Gilligan's Island Economics

Featured at www.Mises.org today:

The Monetary Economics of Thurston Howell III

Gilligan's Island Economics can provide useful thought experiments, writes B.K. Marcus, for the same reasons Robinson Crusoe Economics has served as a staple of classical and Austrian School economics texts. One thing Gilligan has, which Crusoe doesn't, is a shared culture with the others on the island.

Full article: http://www.mises.org/fullstory.aspx?control=1595

wifi hotspots

Back in Swarthmore since the weekend, and happily back in house-husband mode, but we're having terrible DSL problems.

When we first moved into this apartment, last June, and hadn't even ordered DSL yet, I discovered that there were already a couple of wifi hotspots here, one that required a password, called upotheke (?) and one that did not, called Apple Network 7d83f2 -- probably an Apple Airport.

Upotheke can be picked up throughout the apartment, but doesn't do me any good. Apple Network 7d83f2 can be picked up only in the front of the apartment. I carried my powerbook out into the stairwell where I discovered I had a full signal. So I guess our neighbors across the hall have an unsecured Airport. I knocked on their door in June to mention it, but nobody was home and I haven't tried again since.

I wondered how many other hotspots were in this little village, so I carried my powerbook outside and walked down the block. There are public benches in a tiny little town square. That's a hotspot. There's a lunch place down the block from there where the missus and I have enjoyed several meals. There's a hotspot there with full signal. I haven't yet tried the public library.

It was the first time I've felt like reality was starting to catch up with my high-tech fantasies.

So DSL has been flaky every evening for a week and now it's completely down. Verizon is doing a line check, with an "estimated" downtime of 24-to-48 hours! And I'd just submitted a piece, and am still waiting to hear back. Not a good time to be offline. But then -- I'm not. I'm at the dining table, updating my blog, riding the wireless internet from the neighbors across the hall ...

This is not the world I grew up in.

Potemkin & Braziltime

With reference to my comments on Jesse Ogden's blog, the black-and-white images are from Eisenstein's Battleship Potemkin and the color shots are fresh from my Criterion Collection DVD of Terry Gilliam's Brazil:

Concise Guide on Price Gouging

Well, Jim Cox's ConciseGuideToEconomics.com is not yet back online, but I've at least recovered the files, so I'll quote his entire Price Gouging chapter here:

6. Price Gouging

Price gouging -- charging higher prices under emergency conditions -- evokes strong emotional responses that are understandable but terribly wrong-headed.

In the words of economist Walter Williams, "passionate issues require dispassionate analysis." The passion generated by price increases for necessities in an emergency is just such a case. Three lines of analysis demonstrate that "price gouging" is not only not offensive, but that preventing it would increase misery, and that it is even a desirable practice!

Let's take for example, the case of some hot item during an emergency, say plywood as in the aftermath of a hurricane. Before the hurricane, plywood was selling for the nationwide price of $8.00. After the hurricane prices of $50.00 or more may not be uncommon.

The first line of analysis should be the most meaningful for red, white and blue, freedom-loving Americans. If one person (the seller) has plywood and is willing to part with it for $50.00, it is because he would prefer having the money to having the plywood. If another person (the buyer) has $50.00 and is willing to part with the money for the plywood, it is because he would prefer the plywood to the $50.00. No one is forced to engage in this transaction, individual freedom is preserved in this voluntary exchange, and it results in a mutual benefit. Can anything be less objectionable than a free exchange of goods which results in a mutual benefit?

Secondly, a successful effort to prevent price gouging would harm the very intended beneficiaries in our example. With thousands of needs, there is a vastly increased demand for plywood. At the same time the storm has destroyed existing plywood (trapped under rubble, damaged, or lost) and made it exceptionally difficult to transport additional supplies into the area.

Preventing increased prices as a way of allocating the reduced supply with the increased demand would result in a more severe shortage, and plywood going to uses that are less than the most urgently needed ones. An example: If one could sell a sheet of plywood for a legal or socially-stigmated maximum of $8.00, he may well decide to keep it for some relatively trivial use rather than part with it for a use considered by the potential buyer to be of the most urgent importance. At $50.00 the choice is likely to be otherwise. Misery is thereby increased by the implementation of measures to prevent price gouging.

The point should also be made that the price of a good is determined by the actual conditions of supply and demand. The willingness and ability of buyers and sellers to trade is what establishes any particular price -- before and after an emergency situation. In an emergency, the facts have obviously been changed. It is reactionary and a revolt against reality to demand a never-changing price forevermore in the ever-changing world we inhabit.

