"The state is a machine for maintaining the rule of one class over another." --Vladimir I. Lenin in a lecture entitled "The State," delivered at Sverdlov University, 11 July 1919.
"It would thus appear that the State, instead of originating according to any of the conjectures made by English and American writers on the subject, originated as a class-weapon of conquest and confiscation, and that its primary function was, and still is, to maintain the stratification of society into the two classes noted [namely, "a relatively small, owning and exploiting class which lives by appropriating without compensation the labour-products of a relatively large, propertyless and dependent class"]." --Albert Jay Nock, "The State," The Freeman, 13 June 1923.
The current issue of Reason has a provocative discussion of the role of social justice in libertarian thinking. I believe the article deals with left leaning libertarians (nice alliteration) and the topic of "social justice". It is the set of beliefs that surround oppositing points of view on this all important topic that offer fertile ground for debate and, unfortunately, generate devisive rhetoric that often fails to advance a nuanced understanding of the processes that lead to change in society.
In a coincidence a friend from high school sent me the following note:
A bit confused. As I understand libertarianism, those that advocate for the party want VERY limited federal (and possibly state) government and wish to leave all decisions to the individual. Assuming I have accurately summarized the platform, wherein would the ability for government to redistribute wealth/privileges (or anything else for that matter) on the basis of so-called social (or any other) justice?
What the author doesn't say and what many of the left spout is that "the rich" hold the majority of the wealth in this country (and for that matter, the world). Of course, the BS part of this is that there is not a finite amount of money in the world and anyone is free to pursue and obtain as much as they're willing to.
Just curious. I refer to myself as a “constitutional conservative” advocating for a return to strict constitutional government. As such, I find myself in agreement with many libertarian beliefs only disagreeing in slight ways.
Great to hear from you. There is a wide diversity in libertarian thinking, just as there is in consitutional thinking. The libertarian party, just like other political factions would only represent a portion of libertarian thinking. That is, a great deal of interesing and provocative libertarian philosophy originates from sounces outside the party system or the institutions that surround parties and organized factions. Most libertarians would look to private individuals operating in a system of natural liberty that emphasizes freedom and personal responsibility to advance individual goals and dreams.
That said, except for anarcho capitalists/libertarians, most thinkers would advocate liberty and responsibility follow in the thinking of Adam Smith and view a limited role for government as essential for a free society. It is the role of government that generates interesting discussion.
Thomas Sowell argued in his book A Conflict of Visions that much contemporary political thought traces to one or another of just two conflicting worldviews. These worldviews he dubbed the "constrained" and "unconstrained" visions (Steven Pinker would later later call them the "tragic" and the "utopian" visions, respectively).
The difference, in brief, centers on what a person believes the limits of human knowledge and goodness are: If you believe humans are inherently flawed and fallen, and that, though they can make marginal improvements, imperfection and evil (even sin) will always be an abiding part of the human experience, then you subscribe to the "constrained" or the "tragic" vision. If, by contrast, you believe that humanity can be indefinitely improved, and that, with the right combination of institutions and leaders in place, most human vice can be eradicated, then you subscribe to the "unconstrained" or "utopian" vision.
I would fall into the "constrained" or "tragic" camp, both on religious and on empirical grounds.
I mention Sowell's argument here, however, because one of its implications is that disagreements between proponents of the two "visions" are intractable. They have different worldviews, and their political and economic positions are implied by those fundamentally different worldviews. That explains both why differences between the two groups can become so acrimonious, and it also predicts, unhappily, that there may be little hope for reconciliation. They will often simply have to agree to disagree.
Which brings me to today. The Obama administration is proposing to nationalize a significant portion of the health care "industry" (as it's called), and many supporters have not hidden their desire eventually to nationalize the whole ball of wax. For many of them this government takeover is required by their conception of justice. Significant numbers of detractors and critics, on the other hand, argue not only that this may increase inefficiencies and costs, but also that it violates their sense of justice to take health care choices out of the hands of individuals.
With President Obama intensifying his pressure for universal health care coverage, the debate is likely to become more heated.
