28 June 2011

Programming Note

I've basically been out of town the past week and am currently traveling this week.  This travel, plus some major issues in my personal life (my mom has cancer) have caused me to forego my normal posting.  RCB should have some scheduled posts this week, and I may post something at Allusions of Grandeur, but I doubt that I will feel like writing for this blog.  On the plus side, I've been able to get a ton of reading done in the past week+, so I should have a decent number of book reviews when everything gets back to normal.

22 June 2011

Crime and Punishment

Reason Online has a smattering of articles highlighting just how terrible the American justice system has become.*  The problem, if stated briefly, is that the current criminal justice system has led to a large of number of wrongful convictions while being extraordinarily inefficient and inhumane.  Additionally, there are many who are prosecuted for crimes that don’t have victims.

Of course, the high conviction rate in general has led to a lower crime rate, so there are some benefits to the current system.  But much is left to be desired, and the current system simply begs the question:  what can be done to make the system better?

To answer the question first requires a definition of “better.”  In this case, better means designing a system that maximizes correct convictions, minimizes wrongful convictions, maintains a low crime rate, discourages the prosecution of victimless crimes, and minimizes social and systemic costs.  To this end, I propose overhauling the current system such that a)all criminal judges be democratically elected; b) punishment is pecuniary; c) jails exist primarily as debtors’ prison; d) criminal investigation is privatized; e) prosecution is privatized; f) legal defense is completely privatized; and g) there is a “loser pays” system.  Additionally, the government should be completely prohibited from investigating and prosecuting crime.

Criminal judges should be democratically elected in order to ensure that local judiciaries reflect the ethical and moral beliefs of the social order in which it operates.  As I have noted before, rule of law is an impossible dream, and there is no way to escape some form of rule of man.  This should not be ignored, and need not be a bad thing.  If a judge has to pass a ruling at the margins of the law, he should make a ruling that concurs with the morals of the majority of the people in his jurisdiction.

Punishment should be pecuniary and, along with that, retributive.  One reason for this is that some of the money generated can be used to offset system costs.  This occurs in a number of jurisdictions where those who are convicted have to pay court costs.  Since criminals are the ones who create a need for a criminal justice system, it is fair that they pay for the system.

Another reason for pecuniary punishment is, as noted above, to make restitution to the victim.  In the case of a judicial decision, the judge would determine how much the convicted defendant would pay to the victim.  If the parties settled out of court, they could determine amongst themselves how much the victim should receive.  Incidentally, this would encourage more settlements and plea bargains, which would reduce social and systemic costs.

Since punishment would be pecuniary, jails would not be needed for punitive measures.  Instead, jails would be used to ensure that the criminal paid the fines and fees he owed.  Jail stays would be brief for petty crimes and lengthy, if not indefinite, for major crimes.  Once the fines were paid, the criminal would be free to leave.  The length of his sentence would be entirely up to him.  This also helps to put caps on the government’s power to seize things, since it would be up to the criminal alone to decide if he wanted to sell his property in exchange for his freedom.  Of course, this system is inherently extortional, but it is more tolerable than the alternatives.

Investigation should be privatized so as to ensure that victims seek out investigators.  Having victims bear the initial costs will help to ensure that the system is not bogged down by very petty crimes.  It also ensures that crimes with low probability of being solved do not waste resources.  It is easy to feel that all crimes are deserving of investigation, and that no crime should go unsolved, but the simple fact of the matter is that this world is imperfect and there are not enough resources in this world to ensure perfect justice.  Private investigation helps to encourage a more prudent allocation of resources.  It also helps to eliminate some of the violent excesses of the police state.

Privatizing prosecution has the same effect as privatizing the police.  In addition, it helps to minimize the number of wrongful convictions because the prosecution would have fewer powers under this system than under the present system.  Quite simply, prosecutors would not have the ability to promise snitches immunity, nor would they have any of the other powers to encourage people to testify falsely.

Legal defense should also be completely privatized.  This is done simply to minimize social costs.  Public defenders would be largely unnecessary, for reasons that will be clear later.

A “loser pays” component is the most important part of this proposed system.  If the case goes to court, whoever loses the case would pay court costs, defense costs, investigation costs, and prosecution costs.  This means that victims have a very strong incentive to find the correct criminal; it also means that the criminal has a very strong incentive to settle out of court, so as to minimize costs.  This will in turn reduce wrongful convictions, increase correct convictions, while decreasing the social and systemic costs.  Furthermore, a loser pays system ensures greater social fairness in that only those who impose social costs are obliged to pay for them.  In essence, those who make the system necessary are the ones who pay for it.

At this point, it should be obvious that the proposed overhaul would set a system of incentives in place that would meet the goals listed above.  The loser pays aspect of the system would ensure greater accuracy of criminal convictions.  Pecuniary punishment would not only help the victims, but it would also increase the cost of crime, which would help to maintain a low crime rate.  Privatizing the investigation, defense, and prosecution will increase systemic efficiency, reducing the social and systemic costs of crime.  And preventing the government from launching and/or paying for the investigation and prosecution of a crime will help to minimize, if not outright eliminate, prosecutions of victimless crimes.