And last, the desirable effect of successful "price gouging" would be in the higher $50.00 price motivating sellers to increase the supply of plywood reaching the citizens in need. The fact is, the cost of sending goods into a disaster area is dramatically increased because of the damage. Trucks now take longer to reach their destination -- time is money after all -- the likelihood of driver and rig being trapped within the affected area is another increased cost, and the prospect of looters seizing merchants' goods has also increased. All of these and other factors have the effect of discouraging shipments at the old $8.00 price; the supplier could do just as well in any other area. The increased price resulting from the misnamed price gouging should be harnessed to encourage the needed supply--it is one bit of salvation disaster victims can scarcely afford to do without.

None of this analysis is intended to disparage the heroic efforts of charitable relief agencies, only to pause to consider that in addition to the relief efforts, higher prices are themselves a necessity to assure an increased flow of goods in time of need. These higher prices are not a matter of what is fair or unfair, regardless of anyone's initial gut reaction, but a matter of what is, given the actual facts of the situation.

site recovery

I returned to Charlottesville last night to recover the host machine that was suddenly cut off from the internet last week.

(By the way, at 3 different points between the George Washington Bridge and the Washington DC Beltway, they're doing late-night construction that shuts down most of the highway. What in at least one spot started out as 4 lanes became 3 became 2 became 1. Even traveling at midnight, there's enough traffic that a 1-lane bottleneck backs things up for miles. It takes an hour to go the distance between 2 exits. And this is going on in THREE different stretches of I-95! My traveling companion said it was as if things were designed to deliberately piss us off. I told him I'd fill him in on the economics of "road socialism" if he wanted. He declined.)

Anyway, my sleep schedule is thoroughly messed up again. I enjoyed learning recently that Murray Rothbard regularly stayed up all night with his fellow libertarians and would then sleep until 3pm the next day.

But bkMarcus.com is now fully recovered (as far as I can tell) as is BlackCrayon.com.

power crisis

I was a civil-libertarian "liberal" before I became an ethically-consistent libertarian.

(Although, unlike the ACLU, I've never seen the 2nd Amendment as an aberration within the Bill of Rights, and it always bothered me that my fellow "liberals" opposed it so ardently and so irrationally. My friends called me an "armed liberal" back before they and I learned the term 'libertarian'.)

I was an ethical libertarian (E1) before I became an economic libertarian (E2). This means that I accepted the Non-Aggression Principle as an ethical basis for libertarianism, long before I understood enough economics to fully grasp the practical consequences of government intervention.

The Non-Aggression Principle formalizes a way of living that many people already believe in:

No one has the right, under any circumstances, to initiate force against another human being, nor to delegate its initiation.

-- L. Neil Smith

Still under the sway of my liberal indoctrination, I accepted that the practical consequences (P2) of laissez faire might be negative, and that intervention might therefore have positive results, but I've never believed that the ends could justify the means. That's what it means to be ethically principled (P1).

Relatively late in the game, I started to learn economics, and came to learn that my statist indoctrination had been a pack of lies.

The evils of deregulation, so called, turn out to be the results of intervention, not the consequences of free markets at all.

Even without knowing enough to guess at causes, I became very skeptical of media portrayals of "deregulation". This meant that when California had its power crisis of three or four years ago, I knew the media had to be wrong to portray it as the dread effects of deregulation. Had I begun to read economics, I'd have known immediately that shortages can only be caused by price-fixing, and that free pricing will balance supply and demand.

I posted yesterday's rant against emergency price fixing before I read the following passage in Thomas DiLorenzo's new book, How Capitalism Saved America:

When the government imposes a price ceiling -- that is, mandates prices that are below what the free market would generate -- it artificially boosts consumer demand while reducing incentives for supply, which causes shortages. To see the negative consequences of price ceilings, one need look no further than the electric power catastrophe in California that began in 2000. The state government placed price controls on electricity and at the same time (to pander to the environmental lobby) enacted regulations that effectively prohibited electric companies from generating new power. It doesn't take much more than common sense to realize that this was a sure-fire recipe for the electric power shortages that have plagued California (though the anticapitalists insist on blaming the shortages on "deregulation," even when the electric power industry is heavily regulated).

emergency price fixing

Now that I know my father survived Hurricane Charlie, I'll turn to the inevitable government idiocy that followed.

One of the most basic laws of supply & demand is the law of price fixing:

• Price ceilings (when the State mandates a maximum price below the free-market price) cause shortages.
• Price floors (when the State mandates a minimum price above the market-clearing price) cause gluts.

Whenever supply and demand are unbalanced, look for price fixing.

If you can't understand price fixing, you can't understand anything in economics. This means you should refrain from holding or expressing any opinions on any economic subject whatsoever!

Laws against "price gouging" are price-fixing laws. The fact that they apply only in emergencies doesn't change the economic effects of price fixing, which is that mandatory price ceilings cause shortages. What the government is doing is causing artificial shortages during emergencies!