So, drawing on the Sowell argument, here is my proposal for a compromise between the two sides: Pass the legislation, but include in it "opt-out option" for dissenters. Exercizing the opt-out option would mean forsaking any and all right to the care or coverage provided under the government's plan, but it would also mean no requirement to pay into it. Indeed, I would propose allowing an "opt-out option" for other government benefit programs as well, including Social Security, for example. Allow people who wish to be in charge of saving for their own retirement to opt out of the program, giving up any and all benefits, but not paying into the program either.
The biggest worry about my "opt-out option" is that such a number of people would exercise it that the program would not be able to sustain itself--and then the people who are intended to be the primary beneficiaries, the least advantaged among us, would once again be left in the lurch. I recognize and concede that worry. I have two thoughts in response.
First, my own conception of justice, which draws on the British and American liberal tradition, entails giving a tremendous deference to individual consent: if a person does not want to be part of my organization or my program, then I think I need a very strong reason to override his wishes. Imminent danger to national security, for example, might count, but the threshold should be that high.
Second, many people who could monetarily afford to leave the systems would choose not to. I have colleagues, for example, who would prefer to stay in Social Security or a nationalized health care system, if for no other reason than that way they do not have to bother with finding the "best" investment counselor or wading through myriad private health care providers and insurers. I expect many others would be moved by similar considerations.
Many people will also, out of their own sense of justice, wish to be a part of the systems even if they could afford to or would benefit from leaving, just as many people who could send their children to private schools choose for their own reasons to send them to public schools. Hence I think the number of people exercizing the "opt-out option" might not be as great as one might fear.
I confess, however, that even if I am wrong about the number of people who would exercise the option, I find the notion of respecting people's consent to be compelling nonetheless. If someone says "no, thank you, I want no part of your program," we can remonstrate with him, try to convince him otherwise, even beg, plead, or shame him; but if we insists, then I believe we must honor his wishes and let him go.
A blog that is concerned with Economics and Ethics:
About this blog Economics and Ethics is a group academic blog which we hope will allow us—and you, our readers and commenters—to:
1.Showcase and discuss new work in ethics-and-economics by scholars around the world, 2.Discuss ways to include treatments of ethics in economics education, 3.Announce new projects and initiatives in ethics-and-economics, including calls for papers for books, journals, and conferences, 4.Highlight the often ignored or overlooked ethical aspects of economic arguments, whether in the world of academia or policy, and 5.Have a good time! We (Sandra Peart, Irene van Staveren, Mark D. White, and Jonathan B. Wight) all believe that economics without ethics—whether in terms of theory, practice, or education—is tragically incomplete. But we do not subscribe to any one “correct” way to integrate the two, substantively or methodologically—each of us has his or her favored approach on these issues, of course, but we value the discussion above all.
We will strive to maintain a civil, respectful forum where ideas can be discussed and debated without becoming personal, with respect to each other, fellow scholars, or political figures (especially political figures). We look forward to vibrant discussion of the ethical aspects of policy without resorting to name-calling and ad hominem attacks. If you disagree with a policy position being discussed, by all means say so, but please keep the discussion focused on the ideas, not the person, organization, or party behind them.
Boyes points out the importance of adaptive efficiency and the role that trial and error plays in growth and development in his post Energy Wars. The disaster in Japan continues to reverberate illustrating the ubiquitous nature of risk and uncertainty. Just as no one can anticipate the types of energy that will emerge in the futures, no one can anticipate the future costs and benefits of existing energy sources - these future flows will be impacted by the indeterminate path that society takes.
As a result of this uncertainty an open access society that tolerates or even incentivizes trial and error will, in the view of North and others, make larger strides in growth and development than will those societies that are more risk averse and make institutional efforts to curtail trial and error.
In previous blogs I have argued for the importance of failure. It is through the error in trial and error that societies acquire important information and, this error is a powerful incentive in the feedback loop.
Nuclear power may or may not be a high order solution to energy needs, but the key point here is to allow a full portfolio of energy options to be explored in the market. It is, as Hayek argues, the process of trial and error in a competitive environment that leads to discovery.
Future inhabitants of the planet will most certainly be impacted by decisions made today. Allowing for a wide ranging set of energy experiments - most of which will fail - is the legacy that the discovery component of the competitive process leaves to those who are yet to come.