* See here, here, here, and here.

21 June 2011

Change You Can Believe In

What’s going on with Barack “Open Government” Obama? His Justice Department has prosecuted more people for exposing government secrets than all the presidents from George “I cannot tell a lie” Washington to George “I cannot tell the truth” Bush combined. Compared to his predecessors’ three prosecutions in more than two centuries, Obama has added five in less than two-and-a-half years. Can it be that our “hopey-changey” president has more to hide?
The president’s latest attempt to put a civil servant behind bars for speaking to a journalist is a weak case at best. Stephen J. Kim worked for the Defense and State Departments on North Korean issues. After someone introduced him to Fox News reporter James Rosen, Kim let slip a CIA analysis of North Korea’s likely reaction to a United Nations resolution condemning its nuclear weapons and missile tests. The CIA correctly concluded that North Korea would tell the UN to go to hell and then conduct more tests. Was there anything controversial or life-threatening in leaking a rare assessment in which the CIA could take pride? The North Korea assessment contrasts with the CIA’s failure to predict 1956’s Hungarian revolution, 1989’s fall of communism in Eastern Europe, and 2003’s Iraqi popular reaction to the American invasion. Hey, they’re bound to get it right once in a while.

In a democracy, there should be no state secrets.*  The people elect representatives, and deserve to know what their representatives  are saying and doing on their behalf.  Note that representatives, by definition, represent someone(s).  Imagine how ludicrous it would be for someone who is travelling abroad to hire a person to represent him in the event of any domestic legal issues in his absence, only to be told by the person he’s hiring that he can’t get reports or summaries of representation.  And yet, that is essentially what the American government tells the American people on a daily basis, and they defend keeping citizens in the dark by invoking “national security.”

Thus, it is unconscionable for Obama (or any other politician, for that matter) to prosecute citizens for telling other citizens what the government is doing.  In fact, it is unconscionable that the government itself has to rely on third parties to tell citizens what it is doing.  So, instead of prosecuting these “leakers,” the government should be emulating them.

* I do not include military battle plans in the definition of “state secrets” because I first define secrets as hiding something that has already occurred.  Plans, by definition, deal only with the present and future, and cannot therefore be considered part of an ex post cover-up.

20 June 2011

Paragraphs to Ponder

S.M. Oliva sums it up quite brilliantly:

He’s right to attack the “selected but unelected few” as the real problem here. While regulators of all stripes claim the protection and “legitimacy” of the democratic system, in truth these folks are no more agents of democracy than a third-world dictator. Most people will cover their ears and repeat to themselves, “They’re just enforcing the law,” ignoring the reality that there is no law here, just vague mandates that are constantly subject to the changing whims of whatever bureaucrat happens to declare himself in charge that day.
When people accept schemes like zoning codes, what they’re saying is, “We value wealth-destroying bureaucrats over wealth-producing businesses.” It’s that simple. Because there’s no such thing as a regulatory scheme with 100% compliance. Even if nobody is breaking a given set of rules, the bureaucrats are compelled by the nature of their positions to manufacture violations — not only to justify keeping their present positions and salaries, but to ensure the potential for future growth in demand for regulations.

The sad part is how easily swayed some are by hyperbolic hypotheticals.  Sure, it’s possible that food processing company might put a heavy dose of cyanide in very can of peaches it ships.  But this producer is not going to stay in business for very long because the demand for lethal peaches is near zero.  (And since we’re here, wouldn’t “Lethal Peaches” be a great band name?)  The market is self-regulating in this sense.

Now, the market is neither perfectly efficient nor perfectly rational.  But saying that the market is not perfectly efficient does not prove that regulatory agencies are.  In fact, it does not even prove that regulatory agencies are more efficient, or better in any way.  Thus, the case for regulating markets as it is thus presented is invalid because the market is demonstrably superior to the state at regulating the market.

17 June 2011

Foreign Trade Revisited

The current support for free trade is based on the supposition of defending consumers from higher prices.  What the higher prices would indicate, if they were allowed to occur, is that American production is being destroyed.  The laws of supply and demand would bear this hypothesis out because the cumulative effect of domestic economic regulation is to reduce supply of goods produced.  Since demand either stays the same or increases (population trends in America aren’t negative yet), the net effect will be increasing prices.

As noted, foreign trade counterbalances potentially rising prices by increasing the supply of goods offered.  Foreign nations do not have the restrictions on labor or environmental effects that plague American businesses, which means that they can produce goods cheaply, enabling them to remain profitable.

Foreign trade, then, redirects consumption away from American producers, who could be competitive if the government allowed them, to foreign producers.  Free foreign trade policy coupled with oppressive domestic regulation has the same effect as direct subsidization of foreign business, which begs the question:  why is the American government subsidizing foreign business?