I'd like to link to Jim Cox's chapter on Price Gouging in his book, The Concise Guide to Economics, but that website is on the inaccessible host machine for another few days, so instead I'll link to a couple of recent articles on the issue:

Anti-Gouging Idiocy, by Roderick Long

Anti-Price-Gouging Laws Harm Consumers, by Sheldon Richman

You Can't Take It With You

I think my third article was accepted today. This one is on Gilligan's Island Economics. I will, of course, post a link to this blog when the piece goes up. [update]

Meanwhile, Nathalie's work year has begun and we transition back into the pattern of last winter and spring: Here's your coffee dear; don't be late; I'll take care of that; kiss, kiss; have a good day at work, love; see you later ... oh my but this place is a mess! The floor is filthy -- I'd better vacuum ...

And I will, honest. But first I check email and find that Tom Ender has written a review of the 1938 Frank Capra film, You Can't Take It With You.

I've added it to my Netflix queue. I've only ever seen the play. On TV, starring Jason Robards. Watched it several times, because my mom had it on VHS. It sounds like it's a very different plot. The play takes place in the neighborhood I grew up in: Claremont Avenue, by Columbia University. The conflict is that the youngest woman in Grandpa's house wants to marry the son of a rich industrialist. The son wants to play jazz, if I remember properly, but is trying not to piss off his dad. The families are meeting for the first time, and all does not go well.

Just the other day I was describing the play to someone as a libertarian story in all but name. It's not merely individualist -- in that ideologically inconsistent way that much of the political Left can be -- it's anarchic: Grandpa refuses to pay taxes!

partisanship is hypocrisy

I voted for Clinton in 1992.

I'm embarrassed, but there you have it.

That was the last time I voted for a major-party candidate. The first four years of that presidency taught me that the evils of the previous 12 years had been government evils, not Republican evils. But I still identified more with Democrats than with Republicans. It took the Lewinsky tail-gate scandal to dissolve the vestigial links between me and the so-called liberals (democratic socialists).

Not that I cared about Mr. Bill's sex life, or Miss Monica's, or any of the surface-level issues. What drove me nuts was the blatant hypocrisy of everyone who seemed to have a strong stance on what was going on. As Timothy Leary said, "The only intelligent way to discuss politics is on all fours, since it all comes down to territorial brawling in the end."

Another Tim Leary quote, this one from The Eightfold Model of Human Consciousness:

Larvals do not like to receive information unless the facts fit into their 3rd Circuit reality net and immediately reward their emotional status. Democrats were delighted to hear the facts about Nixon, but Republicans were irritated and resistant.

To which I add: In the 1990s, we got to see this same perception game with the roles reversed.

This is why I call P3, the non-rational third tier of belief, the "political" tier. When one is dealing in the realm of emotions, symbolism, alignment, "whose side you're on," etc., there is no need, apparently, for any rational consistency. Leave that to people who care about principle or consequences. Political battles, in a majoritarian democracy, are about hormones, reflexes, fight-or-flight instincts ...

I want to be shut of all of it.

These thoughts brought to you by the following two articles, which found their way to my Inbox this morning:

Bush, Kerry and partisan hypocrisy, by David Boaz, Central Oregonian

The Political Brain, by Steven Johnson, New York Times Magazine

PS How aware is Steven Johnson of his obvious political bias? I'm sure he knows his bias, but does he know how obvious it is in his writing?

the burden of freedom

Once upon a time, I had a friend who dreaded freedom.

That doesn't mean he wanted to be a slave, with all his decisions made for him and probably to his disadvantage, but he preferred the idea of a universe with limited options and one correct path. Like a multiple choice test with only A, B, C, and D to choose from. Where I was always talking about generating more options, generating an abundance of options, he saw such an abundance as reducing his chances of picking the one correct path. Rules were good. The more the better. The more rules, the fewer options.

This cartoon reminds me of him.



Click to Enlarge

political illiteracy

Somewhere or other I've claimed that one's understanding of minimum wage law is a good litmus test for economic (il)literacy. Here I will claim that the belief that we can have a Welfare State without the Warfare State is a a sure sign of political illiteracy. This is a practical point (E2/P2); there are those of us whose objections to the Welfare State are principled (E1/P1) but people seem unmoved by ethical arguments, so instead I emphasize consequences: welfare leads to warfare and vice versa.

(Click to Enlarge.)

smart money on Kerry

I received the following article in my email today, sent by the author, Andrew Sprung:

Another look at Tradesports by an anxious voter:

State-by-State, "The Wisdom of Crowds" Lays Odds on Kerry

The smart money says Kerry will win the 2004 election.

