http://politicalcalculations.blogspot.com/2013/06/keeping-big-dominoes-from-falling.html#.UbCbZitp4w0INTERVENTION: STOPPING THE BIG DOMINOS
Of course, we would argue that the problem is actually allowing the small dominos to constantly fall. Government creates big dominos. The market works constantly to destroy them.
GOVERNMENT CREATES BIG DOMINOS – AND THE BIGGEST IS ITSELF.
Source date (UTC): 2013-06-07 04:25:00 UTC
http://www.cato-unbound.org/2013/06/03/michael-c-munger/recycling-can-it-be-wrong-when-it-feels-so-rightRECYCLING IS BAD.
“Will someone tell me this article is wrong?!”
No, the article is not wrong. It is correct. Even graciously so.
HOWEVER:
1) THE ECONOMICS OF THE RECYCLING MOVEMENT
The reasons to enforce recycling are (a) political in that it advances the leftist ideological vacuum created by the failure of socialism in theory and practice, (b) psychological – it creates awareness of the veyr important issue of maintaining a clean environment, and (c) it places economic pressure (the possibility of boycott) on marketing and packaging companies.
But recycling anything other than ‘oil, gas, liquid poisons and radioactives’ is not ‘good for the environment’ or logical or economic in any sense of the word. The optimum solution is to compartmentalize deposits land-fills so that they can be sold off and ‘mined’ at a future date when and if it ever becomes economically viable. In other words, the cost of sorting, transporting, breaking down and distributing goods is not sensible.
The problem with plastics is not recycling but that they don’t break down well. Plastic bottles and packaging in particular. Recycling is simply a means of providing political cover using false economic calculations for what is probably the most troublesome pollutant that we make. The seas are full of that junk (although, mining the seas for plastic might eventually become a good business for someone. it depreciates our experience of the environment.)
Contrary to popular belief, landfills are small, inexpensive, and concentrate waste, and create an opportunity for future recycling at low cost. They concentrate resources at low cost for future use. They are ‘savings accounts’ full of resources that can be mined when the economics make it sensible to mine them. Conversely, it’s extremely expensive to transport all that nonsense around to use it now, when we don’t NEED to use it. And we can only tell that we NEED to use something if FIRST, the pricing system tells us so, and SECOND if our moral codes, once understood, suggest that there are not involuntary transfers being created .
Of course, the economic solution is to drastically reduce population and drastically increase consumption. It’s not that we consume too much. That’s not really logical. It’s that we have too many people consuming.
Consumption is like information. The more the better. Space travel for example, is the ultimate consumption. It’s freaking expensive. The mass required to convert into energy necessary to get to another planet is terrifyingly expensive in every possible term. So is the information necessary to solve the problem. Every cost we distribute widely is a cost not dedicated to the narrow pursuit of something like space travel.
2) MORAL RULES ARE PROHIBITIONS ON THEFT
The author is correct in what he senses, but cannot articulate:
(a) the pricing system does not make visible ALL costs. (This is one of the three or for conceptual failures in libertarian economic theory – because it discounts the cost of morals – norms, and morals are extremely costly to develop in any society.) Prices tell us what people WANT, what they NEED, and are WILLING TO DO to get it. The last being the most important. But that’s ALL they tell us.
(b) He doesn’t understand that morals costs are material costs. Because our actions are costly. Our time is costly. But most importantly, our OPPORTUNITIES that we DON’T TAKE are very costly – that’s what manners and ethics are: lists of opportunities that we do NOT take, because it transfers costs in time, opportunity, effort and money, from others involuntarily. Most economists do not make this mistake. Almost all political science, and all political philosophers make this mistake – almost bar none.
3) LIES AND DAMNED LIES
The excuses offered by producers of pollutants, and those of the recycling movement are as ridiculous as the carbon market argument: POLLUTING IS STEALING. PERIOD. And GOVERNMENTS created the ability to pollute by giving SANCTION to polluters, and requiring that ordinary consumers have ‘standing’ in order to sue polluters. There is no reason that we cannot require x number of signatures in order to produce ‘standing’ for a crime of pollution, in which every single person has only a micro-claim against the polluter.