The answer is not particularly clear-cut.  Most conservatives who support free trade don’t view it as subsidizing foreign producers; they view it as defending consumers.  And most leftists don’t view foreign trade as a way of destroying business; some see it as imposing proper regulations on business.  Actually, leftists are all over the map on this.  Pro-union leftists oppose foreign trade; enviro-leftists either support it as a way to encourage raising foreign environmental standards while some oppose it as a way to encourage raising foreign environmental standards.  It might help to note that Bill Clinton signed NAFTA into law, and Paul Krugman has written a book defending free trade.

Additionally, multi-nationalists generally support free trade because it destroys national identity and power, and because it undermines the American economy.  Of course, some of the latter is America’s own doing:  there’s no need for America to handicap its own business with high taxes and excessive regulation.
At any rate, the current policy of foreign trade is quite damaging to the American economy.  This does not require import quotas and high tariffs per se, but it requires that foreign producers be held to the same standard as domestic producers if they wish to sell in America.  To have a policy which grants special advantages to foreign producers at the expense of local producers is simply asinine.

Two Things

Other studies also indicate a need for shorter IP terms. In “Why a Seventeen Year Patent,” C. Michael White describes the historical basis for the seventeen-year patent term and proposes shortened terms. Merges & Nelson, in “On the Complex Economics of Patent Scope,” pp. 868–70, argue that most economic models of patent scope and duration focus on the relation between breadth, duration, and incentives to innovate, without giving serious consideration to the social costs of greater duration and breadth in the form of retarded subsequent improvement.

The bottom line is that even arguments with pro-IP assumptions imply that the patent term should be cut in half and the copyright term slashed by at least 85 years (Amazon CEO Jeff Bezos favors reducing some patent terms to 3–5 years). This is one reason I have argued that any serious IP reform should include first and foremost a significant reduction in the patent and copyright terms. Unfortunately, IP reform efforts never reduce patent and copyright terms, which is one reason I have argued that these reform efforts are not serious or radical at all. [There are minor edits for sake of readability and emphasis.]

There are, I think, two things that can be done right now that would improve IP law.  The first is to do as Kinsella has noted and reduce the length of copyright and patent terms.  I’ve already addressed this, so I will simply note that a reduction in the length of terms should yield an outcome where social benefits considerably outweigh the potential costs.

The other thing that can and should be done is to make the system opt-in.  I believe this is more or less the case with patent law, in that one must actually take the time and effort to apply for a patent, but copyright law is a little bit muddled.  One can receive copyright protection for a work even if one does not register it, although one must prove the work was original.  It also appears that every intellectual creation is implicitly covered by copyright, so the system may not even be opt-out at this time.

If copyright were opt-in, then, creators would have to actively register their creation, which would help to decrease some of the system’s repetitiveness and banality.  This would also lead to a larger number of copyright-free materials, which should in turn lead to more systemic creativity.  At the very least, making copyright opt-in would reduce systemic costs and increase systemic efficiency and creativity.  It would also help consumers save money.  Small wonder, then, that talks of overhaul trend towards a more draconian definition of IP.

16 June 2011

The Market Distortion of Corporations

I’ve been meaning to write this post for nearly a month, but I didn’t feel like getting around to it until I saw this post by OneSTDV:
In general, the mainstream Right views corporations as unassailable edifices of the free market. They triumphantly brag about shopping at big chain stores and express indifference towards corporate influence. Yet, the reactionary Right doesn't quite share this position or at least shares a tempered optimism towards the benefits of corporate dominance. In my opinion, the mainstream's defiance regarding criticism of big corporations is part of their frustrating adherence to the proposition nation. Instead of espousing a straightforward nationalistic and traditionalist conception of America, mainstream conservatives use proxy indicators, such as guns, religion, libertarianism, and corporatism, to illustrate their right-wing bona fides.
I used to defend corporations as the cornerstone of the free market until I was introduced to the reality of corporations by the Austrian school of economics.  Wikipedia provides an excellent summary of why corporations are ill-equipped to serve as the bastions of the free market:
A corporation is a legal entity that is created under the laws of a state designed to establish the entity as a separate legal entity having its own privileges and liabilities distinct from those of its members.  There are many different forms of corporations, most of which are used to conduct business. Early corporations were established by charter (i.e. by an ad hoc act passed by a parliament or legislature). Most jurisdictions now allow the creation of new corporations through registration.
An important (but not universal) contemporary feature of a corporation is limited liability. If a corporation fails, shareholders normally only stand to lose their investment and employees will lose their jobs, but neither will be further liable for debts that remain owing to the corporation's creditors.
The important thing to take away from this is that corporations are government-defined entities.  The only reason corporations exist is because businessmen decided to cozy up to the government, which is not exactly the free market in action.  As such, corporations serve as a market distortion in a variety of ways.

In the first place, the existence of the corporation shifts moral hazard from business owners to consumers, which effectively means that consumers bear the market risk that rightly belongs to corporations.  This can be seen in the area of business contracts, most notably sales contracts.  Without going into highly technical details, English common law dictated that consumers have the right to expect explicit and implicit guarantees of performance and safety for whatever product they bought.  If a consumer buys a product that doesn’t perform, or a product that causes injury during intended use, the producer would be liable to the consumer for failure to perform or for incurring damage.  If a producer made an incredibly shoddy product, he could go completely bankrupt.