That money is laid down by those who legally bet on the election outcome at "futures trading" websites such as Iowa Electronic Markets (IEM) and Tradesports.com. IEM, it is often pointed out, has a better 12-year track record than the brand name polls in predicting the outcome of presidential elections. As James Surowiecki, economics writer for The New Yorker and author The Wisdom of Crowds, has pointed out, the aggregate wisdom of people who put their money where their mouth is arguably the best predictive tool known to humanity.

At first glance, the current top-line data from both IEM and Tradesports tell us merely what we already know -- that the race is too close to call. As of Aug. 12, IEM has the odds all but dead even -- the price of a "future" is $.51 for Bush, $.50 for Kerry. Tradesports.com also quotes virtually even odds: the Aug. 12 "bid" on Bush reelection is 50.2, while the "ask" is 51.0

But the Tradesports' market for state-by-state Electoral College outcomes tells a different story. If one assumes that bettors know their home states (or those they choose to bet on) best, it looks like Kerry has a "future."

If Bush wins every state in which Tradesports "investors" give him at least a marginal edge, he will win, with 274 electoral votes to Kerry's 264. But the incumbent has an uphill struggle in the states viewed as most competitive by Tradesports bettors.

Tradesports' current odds place only seven states within a 60-40 range. Call them the "hot" battleground states. Of those, five states with a combined 68 electoral votes -- Florida, Missouri, Nevada, Ohio and West Virginia -- are currently in Bush's column. Only two states favoring Kerry -- Wisconsin and New Hampshire, good for 14 votes -- show hot battleground odds.

If we define odds of better than 60-40 as reasonably firm support, then Bush's firm support adds up to 206 electoral votes -- and Kerry's to 250.

The odds, moreover, are firmer on average in Kerry's hot battleground states than in Bush's. Here are the bid-ask prices on a Bush victory in the seven states in question:

State	Bid	Ask	Electoral Votes
Ohio	56.0	58.8	20
Nevada	56.3	56.9	5
Missouri	55.0	57.1	11
West Virginia	50.1	54.7	5
Florida	49.2	51.1	27
Wisconsin	43.5	48.0	10
New Hampshire	38.6	43.0	4

Taking the mean in each case between bid and ask, Bush's odds in Kerry's two "hot battleground" states average to 43 -- seven points below even. In contrast, the President's odds in his own five HBs average to 54.5 -- just five and a half points above even. His 68 "hot battleground" votes are more in play than Kerry's 14.

The odds in Kerry's favor look even stronger in light of Tradesports' bettors' apparent assumption that "a tie goes to the incumbent." According to battleground state polling by Zogby International posted on the Wall Street Journal Online, Kerry is ahead in three of the states -- Missouri, West Virginia and Florida -- in which Tradesportsmen are still laying odds on Bush. In other words, Kerry is running ahead on a field that bettors have very rationally tilted slightly toward the incumbent.

Current results, of course, are no guarantee of future performance. But right now Surowiecki's "wisdom of crowds" points toward Kerry.

Andrew Sprung
sprung4@eclipse.net

@#$%^! Network Provider ...

The blog is back up. Everything else is down.

Our network provider pulled the plug without warning.

My colleague is trying to find a place to move our host machines.

Meanwhile I've moved the bkmarcus.com domain over here and have replublished the blog -- but the images are still on the old server ...

BlackCrayon.com is on the inaccessible box.

Knatz.com and Macrofinformation.org (my father's websites) are on that box.

CatFarmer.com -- the website of my favorite right-brained anarchist -- is on that box.

ConciseGuideToEconomics.com is on that box.

Here's the letter I just wrote the interested parties:

What terrible timing.

Nathalie and I just moved from Virginia to Pennsylvania on Sunday. Either Monday night or Tuesday morning, my former business partner (AC) and I lost access to all our host machines. Last night he informed me that our network provider has moved to Washington, DC -- without warning us!

So the machines are fine, but they have no internet access.

AC (who also moved to Pennsylvania, but happened to be in Virginia when this happened) is trying to find a new location for our machines, both physically and online. He has paying customers whose sites are now down!

If we find space, you're welcome to continue to keep your sites with me, but I'll also understand if you choose not to. I want to promote your sites by providing hosting, but I'm also a no-income cheapskate, who will probably continue to seek inexpensive deals with the kind of people who, unfortunately, pull this sort of thing without warning. I pass the savings on to you.

I will try to get your sites back up as soon as possible and I will try to get your data to you even sooner if you have somewhere else to park your websites.

With apologies and helplessness ...

vanity & distraction

I often quote myself; it adds spice to my conversation.

George Bernard Shaw

Cold sober, I find myself absolutely fascinating.

