Thursday, May 13, 2010

Ah, government "efficiency"

It always amuses me when people explain to me how inefficient things like infrastructure would be if we didn't have a "central government to plan and coordinate it" all. How could we possibly have private roads?? What, would you have to stop and pay a toll every block?

Constructors of such silly strawmen really ought to consider the bar that their preferred system is setting before casting stones. In this post from Washington State's department of transportation, they gleefully announce the success of their planning process:

The announcement of a preferred alternative marks a milestone 13 years in the making. Since 1997, WSDOT and regional leaders analyzed design alternatives for a replacement SR 520 bridge and improved corridor.

13 years? 13 *years*?? 13 mother fucking YEARS???

It took these clowns 13 years - and who knows how much money went into this planning - just to decide *what to do*? And all that while, the bridge has been "seismically vulnerable", so it's not like there wasn't a cost to this delay (beyond the obvious costs).

A free market alternative may or may not be better, but anyone trying to claim that there's just no *room* for an alternative to be better has their head up their arse.

Wednesday, March 10, 2010

Obamacare supported by insurance companies

One of the really incorrect things you see in the debate on Obamacare is the lefties' kneejerk assumption that if something is big government, it must be anti big-corporation. So many lefties hate and mistrust capitalism and they associate big companies with capitalism that it is not even a questioned thing in those circles. However, one thread I've been learning the importance of over the last year or two is that there is a huge difference between "big corporations" in a truly capitalist society, vs big corporations in our current setup. In our current setup, we have what is sometimes called "crony capitalism" which, unfortunately, is not capitalism at all, or is certainly not "free markets". I've made this mistake myself for a long time as well, often defending large corporations as if they must be little valleys of true capitalism/free-markets instead of realizing that in our current setting, they are often egregious products of crony-capitalism.

Crony capitalism quite simply is corporations that use the non free-market power of government to their advantage, thus doing decidedly non free-market things. A classic example are laws for regulating companies: often these are pushed by the biggest companies in that industry because they are large enough to afford the cost of regulation while it greatly increases the barrier to entry of small competitors, effectively providing them protection. Of course, direct subsidies and tariff protection are too extremely obvious cases as well.

In either case, one of the illusions going around about Obamacare is that this is a way for the left and the US population to stick it to insurance companies, and that this is essentially the people vs the insurance companies. Explicit in that is the notion that the insurance companies must be fighting Obamacare.

In fact, though, they are *supporting* Obamacare, in a classic piece of crony capitalism. As Reason writes:

"We allow the insurance industry to run wild in this country," President Obama declared on Monday. "We can't have a system that works better for the insurance companies than it does for the American people."

Yet Obama's plan to tame health insurers would boost their business, protect them from competition, and guarantee their profits, all at the expense of consumers and taxpayers. It is therefore not surprising that the insurance companies, while they object to the president’s rhetoric and quibble over some of the details, are happy to be domesticated. Here are five ways in which Obama would help insurers while pretending to fight them:

The individual mandate. What industry wouldn't welcome a law requiring everyone in the country to purchase its product? The insurers' only objection to this edict—which would force young, healthy people who don’t want insurance to subsidize the care of older, sicker people who do—is that the penalties for failing to comply are not severe enough.

The employer mandate. Requiring businesses to buy medical coverage for their employees brings the insurers more conscripted customers. It also shores up a perverse system of employer-provided health insurance that insulates consumers from prices, limits their choices, and weakens competition.

Subsidies. Allocating taxpayer money to help individuals and small business buy medical coverage makes customers less price-sensitive, allowing insurers to charge more than they otherwise could.

Regulations. Obama wants to dictate the details of what he considers to be minimally acceptable medical coverage, including the size of deductibles and the extent of benefits. This policy, which forces people to buy pricier policies than they would choose on their own, is like decreeing that all Americans should buy a Nissan Altima with GPS, a sunroof, and leather seats, even if they would prefer a Hyundai Accent.

Limits on competition. Obama pays lip service to the idea of letting health insurers, like other insurers, compete for customers across state lines. But his minimum coverage requirements would undermine a major benefit of such competition: the ability to escape a particular state's restrictions on the policies insurers can offer.

If Obama's plan works as advertised, it will be a huge boon to insurers. As he himself notes, "they're going to have 30 million new customers" thanks to the government's mandates and subsidies.

Tuesday, January 12, 2010

More on "hating the rich"

I had an unpleasant interaction with someone recently that culminated in his changing his .sig to "Rich people who whine about paying taxes should be publicly raped and executed. Paid for with their own money, of course."