The possibility of personal bankruptcy helped to ensure that producers manufactured products that met a basic level of quality.  The formation of the corporation limited this incentive in that business owners no longer bore unlimited liability for their products.  This shift, then, meant that business owners could make products that were “riskier,” in the sense that they could manufacture products that were more dangerous or liable to underperform without having to face the risk of personal bankruptcy.  As such, the invention of the corporation has had the effect of shifting moral hazard from businesses to consumers, which is effectively a type of subsidy and a virtual tax.

A second effect of the abstract legal entity of the corporation is that it created a paradigm wherein people began to think that corporations pay taxes.  In fact, there has never been a point in history where abstract legal entities have paid taxes.  Only people can pay taxes, but there are some who think that corporations can pay taxes simply because those in the legal system have at one point argued that a corporation is a type of person.  This has led to incredibly muddled tax policy, which has been discussed in detail prior on this blog.

In the third place, corporations require increasing government intervention into the market.  This is due to the inherent subsidy of corporate status.  All subsidies impose some sort of negative externality, which leads to negative market distortions.  In this case, the status of corporation does not discourage risky production as much as it should, which leads to corporations making either shoddier or more dangerous products. 

Consumers demand, quite legitimately, that the government fix this problem.  Since governments are generally allergic to owning their mistakes, and are generally desirous of increasing their power, they seize this opportunity to regulate businesses in order to ensure that they meet production quality and safety standards.

Incidentally, the worker side of the equation deserves discussion as well.  Not only does corporate status limit a producer’s liability to consumers, it also limits its liability to workers as well.  Corporations can, to a limited extent, ignore the safety of their workers because they do not bear personal liability for whatever harm befalls them in the course of normal work. The poor working conditions of the industrial revolution can therefore, to a very limited extent, be blamed on the corporate status of businesses.

Anyway, the history of the corporate entity has shown that the original distortion has led to many, many more distortions, always in the name of correcting some “market” flaw.

Finally, note that corporations have had the effect of transferring power and wealth to those who are already wealthy.  There is no debating the fact that many corporations suckle at the government’s teat.  This should not be surprising, given that the only reason corporations exist is because businessmen went to the government to ask for special market privileges.  As such, those who own corporations have been seeking, since day one, to use the government to make them wealthier, and to help them beat the market.

At this point, then, it should be obvious that corporations are not, and indeed have never been, the free market’s friend.  In fact, corporations are as free market as the government that grants and defines their continued existence.  Corporations are an inherent market distortion, and should be recognized as such.

14 June 2011

On Free Trade

Vox has recently leveled his formidable intellectual barrels at free trade (see here, here, and here).  The conclusion that he has reached has been that free trade has had negative effects on the American economy for the past several years, and that the Ricardian theory upon which the defense of free trade rests is largely bunk.  He is correct in both these assessments.  However, there are a few things that need to be clarified.

First, the macroeconomic approach to free trade is different from the microeconomic approach.  Vox’s argument rests on determining the ratio of imports to exports, which is the mainstream view.  The microeconomic approach is to simply acknowledge that there is an exchange takes place, usually of currency for a good or service.  The exchange is considered to be equivalent, in that the two parties consider that which is traded to be of at least equal value to what is being received in exchange.  Thus, trade is always in a state of balance.  It should be noted that the microeconomic view of trade balance is a tautology.

In the second case, Vox’s argument is based on macroeconomic reality, not microeconomic theory.  The reality of American trade is that we are running what is defined to be a trade deficit, due in no small part to being willing to import cheap goods into the country.  This has, in turn, shifted manufacturing jobs overseas.  This is a matter of fact.  Furthermore, Vox would be correct in recommending a tariff or a quota system as a way to remedy the trade deficit.

Third, it should be noted that it is economically foolish to pursue international free trade while maintaining a high degree of domestic market interventionism.  If the government is going to mandate, say, a minimum wage for all workers, then domestic workers are legally prohibited from competing with foreign labor on price, to a limited extent.  Having partial market freedom is just as distortive as complete market intervention.  As such, it is entirely reasonable to hold all producers to the same production standards, whether said producers happen to be foreign or domestic.  Karl Denninger, for one, has recommended wage and environmental parity tariffs, which are the entirely logical response to domestic market interventionism.  Quite simply, it is utterly asinine to support free international trade without also supporting free domestic trade.  And it is even more foolish to show stronger support for foreign trade than domestic trade, especially if the one showing support is the government.

Fourth, it should be noted that “free trade” is a bit of a misnomer.  “Foreign trade” would be a more accurate description, for most of what passes for free trade today is actually governmental interference.  One of the most famous examples of “free trade” of the last two decades, the North American Free Trade Agreement, begs the question:  if this is really free trade, why are the governments in three different countries involved?  Tautologically, free trade needs no governmental interference, regulation, or oversight.  In fact, it only requires that the government get out of the way.  Getting out of the way does not require prolonged discussion with foreign governments.