Katharine Hepburn being interviewed on the Dick Cavett Show, 1973

While trying not to think too hard about Hurricane Charley, I offer three of my favorite self-quotes:

Political capitalism (government run for a capitalist elite) has been a great evil. Everyone can see that, no matter what their rhetoric. But the evil has been in the politics and not in the capitalism. Without understanding that, the vast majority look to politics for the solution, for the weapon they believe they need to fight capitalism.

bkMarcus

Civilization has two children: the Market, and the State. Almost everything good about civilization seems to have come out of the Market, out of cumulative systems of voluntary exchange. Almost everything bad about civilization seems to have come out of the State, out of the organized use and threat of violence.

bkMarcus

Straw-man "individualism": The position that individual rights always supersede group rights.

Stated this way, individualism seems unreasonable -- seems in fact like a call for dogmatically privileging one entity over another.

True individualism is both far more reasonable and far more radical for it denies the very existence of such a thing as "group rights".

According to individualism, no one's rights ever supersede anyone else's rights because all rights are equal and compatible.

bkMarcus, BlackCrayon Dictionary

not THAT B.K. Marcus!

The Bank of the United States was established in Philadelphia in 1791. By the 20th century the bank was one of the most important in the country. In 1930 rumours began to circulate that the bank was in trouble. On the 7th December long queues began forming outside the bank's branches. Over the next four days depositors took out $20 million from the bank. On the 11th December, all its branches closed, as the bank no longer had any money to give back to its customers. It was the most disastrous failure in the banking history of the United States. Investigators discovered that the bank's owners had been guilty of incompetence and three of them, B. K. Marcus, Saul Singer and Herbert Singer, were sentenced to terms in Sing Sing Prison.

B. K. Marcus, Saul Singer, and Herbert Singer

---cut here---

Source: http://www.spartacus.schoolnet.co.uk/USACbank.htm

Wow. Sing Sing. Couldn't have happened to nicer guys, I'm sure. It would be hard to come by a more ironic association for my nom de plume, nom de guerre, nom de marriage, nom de nouvelle famille, etc. Maybe if there had been a B.K. Marcus working as a Hamiltonian lickspittle during the conspiratorial genesis of The Federalist Papers ...

For those of you who don't know, "Spartacus Educational" is a British anarcho-commie website with a very lefty conspiracy skew on Anglo-American history.

For an American, anarcho-capitalist, semi-conspiracy skew on the history and economics of central banking, see the following:

The Mystery of Banking (PDF)

What Has Government Done to Our Money?

The Case Against The Fed

All by Murray Rothbard.

TLE feedback

I received the following feedback on my TLE minimum wage article.

Greetings bkMarcus,

I enjoyed reading your article about the minimum wage in TLE's 8/8/04 edition.

While discussing the minimum wage laws with people, I have found that including an example is an excellent way to get the point across.

Here is the one that I use:

Suppose that I own a company that ships boxes of goods. Within my company, I have a group of employees who physically pack the boxes. Based on the cost that I charge my customers, I have determined that I can pay $1 per box packed. Some of my employees pack very fast (say 30 per hour) so I pay them more than others who can only pack 10 per hour. When a new employee starts, he might only be able to pack 5 per hour. As he gains experience, he will become a better worker and might eventually become one of my 30 per hour employees.

But here's where the minimum wage laws come into effect. If the minimum wage is raised to $6 per hour, should I pay my 5 box per hour more than the work he has provided for me? Would that be a good business decision? Or am I better off only hiring people who can pack at least 6 boxes per hour? What happens when the minimum wage is upped to $10 per hour? It would be in my best interest to clear my staff of anyone packing less than 10 boxes per hour.

The case of a new employee I would hire who can do 5 boxes per hour will never be given an opportunity at my company; it is not in my best interest to pay him twice his worth (through the fault of the mandatory minimum wage). Because I don't hire him, he will never be given the opportunity to increase his skill and get paid well above the minimum wage.

In the case of my shipping business (which can be applied to any business), the minimum wage laws have hurt the very people they are designed to protect. Instead of earning $5 per hour and being a productive member of society, my former employee is now unemployed.

How is this a good thing?