The current argument is that our politicians are elected for this purpose. The stupidity of the argument never ceases to amaze me: why then do we need demonstrably influenceable and corruptible politicians elected by majority rule instead of courts to resolve what are of necessity property rights? This is yet another illustration of the argument against representational government and in favor of the common law, courts, and property rights.
You can’t sue polluters because the government prevents you from doing it. The common law allows you to. It allowed you to. Governments took away that right on purpose in order to increase taxation available from pollution generating manufacturers. (Yes, you can look it up.)
Source date (UTC): 2013-06-04 05:36:00 UTC
ECONOMIC FALLACY #2 : HIDDEN COSTS
Not Accounting For Hidden Costs or HIdden Transfers.
This is somewhat similar to “the broken window fallacy” introduced by Frédéric Bastiat. Bastiat tells a parable where a shopkeeper’s son breaks a window in the shop. As a condolence people say that at least the son has fueled a job for the man who will repair the window. While the son did circulate money, and boost one industry, the shopkeeper would have used his money to employ other labor if the window had not been broken.
When the government spends money on something, part of the cost is not only the dollars spent, but the things that the money would have been spent on otherwise. Amazingly what the money would have been spent on otherwise is very often the same thing the government is trying to create. So politicians may have done nothing at all when all is said and done, we may even be worse off, but they can take credit for what was created.
The current best example of this is the stimulus. Supporters of the stimulus can say that it created jobs, but because we can only speculate on what might have happened without the stimulus, the true costs remain hidden.
Lawrence Lindsey argues convincingly that it was simply a waste of money. One of his best lines is “Since the beginning of the recession, the number of unemployed has increased by more than 8 million people. For $800 billion, we could have handed every one of these people a check for $100,000.” Not only is the cost over $800 billion, but it may very well be the case that more jobs would have been created if that money remained in the hands of the private sector. For those of us who think government is by nature horribly inefficient, that is a reasonable conclusion.
Spending money for policies like the stimulus is usually a beneficial political move (although when you get up to $800 billion your chances get a lot worse). First and foremost, you can say you “did something about it.” That always counts for a lot in politics (this is another point made by Sowell). You don’t want to be caught sitting on your hands, not wasting money. Second, you can say that it would have been far worse if you didn’t do something, since all we can do is speculate about the alternative. Third, you can point to a concrete example of progress you have made. You were part of the effort that created hundreds of thousands of jobs. It doesn’t matter if its cost was so high, that it may have also erased hundreds of thousands of jobs.
Generally speaking the government is so inefficient that when it says it created something, most likely it destroyed far more in order to create it.
Source date (UTC): 2013-04-11 03:08:00 UTC
YOU WANT A LIBERTARIAN GEM FOR TODAY?
The ethics of competition. From another piece I’ve been writing.
“Competition” itself, as we use the term, is the normative sanction of external involuntary transfer by an artificial, counter-intuitive, set of rules we call the market, consisting of voluntary transfer of goods and services, by fully informed consensual exchange, and insured as fully informed and consensual by warranty, at the cost of opportunity and investment to other producers of similar goods, in an effort to coerce producers to innovate in their use of resources, to produce goods for all at lower price, or higher quality, in an effort to produce goods and services at the lowest cost and highest quality for all consumers participating in that set of normative rules that comprise that market, and which we in turn call ‘a society’.
-Curt
Source date (UTC): 2013-03-20 06:35:00 UTC
ROTHBARD’S FOLLY – THE WALLS OF THE GHETTO
A system is determined by its limits. Limits are causes. Rothbard’s system of thought is based upon ghetto ethics, and the assumption that the ghetto can be extended to all human orders. But the ghetto is a product of the city that contains it. The ghetto cannot exist without the city. The circular folly of that reasoning – despite Rothbard’s extraordinary literary production, never seems to have occurred to him.