Professor Hale objected to Vox’s claims, saying essentially that people should be free to trade with whomever they want.  I agree with this assertion as well.  However, there are a few things that need pointed out here as well.

First, using microeconomic theory to argue macroeconomic policy can be troublesome, especially if one does not account for the relevant alternative variables.  I cannot tell if this is the case with Professor Hale, mostly because I have only been reading his blog for a rather short amount of time.  I assume that he supports a free domestic market as well.  I will simply say, then, that if one is going to support free foreign trade than one must first support free domestic trade.

It should also be noted that most online arguments do not easily lend themselves to hyper-qualified, highly nuanced arguments.  Trying to explain how one’s foreign trade prescriptions are identical to one’s domestic trade prescriptions takes time, and doesn’t always strike directly to the heart of the matter.  In Professor Hale’s case, it appears that he supports market freedom both internationally and domestic.  Unfortunately, given the nature of online debate, his defense of freedom comes across as supporting international trade.

At any rate, these are my thoughts, thus far, on international trade.  I’ve addressed this subject before, but since the debate seems to be breaking out again, I decided to revisit it.  One other thing that I think is worth mentioning is that ideals should be given their proper place.  In this case, freedom and prosperity are the ideals.  These ideals should neither be ignored nor used as a substitute for reality.  Instead, they should be principles by which one makes policies in light of the current reality.

09 June 2011

Hollywood is to the First Amendment as Crying is to Baseball

In spite (or perhaps because of) graduating from Harvard Law School, Ben Shapiro does not appear to have any familiarity with the actual First Amendment.  How else can one explain this nonsense:

It is time for Hollywood's free speech advocates to be counted. Where is Norman Lear, the founder of the Caucus and the liberal First Amendment organization People for the American Way? On Tuesday afternoon, I left him a message; I hope to hear back. So far, nobody on the left has spoken out clearly against such discrimination or in favor of an end to it. The same industry that fought blacklisting of communists tooth and nail seems content to allow blacklisting of traditional conservatives in Hollywood.
We will not stand for it. Americans want our culture back -- and we want it shaped by people from all sides of the political aisle. Discrimination in employment based on political orientation is a deep injustice, and a deeper act of hypocrisy on the part of Hollywood. The actions of Lionel Chetwynd are only the beginning. Beginning this week, the crusade for a free and open Hollywood starts in earnest. It will not end until Hollywood becomes a First Amendment town once again.

Maybe I’m being especially dense, seeing as how I’m only an armchair constitutional scholar, but I’ve scoured the first amendment dozens of times and have to see how it applies to Hollywood.  For those who need a refresher course, the First Amendment of the United States Constitution says:
Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances. [Emphasis added.]

Note who is specifically prohibited from abridging the freedom of speech:  “Congress.”  No other institution is explicitly prohibited from abridging speech.* Hollywood is not prohibited from abridging the freedom of speech.  The Washington Post is not prohibited from abridging the freedom of speech.  No private individual, organization, or entity is prohibited from abridging speech.**
As such, the first amendment does not apply to Hollywood.  Hollywood, insofar as it exists as an anthropomorphic entity, can hire and fire whomever it pleases.  Hollywood is under no obligation to hire anyone, nor is Hollywood under any obligation to give any or equal time to dissenting voices.***
Swap in “talk radio” for “Hollywood” and suddenly you sound like a neo-conservative.  That a neo-con political commentator is willing to make the same type of arguments, founded on the same flawed premises , as liberals do when discussing other media once again points to how there is little difference between liberals and neo-cons.

* Note:  A careful reading of the constitution would suggest that the power abridging anything to begin is reserved only for congress, so the federal and judicial branch would implicitly be prohibited from abridging freedom of speech.

** Although certain methods of abridging freedom of speech are prohibited, such as murder or assault, for example.

*** Of course, Hollywood advocates equal air time for liberals over media that conservatives own.  Yes, this makes them hypocrites.

A Day in the Life (of a Slave)

Here’s a story for you:

Kenneth Wright of Stockton, California was almost knocked down by a S.W.A.T. team breaking down his door one morning. He says they then handcuffed him and put him in the back of a police car. 
Federal agents confirmed that the Department of Education was behind the raid on Wright's house. They were in search of his estranged wife, who had defaulted on her loans.

Though Karl Denninger, Vox Day, and Professor Hale have all weighed in on this story, I thought I would briefly add my two cents worth.  Quite simply, this reminds me of a proverb:
The rich rules over the poor, and the borrower is the slave of the lender.

Quite simply, if you owe Uncle Sam money (seeing as how Uncle Sam guarantees the loans, this would essentially be the case) then this sort of thing can happen to you.  As a slave, you have no rights.  Your owner can do whatever he wants, and there is no recourse for you as a slave.  Think carefully before you sign the dotted line.