I also think that along with the trial and error element of an entrepreneurial society a historical perspective is useful. In thinking about energy sources in 19th century America it is important to recall that water and human power remained key energy sources up to 1900. Steam and electricity, as the newly emerging technologies, had to overcome a number of costs and obstacles which took time.
The Schumpeterian creative destruction is a process that both takes time, is opposed by those who are content in the present and imposes a current cost on society that is offset by large future benefits.
I just finished reading a book, Energy and Climate Wars by Glover and Economides, that is timely given the problems in Japan and the media's focus on the nuclear "meltdown". I started the book both because it had just come out but in my executive MBA class several students had scoffed when I noted that nuclear uses less water than solar and that fracking would prove to be the U.S.'s way to gain energy independence. A student told me that his child had just been shown a movie, much like Al Gore's "An Inconvenient Truth" that prosletizes against anything other than solar or wind. The video focused on fracking, the process of drilling 10,000 feet below the surface and then several hundred feet sideways to reach shale rock. The rock is then bombarded with high pressure water and chemicals that fracture the rock. This enables the oil and natural gas there to be pumped to the surface. The proces is relatively inexpensive given new technologies and uses about the same amount of water as current large scale solar farms. The environmentalist groups have attacked fracking as environmentally dangerous, creating monsters out of animals and damaging drinking water. The student was shown a faucet where the water coming out of it could be lit on fire. Of course, the video did not mention that there are such water sources today where no fracking occurs. It did not mention that it is impossible for the fracking chemicals to seep up 10,000 feet to reach water aquifiers. It simply scared the kids.
The media's response to Japan's nuclear problem is meant simply to scare people. And it is effective. Look at the number of people in California purchasing iodide pills. But, according to nuclear physicists I have read and listened to, the meltdown is not a problem to health. It merely means the utility that owns the nuclear plant will take a big hit. The nuclear plant is ruined. Very little radiation is supposed to leak out even in a meltdown and that that does leak is due to the venting of hydrogen to reduce pressure inside the dome and enable cooling water to be injected.
The cost per kilowatt hour of power generated by various power sources implies that nuclear would be less costly than virtually anything other than hydro power. Moreover, nuclear could generate the huge quantities of power necessary, something that wind farms and solar farms can not do.
James R. Otteson: Smith's TMS and WN: "GMU economist Pete Boettke asked recently, GMU economist Pete Boettke asked recently, "What reasons would you postulate as to why [Adam Smith's] The Theory of Moral Sentiments came to be under-appreciated in ethics and philosophy, and the interpretation of The Wealth of Nations came to be constrained and distorted in economics and political economy?"
This is an interesting question to raise. I responded to his question on his blog, but I thought I would re-post my thoughts here as well. Here is what I wrote:
You're asking a few different questions, Pete. One is why TMS's influence faded and was eclipsed by WN. Another is what the connection between the two books is. A third is why people thought--and some still think--that there is a tension between the books.
Several things combined to explain the phenomenon addressed in the first question. I'll mention two: one philosophical, one psychological.
The philosophical explanation is that philosophers came to see TMS as lacking in a serious way, namely in providing a bona fide source of moral normativity. TMS looks for all the world like an empirical investigation into the mechanisms that give rise to moral judgments and into the factors that account for three phenomena: (1) the fact that all (or almost all) human beings transition during their lives from amoral infants to highly moralized adults; (2) the fact that all (or almost all) human societies generate a rough consensus about wherein morality consists; and (3) there is a significant overlap among the respective moral consensuses various human societies adopt.
The problem is that, irrespective of whether Smith's proposed explanations of these phenomena are correct, it's not clear that Smith provides any way for people to critize moral orders. If our moral judgments arise the way Smith describes, as the unintentional results of people attempting to serve their ends in the company of others, then that seems to reduce moral judgments to the status of mere strategems. It makes them hypothetical, rather than categorical, imperatives. And moral philosophers like their categorical imperatives. (Remember, too, that Kant was about to come onto the scene, and his attempt to ground categorical moral imperatives--partly in response to Smith's (and Hume's) challenges--came to dominate moral thought. Smith's program is very different from Kant's in its aims and methods, and thus Smith's program came to be seen as alien, not really moral philosophy at all. It was thus relegated to other disciplines like psychology or anthropology, or to the dustbin of history.)