Now, clearly, this person is, unfortunately, dealing with some emotional issues. I am not claiming that any emotionally healthy people actually advocate this. But the mindset that it exaggerates is a baffling common one: that there is something evil about "the rich".

There are lots of reasons for this mindset (and undoubtedly have been many attempts to explain it one way or the other; I'm hardly the first to have commented on this), but sometimes I come back to a common theme: that "money" distorts people's thinking. To illustrate, consider the following thought experiment:

Bill Gates is rich because he has lots of money. According to the above mindset, there is nothing at all wrong with taking his money, because he has way too much of it and it should be redistributed to poorer people. That is not "theft", it is "taxation". As we know, Bill Gates got rich selling copies of MS Office and MS Office (for the most part; let's just leave it at that for the purposes of our thought experiment). That is, many times over, he exchanged a product to a consumer that judged the product to be of more worth to them than the $200 or so that they paid for the product. Imagine now that Bill Gates never sold those copies of software: he produced them, in prodigious quantities, but stockpiled them in a warehouse. At this point, he doesn't own a single dime, but he's sitting on an amount of product worth a fortune. Is he rich? And if he is, would it then be ok to just go in and take his *product* - the product he hasn't even sold - and call it "taxes"?

I maintain that the typical anti-rich person would be conflicted with doing the latter, even though it is the exact same. What is the difference between waiting for Mr Gates to sell a copy of the software and then taking the money that was paid for it from him, and just taking the software in the first place? (Assume zero transactional costs, since that is not at all germaine to the thought experiment). But the "anti-rich" person is going to have a hard time with their kneejerk rich-hating *if the victim doesn't have a nickel to his name*.

Somehow there's a cognitive mistake being made: people don't treat "money" as just a proxy for "stuff". Stuff, they understand: you can't just take stuff. But money? Money isn't "real", so taking it is purely an abstract act.

I can't help but imagine that part of this cognitive mistake is a function of fiat currency: it literally *isn't* real. No wonder it seems like an abstraction: it is. The government's constant manipulation of currency just exacerbates this impression. It's yet another mark against fiat currency and the Fed, though hardly the only one.

I'll end with a "pithy saying" of my own invention, relatively devoid of any real meaning like most pithy sayings and only distantly tangentially related to this post, but still kind of fun to me:

It is often said that "money is the root of all evil." It has always struck me that, in fact, it's a *lack* of money that is the root of all evil.

Thursday, January 7, 2010

Stop the Panic on Security

Here's an article that I really can't add much to; it's spot-on.

Friday, November 27, 2009

What is Austrian Economics?

Just so I don't lose it, here is a list of "Themes" that define Austrian economics, taken from ThinkMarkets:

(1) the subjective, yet socially embedded, quality of human decision making; (2) the individual’s perception of the passage of time (‘real time’); (3) the radical uncertainty of expectations; (4) the decentralization of explicit and tacit knowledge in society; (5) the dynamic market processes generated by individual action, especially entrepreneurship; (6) the function of the price system in transmitting knowledge; (7) the supplementary role of cultural norms and other cultural products (‘institutions’) in conveying knowledge; and (8) the spontaneous – that is, not centrally directed – evolution of social institutions.

Whatever one's school of economics, it seems that if it ignores some or all of these things, it can't possibly be going a good job of capturing what's really going on. I don't know enough about Keynesianism to say categorically that it doesn't include all or even some of these things, but it's my impression that it doesn't, and certainly I haven't see any Keyensian make mention of them, and in particular that macro formula that seems to be 90% of Keynesianism that Garth and others have quoted and discussed on wc-talk which has about 5-6 aggregate-level variables.

Thursday, November 5, 2009

Rebranding "libertarianism"

I posted this as a comment on the Beacon, but decided it made for a decent enough post here, so I'll copy and paste it:

There's a reasonable argument to be made that a new term is required, that "libertarian" has so much baggage that it can never be resuscitated... The venues in which most people participate in any discussions aren't much more sophisticated than children's playgrounds and the rules for playgrounds seem to apply there, so that meaningless name-knockoffs like "libertard" actually seem to have a lot of (negative) influence on people who might otherwise be sympathetic.

"Classical liberal" isn't *so* bad but "liberal" has so much non-libertarian meaning attached to it now that I'm not sure it works. I see some merit in the term "liberaltarian" - when forced to give a label, that's usually what I use - but it may not be different enough from "libertarian" to work, and besides, it kind of represents one "half" of libertarians, squeezing out those more closely associated with "paleo-libertarianism".