Book Review

Up From the Projects by Walter E. Williams

Walter Williams is one of a very small number of black right-libertarian economists, and his memoirs help to explain how and why he became part of this super-minority.  As can be imagined, his life is an interesting subject, one that fails to follow a normal trajectory.  Yet, there are plenty of lessons to be learned from his life.

In the first place, Williams was quite the hell-raiser when he was younger.  He was quite intelligent, to the point where he was too intelligent for his own good.  As such, he wasted a good portion of primary education playing pranks on his classmates instead of applying himself academically.  In spite of his attempts at self-sabotage, he managed to make something of his time in school.  This was due, in part, to the rigorous academic standards to which teachers held him and his classmates.  He was expected to use proper English.  He was expected to learn math, history, and a whole host of other subjects, and no excuses were made for his failure.  As Williams himself points out, one of the reasons blacks do so poorly today is simply due to the dumbing down of education, as if lower standards will improve outcomes.

Additionally, Williams was drafted into the United States Armed Forces.  He served in a variety of functions, but was still primarily a hell-raiser.  When he was stationed in the South, he realized how truly horrible racial standards were and made a point of protesting this in a variety of ways while in the army.  Fortunately, the army played a positive role in his life in that it enabled him to develop self-discipline as well as figure out what he wanted to do with his life.

After he left the army, he moved out to southern California with his wife in order to study economics at what is now UCLA.  He attained his Bachelor’s in economics and then decided to pursue a Master’s.  He nearly flunked out of his Master’s program the first semester, but he quickly got back on track and eventually attained a Doctorate in economics.  He would then go on to teach at a large number of universities and stir up plenty of controversy, especially during the 80s.  It was during this decade that he came into fame, due primarily to his then wildly unconventional views on race and public policy.

This book is not a conventional autobiography, in the sense that it does not provide a comprehensive view of Williams’ life.  Instead, Williams’ intended the book to serve as a brief glimpse of a black boy growing up in the Philadelphia projects in the 40s and 50s.  The point of this exercise, then, is to provide readers with a study in contrasts, from which they can derive their own conclusions.

08 June 2011

The Need for Systematic Logic

Thomas Armstrong makes an interesting observation:

Information from the external world is first funneled through the emotional brain before it goes on to the neo-cortex.  That means we have feelings about things before we think about them abstractly.

This would suggest, to say the least, that man is more a rationalizing creature than a rational one.  And since man reacts emotionally before he reacts intellectually, it stands to reason that man cannot be depended to act rationally at all times.

However, man is capable of using his intellectual side to overrule his emotional impulse.  One of the easiest ways to do this is by making use of a system of logic.

Systematic logic helps to mitigate the effects man’s inherent emotionality.  Note that feelings precede thoughts, which suggests that intuitive logic (a la “it feels right) is less than profitable for rational analysis.  A system of logic largely eliminates the role of emotions (which, it should be noted, may or may not be right), which enables man to overcome his emotional biases in favor of a more coldly rational approach to decision-making.

An objective system, then, can be used to overcome man’s natural tendency towards emotional response.  However, it cannot eliminate it entirely.  Man is an emotional creature with subjective tastes and preferences, and no amount of systematic logic will change that fact.  As such, a logic-system is a useful tool, but it should not be viewed as the ultimate value of human decisions and human life.

When They Say Jump…

As more automakers move towards adding social media in cars, Transportation secretary Ray LaHood, has a word of advice: Stop.
Speaking to The Wall Street Journal, LaHood said he is lobbying automakers not to add features that could distract drivers. “There’s absolutely no reason for any person to download their Facebook into the car,” LaHood said in the interview, showing a shaky command of social media terminology. “It’s not necessary.”
LaHood’s opinion on the matter is significant: He and the National Highway Traffic Safety Administration, which reports to him, can force automakers to stop adding social media feeds to new cars. He is also pushing for them to create public service campaigns against texting and driving. So far, two automakers — Subaru and BMW — have done so. BMW’s campaign, showing an overprotective mom who nevertheless endangers her kids by texting and driving, went live on June 3.

Whether this sort of interference is warranted or not aside, one thing is certain when it comes to the government:  today’s recommendation eventually becomes tomorrow’s regulation.

Book Review

Neurodiversity by Thomas Armstrong

In this book, Thomas Armstrong relies on his experience in medicine as well as his personal experience to make a case for a concept termed “neurodiversity.”  Neurodiversity describes an intellectual ecosystem that is rich in diversity, and is conceptually similar to biodiversity.  This term is important, Armstrong argues, because there is too much emphasis placed on neurological normalcy, which in turn leads to stigmatizing abnormalities.  Such stigmatism poses a problem in that it largely ignores the neurological gifts that the “differently abled” have to offer.

Armstrong briefly looks at seven so-called neurological disorders and examines the benefits each one brings.
The first disorder examined is ADHD.  Armstrong notes that ADHD is often associated with positive traits, particularly entrepreneurship and creativity.  He also notes that ADHD is somewhat of a misnomer, in that those with ADHD are actually quite capable of focusing for extended periods of time, in many case with more intensity than “normal” people would.  This suggests that sufferers of ADHD do not actually lack attention control, but rather they are often understimulated in school and at work.  Thus, ADHD should seek work and schooling that plays to their strengths which, as noted, are entrepreneurship and creativity.