The psychological reason, at least for the latter half of the 20th century in the British and American world, is that Smith is associated with a political and economic order that the vast majority of academics find distasteful, even morally repellant. It is psychologically very hard to separate the two. It's like asking people to consider whether Mein Kampf has any redeeming literary virtues. As a result, most people will not even read, let alone seriously consider, anything Smith wrote. Moral philosophers who are interested in the "Smithian" program would rather read Hume than Smith, since Hume is not associated with capitalism. (Humanities scholars who work on Smith must constantly combat the initial "why on earth would you work on HIM?" question, before getting people even to consider any substantive issues.)
A quick thought on why people might think there is a tension between TMS and WN. WN does not mention TMS; it does not discuss the "desire for mutual sympathy of sentiments" or the "impartial spectator"; it does not mention any of the cardinal virtues TMS described; and in the Index Smith prepared for WN, it identifies "self-love" as "the governing principle in the intercourse of human society." Moreover, there is none of the theological language in WN that was present in TMS. It's almost as if two different people wrote the books--a curious fact since Smith was revising them side by side throughout most of his adult life.
In a book of over 1000 pages, one would think there might be some discussion of the connection between Smith's only two books. Indeed, one might expect that there would be a deep and extended "conversation" between the two books. Alas, there is none of that.
That doesn't mean the two books don't go together or can't be reconciled. But it does mean, I think, that it's not simply foolish (as some claim) to suggest there might be an interesting tension here.
Pratt posted the article reporting that only 53% prefer capitalism over socialism. For years I have wondered why that occurs. Under free markets and voluntary exchange everyone gains -- all goods and services are produced at lowest cost and all purchases are made at lowest possible price. When government intervenes in the free market, economic growth slows, resources are misallocated, the well off stay well off and the poor remain poor. Yet, in survey after survey over the last twenty years I have found that people prefer the government to allocate scarce goods and resources whenever the good or resource is important -- health care, organ transplants, roadways, zoning, and on and on. When the good or resource seems unimportant, then people choose to allow capitalism and free markets to do the allocation -- berries at the store, candy, etc. That just doesn't seem to make sense on the surface.
But, as with most topics in economics we must examine Bastiat's broken window fallacy and concentrated benefits and diffuse costs. With Bastiat it is the unseen that bolsters capitalism and the seen which apparently bolsters socialism. The rate of growth of an economy, the increases in standards of living, the increased quality of goods, medical care, and everything else in an economy is not seen. It is instead, the "unfairness" of some getting something and others not, or of people losing jobs to better technologies or new products or new ways of doing things, that is seen. Of creative destruction it is the destruction that is seen not the creation.
Moreover, interference with markets for transferring wealth and income from some to others occurs because it benefits a few a great deal and harms everyone a little. While the free market enables anyone to achieve, to prosper, to improve, it also continuously seeks to reduce the monopoly profits, the barriers to entry, the power of a few.
Is there a solution? Are we doomed to all live in socialistic systems? I posted previously about the inevitability of democracy to lead to larger government, I can not think of a political system that won't lead to bigger government. As Thomas Jefferson noted, we need an awakening, a new beginning, a revolution to occur every generation.
James R. Otteson: He Said It: Oakeshott:"To govern is to turn a private dream into a public and compulsory manner of living. Thus, politcs becomes an encounter of dreams and the activity in which government is held to this understanding of its office and provided with the appropriate instruments." --Michael Oakeshott, "On Being Conservative," reprinted in Rationalism in Politics and Other Essays (1962)
Whenever I visit Berkeley — in particular certain upscale areas populated by academics and wealthy intellectuals — practically everyone I see has this creepy look on his or her face. It’s hard to describe, but once you’ve seen it enough times it’s unmistakable: a special kind of conspiratorial smugness, a faint “knowing smile” coupled with a glance that conveys a sense of not just personal superiority, but of mutual superiority. In an instant, the Berkeley expression communicates to everyone in the vicinity, “Isn’t it great that you and I and all of us here are morally superior to the rest of the world?”