Aristocratic egalitarianism (classical libertarianism) is caused by the necessity of a minority of professional warriors to use cooperation on rapid tactics while at the same time retaining their sovereignty. It is an alliance of small businesses. A group of shareholders. And their strength increased as they increased enfranchisement.
There are limites to this system too: those aristocratic egalitarians must continue to fight for sovereignty.
And the only criteria for sovereignty is private property.
Source date (UTC): 2013-02-17 03:44:00 UTC
SYMMETRY
WARRANTY
EXTERNALITY
Bring libertarian ethics out of Rothbard’s ghetto and back to the aristocracy whence it came.
Voluntary exchange isn’t enough. Its ghetto liberty. Aristocracy requires symmetry warranty, and prohibition on externality.
Without these three ethical properties, voluntary exchange alone is a license to commit fraud.
Source date (UTC): 2013-02-15 19:39:00 UTC
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2139670&http%3A%2F%2Fpapers.ssrn.com%2Fsol3%2Fpapers.cfm%3Fabstract_id=2114620EXCEPTIONAL PAPER ON HOUSING’S RELATIONSHIP TO THE ECONOMY
“What made housing vulnerable to a bubble? And why has the housing market been so impervious to attempts at resuscitation?
This Article critically reviews the theories of the housing bubble. It argues that housing is unusually susceptible to booms and busts because credit conditions affect demand and because the market is incomplete and difficult to short. Housing market distress transmits to the macroeconomy through a balance sheet channel, a construction channel, and a collateral channel.
Housing is unique as an asset class in that it is both a consumption and investment good. It is also the largest single consumer asset and debt class. Because housing is credit-backed and such a large asset class, failure will impact the financial system itself and pull down the economy as a whole. The dual-use of housing, its ubiquity on consumer balance sheets, its highly correlated pricing, and its linkage to the macroeconomy make it a particularly painful type of asset bubble to deflate.
The credit-backed nature of housing is also the key to understanding why there was a bubble. We argue that the bubble must be understood as stemming from the change in the mortgage financing channel from Agency securitization to private-label securitization (PLS). This shift enabled financial intermediaries — economic, but not legal agents of borrowers and investors — to exploit the information problems inherent in PLS for their own short-term gain. In other words, a set of agency problems in financial intermediation was the critical factor in fomenting the housing bubble.”
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2139670&http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2139670&http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2114620
Thanks to Adam Levitin at http://www.creditslips.org/
Source date (UTC): 2012-08-31 21:32:00 UTC
“We don’t let children play with matches. It’s dangerous. Not just for them, but for everyone else. They can burn down the whole house. For the same reason, we shouldn’t let Keynesians play with money. They burn the civilization to the ground while they cheer the bonfire, congratulating themselves on having made heat for everyone.” — (Me.)
Source date (UTC): 2011-12-05 09:17:00 UTC
“The Department of Transportation found that, in 2009, commutes by private car took, on average, 23 minutes. Public transportation, by contrast, took an average of 53 minutes. “
Public transportation is slow. It’s loud. It’s ugly, and it’s dirty. It’s only suitable for people with very regular schedules. It dampens consumption. It’s absurdly expensive per person – particularly rail. It feeds the public sector bureaucracy. It allows large corporations to get subsidized labor rather than pay increased wages. And frankly, it’s unsanitary. So, it’s all well and good that downtown cores make use of public transportation. But otherwise, we’d be better off giving people zero interest used car loans. I realize some people love it. And as a resident of downtown Boston I appreciated it – when I wasn’t freezing to death in the wind chill. But I don’t have the regular schedule, the extra hour a day to waste, plus the extra time on either side of the work day, nor the time to make separate trips for groceries and what-not. Even in Germany almost eighty percent of the population commutes by car. I’m glad that some people think it’s sensible. But the math doesn’t make sense to me at all.
Source date (UTC): 2011-10-18 06:30:00 UTC
http://www.capitalismv3.com/?p=3302Any definition of “Equitable” requires we understand ALL the transfers involved, and the ALL consequences of those transfers.
Source date (UTC): 2011-07-18 08:56:00 UTC