The LP has made a huge mess of this branding. Their rhetoric is so "me-me-me" and "angry" that it alienates many who, as you say, are basically culturally liberal and fiscally conservative but don't see themselves as revolutionaries or rebels, just rather people who think fiscal conservatism and cultural liberalism are preferable to their alternatives. Calling yourself "the Party of Principle" amounts to an inference that if you aren't already in the LP, you don't have "principles", again alienating many who would otherwise be sympathetic.

It seems to me that what is needed is something much more lowkey and something much more positive-sounding and inclusive rather than embattled and angry; not just a term, but also the accompanying "elevator speech". Libertarianism and LP's focus on "force" is unintuitive and difficult to understand in a casual way; while I think that the principle is intellectually crucial, I don't think that intellectualism has to also be the branding.

The current association of libertarianism with a fierce individuality and focus on freedom is likewise counterproductive: people *want* to be part of collectives, we all understand that risks are less when we are parts of collectives, that there are economies of scale that come from collectives, etc. They see a disconnect between this individuality/freedom message and all the collectives that give them comfort: their family, their community, the company they work for, their clubs, their churches, their country and its national defense, etc. And "freedom" is a poor marketing message: it's too selfish. It is almost always described in selfish terms: "*I* should be free to do what I want to do...", etc. It gives an impression of irresponsibility, as people will fill in "you want to do what you want to do... and not be responsible for its consequences (and perhaps not anything else)."

A rebranding needs to be done that speaks simply to this huge group of fiscally conservative, culturally liberal people. It needs to speak in terms of what *they* get out of it, not what *you* get out of it. It needs to speak to an acknowledgment and even an embrace of collectives - voluntary, of course, but that can be in the fine print - and the sense of connectedness and responsibility that is important to them.

I am not a marketer, so I'm better at describing "requirements" than I am with coming up with a solution. The term that I've been kicking around the most - and I freely admit it has issues - is some variant of "Responsibility". The notion that freedom and responsibility go hand and hand is well known, but libertarian branding has focused on the former much more than the latter, and this may have been a branding mistake, for the reasons I give before. For the large section of people that are comfortable with and want to be part of collectives, who want the "safety nets" that come from collectives, etc., but just think that fiscal policy should be conservative and that government should stay out of people's personal lives, a focus on "responsibility" may work. In no way does it hint at a free ride, and it doesn't offend the sensibilities of those who *do* think that people should be "responsible" for helping other people in the sense that it's "the right thing to do". But "responsibility" captures the notion that no one can shirk their responsibilities by foisting them off on the government to do them; we have to take that responsibility on ourself. And because freedom and responsibility have to go together - you can't be responsible for something if you didn't have freedom to make a different choice - freedom comes along, including its manifestation in law and government.

Friday, August 7, 2009

"Trust us, we're from the government"

One of the things I run into with great consistency when I try to talk to people about alternate conceptions of social organization (besides the currently prevalent "nation-state") is their unbalanced accounting: they will dig hard and deep to find the most perplexing edge-case for the alternate system (examples include tragedy-of-the-commons type problems, "freeloader" problems, etc., problems that of course exist and are not nicely solved by the current system either) and when the answer isn't a slamdunk proclaim "aha! Your system is broken, conversation ended!", while seemingly not seeing the gargantuan mass of problems that the *current* system already has in widely demonstrable form. I wish I had documented *all* of them, just so I could return their remark with a list of thousands and thousands of not imagined problems or anticipated problems but *existing* problems, but I guess there's no time like the present to start.

To wit: what a surprise, an audit has found that police regularly misues police databases to look up data about celebrities. And yet, the same people that tell me how good the current system is and how bad an alternative would be will just go on assuming that somehow the people who work for government are "different" than eveyrone else, that government is "benevolent" and works "for the people", rather than seeing that there is no such as "government" as an entity, there are only people, the only agents in our society that take action are people, and whether or not people work for the government or not, they still have the same strengths, weaknesses, desires, self-interests, etc., as everyone else. Which is to say: any system designed with the notion that there will exist one "super class" of people that is above human nature and can be trusted to act benevolently even if they do not have sufficient incentives to do is designed from false assumptions and likely to be very dissappointing.

It is likely to end up, say, trusting that "super class" of people with more information and power than normal people and then expecting them not to use that information or power for their own uses.

And that's not theory: it is demonstrable fact. Read the article.