Heyne’s perspective is especially important because of his unique background in both ethics and economics. He was an excellent economist, but his Ph.D. was from the University of Chicago Divinity School, and he continued to read widely in ethics, political economy, and theology throughout his lifetime. Thus, his writings are particularly effective in using his understanding to explain economics to ethicists, especially to Christian theologians.
Because Heyne believed that the positive-normative distinction that many economists make is false and that economics is profoundly normative at its very base, his essays can thoughtfully engage those who criticize the ethics of economics on their own grounds. Heyne draws a distinction between personal relationships and the impersonal workings of the market. He argues that most ethicists, with their focus on the actors’ intentions, fail to understand the impersonal nature of markets and the positive outcomes that result when people pursue their own objectives with little knowledge of others’ goals. The failure to understand the distinction between the personal and the impersonal keeps most ethicists from understanding how markets work and how a social-coordination system based on private-property rights and prices is both morally defensible and socially useful. In fact, in the world of impersonal market relationships, if everyone focused on the needs of others, the results would be disastrous: the system would “come to a halt, at enormous cost to all participants if they were to act consistently on the principle of advancing the welfare of the most needy or most worthy—rather than focusing on the accomplishment of their own personal goals” (p. 33).
Justice is nevertheless important, and Heyne developed a well-articulated standard of justice for the world of impersonal markets. Rule-coordinated behavior enables social cooperation to occur among people who do not know each other well, and the rules that work the best in this situation are “clearly defined and readily exchangeable property rights” (p. 178). Efforts to replace the rule of law with direct government intervention usually produce injustice. “The justice or injustice of a social system will not be found in the pattern of outcomes it yields—its end states—but in the procedures through which those outcomes emerge. This is simply the only kind of justice of which social systems are capable” (p.182).
A defense of markets and private-property rights must also deal with the Homo economicus assumption that economists use in explaining and defending the workings of the social-coordination process. Most ethicists and some economists believe that the basic model of analysis assumes that people act only from selfish and hence immoral motives. Heyne strongly disagreed, arguing that the operating assumption is one of purposive, not selfish, action.
In that system of social interaction we call a market economy, decision makers focus their attention on changing money prices. Their motives in doing so are infinitely varied and complex, and are no more likely to be selfish or otherwise morally objectionable than the motives of people at a church picnic or university lecture. The principle consequences of their behavior is ongoing mutual accommodation among millions of people who do not even know of one another’s existence, but who are nonetheless dependent on one another for the basic necessities of life as well as the innumerable luxuries to which they have become accustomed (p. 41).
Although economists focus on monetary measures of value, they do so because explaining how exchange works lies at the heart of their discipline, and the use of money greatly facilitates exchange. In making this argument, Heyne is also contesting another common assumption of economics—that the discipline is defined by its assumption of scarcity. He does not dispute that scarcity drives economizing behavior, but the interesting result is the process of exchange. In the right institutional framework, dealings across space and time occur, and people who know little or nothing about each other focus their attention on activities that work to the advantage of those unknown others.
Even though Heyne rigorously defended both markets and the economic way of thinking from most of the charges leveled against them, he believed that people should take seriously one cogent moral criticism of commercial society. Economists focus on the world of impersonal exchange, but it does not follow that the world of personal relationships is unimportant. Market dealings may give rise to the depersonalization of social relationships. Because of the ease of exit from social relationships that do not please us in our modern, price-coordinated world, our choices may cause us to move away from “those face-to-face institutions in which individuals are socialized and values are nurtured” (p. 77). This argument is not, in Heyne’s view, a reason for greater government intervention in the economy; in fact, most government actions only exacerbate the problem of maintaining social capital.
I recently read a provocative view of government failure v government success. The speaker indicated that liberty and responsibility suffer more when the perception exists that the government succeeds. This encourages further government activity - in both the "successful" arena and in others.
If that is the case, lets hope that his government program is not successful.