To which I replied:

What I like about your example is that it explicitly ties remuneration to productivity, which is of course the point most supporters miss. Paying by the box is more concrete than paying by the hour. Unfortunately, even this simple example requires a basic level of business literacy that I'm afraid too few people seem to grasp. Explaining minimum wage law and price fixing to someone who actually deals with profit and loss is much easier than it is to explain such things to students, academics, minor bureaucrats, so-called "public sector" workers, etc. Even cubicle workers in a large enough corporate hierarchy are divorced from the basic issues of productivity. Money has become so abstracted for them that it becomes an arbitrary form of symbol manipulation, no longer grounded to the creation of goods and services. This is, of course, no accident. If more people had even the basics of economic literacy, we'd live in a very different world -- one in which the government would get away with much less. Economic illiteracy is therefore in the interest of the ruling classes.

the flight trajectory of stage birds

From a recent email from an old friend:

Someone I work with told me that there was a very high-profile stage production of The Sound of Music in the 1960s, for which the director wanted to release a flock of birds at the end of the song "Climb Ev'ry Mountain," when the soprano hits the climactic final high note. Unfortunately the set designers and production team placed the holding cage for the birds too high up and too close to the hot lights, and the birds were broiled. When the soprano hit the high note at the end of the song and the backstage crew pulled the cord to open the cage, instead of taking flight, hundreds of dead birds free-fell in a heap onto the middle of the stage.

Canadian Hip Replacements

I have a once-shattered hip now being held together by plates and screws. I'm told that I will eventually need at least one hip replacement.

Walter Williams, in the article I cited earlier, says that Canadian "hip-replacement patients often end up non-ambulatory while waiting an average of 20 weeks for the procedure, and that's after having waited 13 weeks just to see the specialist. The wait to get diagnostic scans followed by the wait for the radiologist to read them just might explain why Cleveland, Ohio, has become Canada's hip-replacement center."

So this aspect of socialized medicine strikes a personal chord with me.

Here's a comic strip that might be based on "a December 2003 story by Kerri Houston for the Frontiers of Freedom Institute titled 'Access Denied: Canada's Healthcare System Turns Patients into Victims'," [PDF] but is more likely based on the same Walter Williams article I've already pointed to.

(Click to Enlarge)

The Evil of 2 Lessers

"Bush has been terribly protectionist. Kerry promises to be worse. Bush has been an outrageous big spender. Kerry says that he hasn't spent enough. Bush dramatically expanded the welfare state. Kerry says it is not nearly enough. This is competition of a very strange sort: a contest to see how one can outdo the other in bad ideas and bad behavior."

-- Lew Rockwell, "Two Kinds of Competition"

time in supply ... and demand

We are moving this week, which makes it hard to do much of anything else.

Fortunately, I have DSL at both ends of the move, but unfortunately, I have little time at either end.

Since I can't do much of my own writing this month, I'll try to put up pointers to other people's good works.

I'll start with Walter Williams on socialized medicine. I like his ending so much that I'm going to blow it right here. But do read the whole article anyway.

Health care can have a zero price to the user, but that doesn't mean it's free or has a zero cost. The problem with a good or service having a zero price is that demand is going to exceed supply. When price isn't allowed to make demand equal supply, other measures must be taken. One way to distribute the demand over a given supply is through queuing -- making people wait. Another way is to have a medical czar who decides who is eligible, under what conditions, for a particular procedure -- for example, no hip replacement or renal dialysis for people over 70 or no heart transplants for smokers.

I'm wondering just how many Americans would like Canada's long waiting lists, medical czars deciding what treatments we get and an exodus of doctors.

My favorite economics writing is that which uses the most basic supply&demand rules to say things most people don't find obvious.

I'm contemplating writing a booklet on Gilligan's Island Economics -- something small, maybe $1 or $2 -- that would at least introduce people to the most basic economic literacy.

The 3 'E's of the Minimum Wage

Here I was, feeling a little annoyed that The Libertarian Enterprise hadn't acknowledged receipt of an article I'd submitted to them last week, when I check the latest issue and find that they published it!

(In my first blog post, I say, "I've written a piece on the 3 'E's of the Minimum Wage, and I will post a link when and if I get it published." This is that piece. When I wrote it, it had footnotes and a link to Jim Cox's Concise Guide to the Minimum Wage. They didn't make it into the published version.)

That's now 2 of the 3 pieces I've written this summer. Wish me luck with #3 ...

lefties

I don't remember who it was who introduced me to the idea of one-handed typing. (No, not that sort of one-handed typing!) If you know how to touch-type, you know that certain letters belong to the left hand and certain letters belong to the right hand. Maybe it was Andrei Codrescu on NPR who did a piece on this idea. Talking about which entire words could be done with left-handed letters or right-handed letters. One of the jokes I remember from the commentary is that "Jimmy" is on the right while "Carter" is on the left, and that was the problem with the president himself. (Touch-type those names and you'll get the point.) Codrescu, if it was him, did this bit back in the 1980s. Some things stick with me.