Armstrong next examines the upside of autism.  He makes a compelling case that the symptoms of autists can be put to use in highly mechanistic or ordered areas of life, such as engineering or writing software.  Autists do have much to offer society, but they must carve out their own niche.

Armstrong also tackles dyslexia, depression, anxiety disorders, and low intelligence (as measured by IQ tests).  As before, he turns the standard views of these disorders on their heads.  However, one should note that this doesn’t mean that he glosses over or otherwise ignores the downsides of these disorders.  He simply does what might be considered a cost-benefit analysis and notes how these disorders can be used for social benefit.

While Armstrong takes a rather PC approach to defending the “differently abled,” he does make several good points about the failings of the modern American education system.  For one, this system is ill-equipped to handle neurological systems that differ significantly from those that function well within an industrial country such as the United States.  Additionally, there seems to be an ill-deserved prejudice against those who mental functions do not translate to high IQ scores.  Really, Armstrong’s critique of the modern American education system could be taken as a defense for homeschooling.

Additionally, Armstrong’s observations on the natures of so-called disorders sound like something an economist would, which simply means that Armstrong seems to grasp the concept of tradeoffs.  ADHD children have certain weaknesses, to be sure, but they also have certain strengths that are worth nurturing.  The same holds true for Autistic/Asperger people, chronically depressed people, and even among the non-retarded low-IQ group.

Anyhow, the broader point that differing gifts should be nurtured instead of eliminated is almost heresy among educators, for it is assumed that human neurology has an ideal instead of a spectrum.  As such, as sad as it sounds, the education system has spent an unfortunate amount of time trying to pound square pegs into round holes instead of finding square holes.  As such, neurodiverse individuals are short-changed by the education system and have diminished prospects as a result.  The saddest part is that this outcome could have been avoided and society would likely be better off as a result.  Thus, neurodiverse individuals have been sacrificed at the altar of conformity.

04 June 2011

The Market and Efficiency

Remarkably, the cost of air conditioning plummeted over the decades. The cost of air conditioning units declined, and they became increasingly reliable, safe, and efficient in turning electricity into relief from heat and humidity.
That is until recently. Twenty years ago I had an air-conditioning system (i.e., heat pump, HVAC system) installed in a house that was almost 1,000 square feet for $1,600. I just got the preliminary estimate, not an actual bid, to replace a system on a similarly sized house for $11,000. Not surprisingly, this is the reason for this article.

Thornton goes on to describe how government intervention on behalf of the environment has led to higher prices by mandating more efficient end-user systems.  This mindset is all too common among the environmentalist crowd, and belies a shocking amount of shallowness and ignorance.

(As an aside, the efficiency of end-user products and systems tend to be targeted the most by environmentalists because it is part of their pathology.  Like the group Opus Dei, at least as described by Dan Brown, environmentalists believe that one can only show penance by feeling pain and undergoing sacrifice.  As such, they target popular consumer goods in order to feel better about all the evil that man has done to the environment.)

If the environmentalists were truly concerned about protecting and saving the environment, their analysis would take into consideration not only the efficiency of the end-user product, but the efficiency of the production process of said product, the efficiency of transporting the product, the efficiency of selling the product, and the efficiency of maintaining the product, among other things.  Consumption of the product is not the only process that consumes energy and incurs environmental costs.

Production can incur massive amounts of environmental costs.  There is pollution, obviously, in addition to energy consumption, raw material consumption, and the energy costs of labor.  All these things require environmental resources.  Energy comes from coal or nuclear plants, which have their own forms of pollution and their own energy costs as well. Workers have to eat, have to drive to work, and generally wish to relax when not at work.  These desires have an impact on the environment.  Meeting stricter production costs generally requires more materials, directly or indirectly, and requires more labor besides.  Furthermore, new standards may lead to a net increase in pollution because they require more energy.

Besides that, the higher standards may mean that the product wears out more easily or quickly, requiring either repair or replacement. Both of these processes require a net increase in energy consumption, which is not good for the environment.  The former might require a repairman to drive out to someone’s house to make a repair, which does cost energy and lead to an increase in pollution.  The latter requires more units to be produced, which likewise requires more energy and leads to an increase in pollution.

As such, when environmentalists focus on the efficiency of end-user products, they often ignore the unseen environmental costs that new standards incur.  If only there was a way to gauge systemic efficiency.

Believe it or not, there is, in fact, a very easy way to judge systemic efficiency and that is by a market mechanism known as the “price.”   Prices signal to consumers the relationship between supply and demand for given product.  In this case, cold air within a closed system is the product, and prices let consumers know how much air can be provided relative to demand.

Incidentally, the market system encourages systemic efficiency because producers have an incentive to provide a given product for the highest price to consumers at the lowest cost to themselves.  This incentive is known as “profit.”