The Mass Production of Credentials: Subsidies and the Rise of the Higher Education Industry By Carl L. Bankston III This article appeared in the Winter 2011 issue of The Independent Review
The percentage of Americans with college degrees has more than sextupled since 1940, due to the growing popularity of the idea that everyone should get a college degree and that federal subsidies should support the attainment of this goal. Unfortunately, this trend has dumbed down the college classroom, promoted credential seeking at the expense of the liberal arts, and fostered false expectations that harm students and the general public alike.
This long and interesting post looks at the impact of education on egalitarianism. As I read the post I wondered at the absence of the economic way of thinking, specifically the failure of the blogger to consider the costs of egalitarianism in general and an educational system that shapes society toward this "goal".
Given the previous 3 days of posting here, I wonder if the blogger might be overconfident in his assumptions regarding the role of education in shaping "progress" toward this blogger's desire for egalitarianism or the more useful outcome of economic growth.
The post concludes: So it isn't really possible to answer the simple question with a simple answer: do modern educational systems in democracies level inequalities or increase inequalities? It would seem that they do some of both; they provide access to disadvantaged people who can then leverage success for themselves and their families, and they also create mechanisms of recruitment into elite organizations that are anything but egalitarian.
I recently listened to this talk (you can download a podcast if you don't have time to watch.
Nye does a wonderful job of:
1. Describing and applying the economic way of thinking 2. Describing and applying new institutional economics 3. Applying the above to a case - the Phillipines
Nye references neo-classical economics, Douglass North, Paul Romer, Paul Krugman, Eleanor Ostrom, Adam Smith and development and growth theory from the perspective of institutional analysis.
I have been discussing civil discourse, the economic way of thinking, the gap between theory and practice and the limitations of markets in a free and responsible society. This podcast is, upon reflection, an accessible, civil and thoughtful effort to address a broad audience.
Taking Institutions Seriously: The Real Lessons of New Institutional Economics for Development by John Nye on December 08, 2010 Are we all institutionalists now? What should development agencies really learn from the New Institutional Economics? Nye discusses the impediments to growth in underdeveloped countries and explains why most reform attempts ignore the most important distortions in poorly functioning economies and misunderstand the incentives facing both donors and recipients.
Intellectual effort and academic rigor, in the minds of many of the nation’s college students, is becoming increasingly less important. According to the authors, Professors Richard Arum of New York University and Josipa Roksa of the University of Virginia: “Many students come to college not only poorly prepared by prior schooling for highly demanding academic tasks that ideally lie in front of them, but — more troubling still — they enter college with attitudes, norms, values, and behaviors that are often at odds with academic commitment.”
Students are hitting the books less and partying more. Easier courses and easier majors have become more and more popular. Perhaps more now than ever, the point of the college experience is to have a good time and walk away with a valuable credential after putting in the least effort possible.
The authors cite empirical work showing that the average amount of time spent studying by college students has dropped by more than 50 percent since the early 1960s. But a lack of academic focus has not had much of an effect on grade point averages or the ability of the undergraduates to obtain their degrees.
Thirty-six percent of the students said they studied alone less than five hours a week. Nevertheless, their transcripts showed a collective grade point average of 3.16. “Their G.P.A.’s are between a B and a B-plus,” said Professor Arum, “which says to me that it’s not the students, really — they share some of the blame — but the colleges and universities have set up a system so that there are ways to navigate through it without taking difficult courses and still get the credential.”
My experience would tend to support the last observation above.
Boyes posting on the reaction to fracking is an excellent illustration of the impact and reaction to creative destruction. As the process of innovation and creativity is actualized the prospect of change is unsettling. This sense of discomfort is amplified by the threat that change poses to those who are successful under the existing regime.
That said, the role played by education at any level in confronting creative destruction is significant. One perspective of the role of education is to create independent thinking and provide a framework for examining alternative points of view. In fact, this ideal lies at the heart of the economic way of thinking - trying to understand costs and benefits, the incentive and institutional framework that shapes incentives and costs and an analysis of the consequences of choice.
Another view of education, explicated by Sowell, Hayek and others, is indoctrination. That is, as in the case that Boyes reports, schools can present and advocate for an ideology. The point of view presented by the elementary school teacher is one based on fear of change, distrust of emergent processes and hostility to change.