So I tried to see exactly how politically leftist a "poem" I could manage with all left-handed words. Here's what I came up with:

after we saw free trade a rat race was vast
                                                               

fat cats
bearded bastards
                                                               

     wages were bad
we rads scarred scabs

   swabbed sweat
 saved drab dresses

bartered rags
                                                               

a secret race
ate feasts
   as we starved
                                                               

far freer were we
aware as we were
                                                               

sage reds

Responding to Feedback

In the day and half since the Ludwig von Mises Institute published "Can Markets Predict Elections?" I have received some very supportive email as well as questions and challenges in both email and the Mises blog.

Rather than answering in several messages and both media, I'll try to reply to everyone here.



I'll also indulge myself by sharing with you one of the more flattering emails I received:

Hi!

Just went through your piece on "Can markets predict elections?". This is one of the most elegantly written, well researched piece to come out the Mises Blog in some time. Keep up the good work.

Yours truly,

Anuj

rave review

Yesterday, the first email I got in response to my Mises article was this wonderful message:

What a TERRIFIC debut! I followed the Pentagon fiasco pretty closely as it
happened (it was mentioned on Mises.org) and arrived at conclusions much
like the ones you present so ably.

I contribute to Mises Daily Articles myself, but I don't think my own
three installments together approach your one for theoretical import. Mine
are mere chit-chat - interesting, perhaps even heartening, but very light on
the analytic side. Yours would seem to put your subject to bed quite
thoroughly, neatly, and permanently. Now we know what to think about this,
and can move on to applications (if any) and other subjects.

I look forward to the next subject you tackle, anticipating a thorough,
informative, and satisfying treatment.

Joe Potts
Miami

(I recommend Mr. Potts's article on Fair Trade Coffee, and his piece on war and commerce should be standard reading for all anti-war folks!)

first published article!

I have been reading Mises.org for over a year now (both Daily Articles and e-books), and I've listened to every MP3 they have available.

Recently I began participating in their blog (first example; second example).

Today, I'm quite proud to have my first article published on their website:

"Can Markets Predict Elections?"

On Atheism, Agnosticism, and Faith

Do you get the difference between irrational and a-rational?

Something is a-rational if it is outside the realm of reason. Feeling happy or sad is neither rational nor irrational. My preference for vanilla over chocolate is not a rational preference, nor is it an irrational preference. It has nothing to do with rationality at all. It is a-rational.

How about the difference between immoral and amoral? I too often hear people use the latter as if it's a $10 version of the former, but it's the same distinction. Something is amoral if it is outside the realm of morality. Something is immoral if it is part of the good-versus-bad universe and it comes down on the side of bad. The tornado that destroys your house is amoral. The person who initiates force is immoral.

Got the distinction?

A belief system that neither includes nor excludes the existence of God or gods is technically atheistic. Pure Buddhism is, in this sense, an atheistic religion. The Buddhist nun, Pema Chodron, uses the term "non-theistic" to communicate this concept because everyone thinks "atheistic" means "anti-theistic".

The difference between theism and non-theism is not whether one does or does not believe in God. It is an issue that applies to everyone, including Buddhists and non-Buddhists. Theism is a deep-seated conviction that there's some hand to hold: if we just do the right things, someone will appreciate us and take care of us ... From this point of view, theism is an addiction. We're all addicted to hope... Non-theism is relaxing with the ambiguity and uncertainty of the present moment without reaching for anything to protect ourselves ... In a non-theistic state of mind, abandoning hope is an affirmation, the beginning of the beginning.

-- Pema Chodron, Hopelessness and Death

I suppose the clearest way to communicate this distinction is to follow Pema's lead and avoid the word 'atheism' altogether -- to specify either non-theism (a lack of a belief in God) or anti-theism (a positive belief in the non-existence of God). What I tend to do instead is make the distinction as negative atheism (lack of belief) versus positive atheism (as in, "I'm positive that there is no God!" -- which is not a lack of belief, but a strong belief, positively held, for the non-existence of God).

Most people would sloppily call non-theism, or negative atheism, agnosticism -- but a-gnosis means "outside knowing". An agnostic is not someone "on the fence" over the whole existence-of-God issue, but rather a person who knows that he doesn't know, either way. You've heard of the suspension of disbelief? An agnostic practices the suspension of belief.

It is not the case that atheism is a stronger form of agnosticism, or agnosticism a weaker form of atheism. They deal with entirely different questions. Atheism is an ontological position, while agnosticism is an epistemological one. (The former deals with questions of existence while the latter deals with questions of knowing.)

Most people who call themselves atheists mean by that term what I am here calling anti-theist or positive atheist. They have a positive belief in the non-existence of any "higher power".

What most atheists do not realize is that their position is based on faith.

What do I mean by faith?

Either

1. belief without evidence (an a-rational position), or
2. belief in contradiction to the evidence (an irrational position).