If there are two competing companies that produce identical products and one can produce their product with one-third fewer works and ten percent fewer raw materials, they can sell their product for a lower price and make a higher profit than their competitors.  Employing fewer workers helps reduce the strain on the environment by lowering the consumption of energy as would have been used for commuting.  Lower demand for certain raw materials also helps the environment in that less energy is needed because there is less material to extract, and so on.

Thus, the market serves the goals of the environmental movement quite well.  Unfortunately, most environmentalists are too dense to realize this, and thus focus their attention on obvious costs while ignoring the less visible costs.  Their superficiality, then, has led to outcomes that are worse for the environment.  
Therefore, it would simply be best to refer to environmentalists as earth-hating idiots, for they are nothing more than simpletons, unable to make any observations other than the most obvious and incapable of thinking abstractly and rationally for any length of time.  Quite simply, they are enviromorons.

What Took So Long?

MI6 has pulled off quite the accomplishment:

British intelligence agency MI6 hacked an Al-Qaeda online magazine, replacing bomb-making instructions with a recipe for cupcakes, The Telegraph reports.

The only thing I have to add here is that I’m surprised 4chan didn’t already do this.

03 June 2011

I’ve Got a Bad Feeling About This

Scott Adams notes the problem with an increasing number of people who don’t pay taxes:

We all understand that no entity can survive for long if it gives away its resources while asking nothing in return. And this leads me to my point: In the United States, 51% of adults pay zero federal income tax, and yet they have the right to vote. That’s the very definition of a system that can’t last.
I’m not sure where the tipping point is. So far, the power of the non-tax-paying majority has been blunted by the influence of political parties and the misdirection of the media. If the majority ever figures out that they can legally confiscate the wealth of the minority, tax rates will double overnight. My best guess is that the United States will go into a death spiral at about the point that 55% of adults pay no federal income taxes. We’ll probably get to that point as baby boomers continue to retire in large numbers. 

As Vox has noted, “It's not quite a legitimate analysis, in that many of those who don't pay any income tax do pay payroll taxes.”   I would also add that everyone pays certain federal taxes indirectly, like the taxes on automotive fuel, so even those living off government largesse don’t escape all taxes.  At any rate, Adam’s sentiment is largely correct, and is a sentiment shared by economists Thomas Sowell and Walter Williams, among a host of others.

Furthermore, the United States is definitely trending towards becoming a nation that has more taxtakers than taxpayers.  Consider the following chart from Zero Hedge:

Usage of food stamps over the last four years

If this trend keeps up, we will definitely be in trouble.

Good News from YouTube

YouTube is making it easier to navigate the world of IP:

If you’re in need of B-roll for your next YouTube opus, you’re in luck. YouTube is adding tons of Creative Commons content to its video editor. The new feature goes live today at noon ET.
YouTube’s editor tool, which launched last year, has been steadily adding features to make the process of creating videos fuller, says YouTube Product Manager Jason Toff.
You can access more than 10,000 videos (from C-SPAN, PublicResource.org, Voice of America, Al Jazeera and others) via the CC tab on the editor. You can also tag your own content as Creative Commons, so that other users can incorporate it into their videos.

Creative Commons licenses are the closest one can get to opting of the American IP system, and it’s nice to see that YouTube is making it easier for people to see what video clips are “free” and under what conditions.  I hope this fosters increased creativity, which should in turn provide real-world evidence that IP is intellectually stifling and counterproductive.

Reality and Constraints

Robin Hanson on capping systemic health care costs:

The United Kingdom, where, on average, people live longer than in the U.S., spends only about 9 percent of gross domestic product on medicine, compared with our 18 percent. The British control costs in part by having the will to empower a hard-nosed agency, the National Institute for Health and Clinical Excellence, to study treatments and declare some ineffective. Some hope the United States will create a similar agency, but I fear it would be hopelessly politicized and declawed.
My solution: admit we are cost-control wimps, and outsource our treatment evaluation to the U.K. Pass a simple law saying Medicare (and Medicaid) won’t cover treatments considered but not positively appraised by the Britain's national health institute.
Even better, use clinical evidence evaluations of the British Medical Journal. They’ve classified more than 3,000 treatments as either unknown effectiveness (51 percent), beneficial (11 percent), likely to be beneficial (23 percent), trade-off between benefits and harms (7 percent), unlikely to be beneficial (5 percent) and likely to be ineffective or harmful (3 percent). Let’s at least stop paying for these last two categories of treatments! And to put pressure on doctors to collect evidence, let’s stop paying for “unknown effectiveness” treatments after 10 years of use.

As I’ve said before, and will continue to say until everyone in this world understands, universal health care plans will never work.  Resources are limited, and no amount of political posturing will change that fact.   As Robin Hanson notes, there will come a point where the government must cut back on providing health care, and that’s because there are simply not enough resources available to make sure that everyone is always in perfect health.   Anyone who says otherwise is stupid, ignorant, or lying.