Boyes and I have explored the moral content of economics and this case is an excellent opportunity to consider the moral framework offered by the economic way of thinking and to juxtapose the economic way of thinking with an ideological view that mobilizes to oppose creative destruction in favor of a static view. Further, the static view favored by those who control or seek to control is a narrow one premised on the false premise of egalitarianism.
I am anxious to explore this juxtaposition in an effort to better understand those who would deny progress or change.
Fracking is the process of drilling 10,000 feet into the earth and then drilling sidewise to reach a gas/oil pocket. To release the gas and oil, wate and chemicals are forced into the well. The water/chemical combination is about 95 to 99% water and the rest chemicals. The process could save the United States from $5 or $10 gasoline at the pump. However, the environmentalist/leftist groups are attacking fracking. First they argue that the chenmicals leach into the water aquifer poisening the water. The problem with this argument is that the water aquifer is 500 feet below the surface. It would be impossible for those chemicals to leach upward through 9500 feet of solid rock to reach the water.
In one of my recent executive MBA classes, a student mentioned that his child watched a video in school showing how bad fracking was; water from taps could be ilt on fire. Now get this. The teacher was showing this scary video to her class of young kids. They can't help but grow up thinking that fracking is something that should be banned. But, there are water tables around the country that can be lit on fire due to methane gas, something occurring naturally. It is due to chemicals used in the fracking process.
Surely the producers of this DVD knew the facts and not only refused to report them but chose to lie about them. Why? I believe it is part of the agenda of government growth. What is the easiest way to enlarge government? To create a crisis. As Rom Emanuel said "You don't want to waste a crisis."
James R. Otteson: Capitalism and Morality: Nobel Laureate Edmund Phelps, the McVickar Professor of Political Economy at Columbia University, has written a fascinating short essay on the connection between justice and capitalism. He shifts the usual focus of such discussions from just or unjust distribution signatures to the aspect of human nature often overlooked: the tireless search for innovation.
Labor unions like to portray collective bargaining as a basic civil liberty, akin to the freedoms of speech, press, assembly and religion. For a teachers union, collective bargaining means that suppliers of teacher services to all public school systems in a state—or even across states—can collude with regard to acceptable wages, benefits and working conditions. An analogy for business would be for all providers of airline transportation to assemble to fix ticket prices, capacity and so on. From this perspective, collective bargaining on a broad scale is more similar to an antitrust violation than to a civil liberty.
As to public sector employee unions I would find this observation convincing.
It was the deadliest workplace accident in New York City’s history. A dropped match on the 8th floor of the Triangle Shirtwaist Factory sparked a fire that killed over a hundred innocent people trapped inside. The private industry of the American factory would never be the same.
In this accessible post, Higgs channels Hayek and ABCT to remind us of the dangers of aggregation.
A serious problem lurks, however, in the way the mainstream experts think about the economy, and hence in the kind of analysis they undertake to assess its current performance and its likely future changes. All too often, they model the macroeconomy as a black box into which flow undifferentiated “labor” services and “capital” services and out of which flows a uniform substance called “output,” measured empirically by estimates of real GDP. Units of this output command a price known as the “price level,” measured empirically by the GDP deflator; otherwise, prices play no role in the model. The interest rate plays only a limited role as a determinant of the demand for money and as a minor determinant of saving and investment spending. Time is essentially irrelevant.Extreme Aggregation Misleads Macroeconomists and the Fed
Unleashing Capitalism Russell Sobel | November 11, 2010 The video is from the Workshop in Philosophy, Politics, and Economics, a weekly meeting held at the Fairfax Campus of George Mason University. It was established to encourage and explore the latest research at the intersection of these three disciplines by scholars from across the social sciences and humanities.
Dr. Russell Sobel presented on his research from West Virginia and South Carolina, titled “Unleashing Capitalism.” The research reviews the scientific evidence on which policies best promote growth and concludes that a policy climate consistent with capitalism, or ‘economic freedom,’ is the best way to accomplish growth and increases in living standards. These policies work because they result in increased capital formation, higher labor productivity, reduced levels of wasteful rent-seeking and lobbying activity, and investment being better channeled to the most productive uses.