Positive atheism is a faith in the first sense. There is no evidence, either way.

But most positive atheists hold their position irrationally because they believe that their position is rational, rather than a-rational. (Following all this?)

Negative atheism, on the other hand, is compatible with true agnosticism. Not just compatible: the two go together. Knowing that you can't know often means that you do not believe either way.

At my most intellectually rigorous, I am both agnostic and negatively atheistic (non-theistic), but most of the time, like it or not, I'm a positive atheist: I tend to believe in God's non-existence.

I know I have no proof -- but sometimes you have to have faith!

Life of bk

Believe it or not, I am, tonight, for the very first time ever, watching The Life of Brian.

Friggen hilarious!

I remember standing at my hallway locker at Cathedral School, one locker away from David Miller, the handsome, cool, athletic, black boy who all the girls admired, and two lockers away from Caitlin Murray, first girl to break my heart. (Knatz, Miller, Murray ... our lockers must have been in alphabetical order.) According to IMDB, Life of Brian came out in 1979 which would have made us 12 years old.

The three of us, standing at our lockers:

David Miller: [to Caitlin] So, what's new in the life of Caitlin?
Caitlin Murray: [to David] Oh, not much. What's new in the life of David? [turning to Brian] THE LIFE OF BRIAN! [laughter]

[Brian walks away in disgust.]

Somehow, that stupid little seven-second exchange managed to keep me away from Monty Python's masterpiece for the next quarter century!

blockquote

"Regulations are a full-employment bill for economists!"

-- Walter Block

At Mises University tonight, Walter Block gave a personal remembrance of Murray Rothbard. (I watched the video stream from Mises.org!)

He ended by telling a joke ... or rather by telling about a time he told a couple of jokes to a conference on anti-trust law. What follows isn't word-for-word.

Soviet criminal #1: "I'm in prison because I always came to work late and the state prosecuted me for theft of time and wages."

Soviet criminal #2: "I'm in prison because I always came to work early and the state accused me of brown-nosing to get personal advantage."

Soviet criminal #3: "I'm in prison because I always came to work exactly on time and the state accused me of owning a western watch."

[UPROARIOUS LAUGHTER FROM THE ANTI-TRUST AUDIENCE]

Anti-trust criminal #1: "I charged lower prices than my competition and was prosecuted for predatory pricing."

Anti-trust criminal #2: "I charged much higher prices than my competition and the state accused me of profiteering."

Anti-trust criminal #3: "I charged exactly the same prices as my competition and was charged with collusion."

[DEAD SILENCE]

Why Robots?

Ken MacLeod, author of the great SF novel, Stone Canal, wrote a very nice piece in his blog a couple weeks ago on the twentieth-century fascination with robots:

http://tinyurl.com/5k2to

distance learning

I promise that this blog won't just be a set of links to Gary North articles.

(It will also be a set of links to Murray Rothbard articles!)

(Oh, and some of my articles too, as they slowly find their way into publication.)

Today, for the first time, I got a glimpse of what internet-based distance learning will be like. Mises University 2004 -- the week-long summer session that the Mises Institute holds to teach students the basics of the Austrian School -- is offering a live video feed of their lectures.

Now I've already listened to every MP3 that Mises.org makes available -- usually on my iPod while I do other things. I started out doing something similar with the Mises feed: playing the lectures on power speakers while I assembled shelves and unpacked boxes of books, but by the second half of Hans-Hermann Hoppe's introduction to Praxeology, I have to admit, there was something compelling about sitting still and just watching the lecture on my powerbook, where I could have (but didn't) take notes, check references, look up words, etc. (Hoppe introduces Praxeology at most of the Mises University summer sessions, but I found this year's particularly good. He gave historical background, political implications, and a philosophical refutation of positivism.)

Here's what North has to say on how the internet will impact 21st-century education:

The Coming Breakdown of the Academic Cartel

And here's a longer version he makes available in an email report:

Never Pay Retail for a College Education

North is especially good on the cartel economics of the university system.

Odalisque & Comic Strips

My beautiful wife and I are in separate states tonight. (I don't mean like the state of fatigue and the state of inebriation: I mean like the state of Kentucky and the state of Pennsylvania -- or are they commonwealths?)

We spent more than half the time apart last year, so you'd think I'd be used to it, but this is the first time this summer and I miss her.

She loves Non Sequitur by Wiley Miller. Like Boondocks, which she also loves, it is stupidly interventionist on some basic economic issues -- but who isn't these days? Still, there's some real intelligence behind both those strips.

My homepage randomly includes comic strips from my collection of favorites. It's full of Boondocks. Non Sequitur is starting to catch up. Here are a couple of recent ones I quite liked. (You can click on the reduced image to see the full-sized image.)