world real income per head has increased during the past two centuries by a factor of ten, and by a factor of thirty as I said, in the countries that were lucky, and liberally wise. Hong Kong. South Korea. Botswana. The material and cultural enrichment bids fair to spread now to the world.
And the enrichment has been equalizing. Nowadays in places like Japan and the United States the poorest make more, corrected for inflation, than did the top quarter or so two centuries ago. Jane Austen lived more modestly in material terms than the average resident of East Los Angeles.
HT: Arnold Kling.